SIR SHADI LAL ENTERPRISES LIMITED · SIR SHADI LAL ENTERPRISES LIMITED 1 SIR SHADI LAL ENTERPRISES LIMITED BOARD OF DIRECTORS : Shri Onke Aggarwal-Chairman Shri Rajat Lal-Managing

SIR SHADI LAL ENTERPRISES LIMITED

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BOARD OF DIRECTORS : Shri Onke Aggarwal-Chairman Shri Rajat Lal-Managing Director Shri Vivek Viswanathan-Joint Managing Director Shri Rahul Lal-Executive Director Shri Hemantpat Singhania Shri R.L. Srivastava Shri R.C. Sharma Smt. Radhika Viswanathan Hoon

COMPANY SECRETARY : Shri P.K. Goyal

BANKERS : State Bank of India

Punjab National Bank

AUDITORS : Messrs. Basant Ram & Sons, Chartered Accountants, A-18, Nizamuddin East, Murli Marg, New Delhi-110 013

REGISTERED OFFICE : 4-A, Hansalaya, 15, Barakhamba Road, New Delhi-110 001

MANUFACTURING UNITS : Upper Doab Sugar Mills, Shamli-247 776 (U.P.)

Unn Sugar Complex, Block Unn, Distt. Shamli (U.P.)

Shamli Distillery & Chemical Works, Shamli-247 776 (U.P.)

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SIR SHADI LAL ENTERPRISES LIMITED(Corporate Identity No. L51909DL1933PLC009509)

Regd. Office: 4-A, Hansalaya, 15, Barakhamba Road, New Delhi-110 001Ph.011-23316409 Email Id [email protected]

NOTICE FOR THE 80TH ANNUAL GENERAL MEETING

Notice is hereby given that the 80th Annual General Meeting of the Shareholders of Sir Shadi Lal Enterprises Limited will be held on Monday the 22nd September, 2014 at 11.00 a.m. at P.H.D. House, Opposite Asian Games Village, New Delhi - 110 016 to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2014, Statement of Profit and Loss account for the year ended on that date together with the Reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Smt. Radhika Viswanathan Hoon, (DIN: 06436444) who retires by rotation and being eligible, offers herself for re-appointment.

3. To appoint a Director in place of Sh. Vivek Viswanathan, (DIN: 00141053) who retires by rotation and being eligible, offers himself for re-appointment.

4. To consider and, if thought fit, to pass, with or without modification (s), the following resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder, as amended from time to time, M/s Basant Ram & Sons, Chartered Accountants (Firm Registration No. 000569N), be and are hereby re-appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the eighty third AGM of the Company to be held in the year 2017 (subject to ratification of their appointment at every AGM), at such remuneration plus service tax, out-of-pocket and travelling expenses etc., as may be mutually agreed between the Board of Directors of the Company and the Auditors.”

SPECIAL BUSINESS:


“RESOLVED that pursuant to the provisions of Sections 149 and 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement,

Sh. Onke Aggarwal (DIN: 00141124), who was appointed as a Director liable to retire by rotation and whose term expires at this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years from 22nd September, 2014 to 21st September, 2019.”


“RESOLVED that pursuant to the provisions of Sections 149 and 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Sh. R.C. Sharma (DIN: 00023274), who was appointed as a Director liable to retire by rotation and whose term expires at this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years from 22nd September, 2014 to 21st September, 2019.”


“RESOLVED that pursuant to the provisions of Sections 149 and 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Sh. Hemant Pat Singhania (DIN: 00141096), who was appointed as a Director liable to retire by rotation and whose term expires at this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years from 22nd September, 2014 to 21st September, 2019.”


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Contd.....

8. To consider and, if thought fit, to pass, with or without modification (s), the following resolution as a Special Resolution:

“RESOLVED that in accordance with the provisions of Sections 196, 197 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), approval of the Company be and is hereby accorded to the revision in the remuneration to Sh. Rajat Lal, Managing Director for a period of three year w.e.f. 01.04.2014 to 31.03.2017 as set out in the explanatory statement.”

“RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorized to vary the remuneration and perquisites including the monetary value thereof as specified in the explanatory statement, to the extent the Board of Directors may consider appropriate, as may be permitted or authorized in accordance with the provisions under the Companies Act, 2013 or Scheduled appended thereto, for the time being in force or any statutory modification or re-enactment thereof and/or in rules or regulations promulgated thereunder.”


“RESOLVED that in accordance with the provisions of Sections 196, 197 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), approval of the Company be and is hereby accorded to the re-appointment of Shri Vivek Viswanathan (DIN: 00141053) as Joint Managing Director of the Company, for a period of 3 (three) years with effect from 1st January, 2015, on the terms and conditions including remuneration as set out in the Statement annexed to the Notice convening this Meeting, with liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include the Nomination and Remuneration Committee of the Board) to alter and vary the terms and conditions of the said re-appointment and / or remuneration as it may deem fit and as may be acceptable to Shri Vivek Viswanathan, subject to the same not exceeding the limits specified under Schedule V to the Companies Act, 2013 or any statutory modification(s) or re-enactment thereof;

RESOLVED FURTHER that the Board be and is hereby authorized to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”


“RESOLVED that pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), Sh. Rishi Mohan Bansal, Cost Auditors appointed by the Board of Directors of the Company, to conduct the audit of the cost records of the Company for the financial year ending 31st March, 2015, be paid the remuneration as set out in the Statement annexed to the Notice convening this Meeting.”

RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorized to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”


RESOLVED that pursuant to Section 180 (1) (c) of the Companies Act, 2013, consent of the company be and is hereby accorded to the Board of Directors of the company for borrowing from time to time such sums of money as they may deem requisite, for the purpose of the business of the company notwithstanding that moneys to be borrowed together with moneys already borrowed by the company (apart from the temporary loans obtained from the company’s bankers in the ordinary course of business) shall exceed the aggregate of the company paid-up capital of the company and its free reserves, i.e. to say, reserves not set apart for any specific purpose, provide that the total amount upto which moneys may be so borrowed by the Board of Directors shall not exceed a sum of Rs. 500 Crores (Rupees Five hundred Crores only) at any time.”


“RESOLVED that pursuant to Section 108 (1) (a) and other applicable provisions, if any, of the Companies Act, 2013, consent of the members of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the ‘Board’ to create such charges, mortgages and hypothecations created by the Company, on such movable and immovable properties, both present and future, and in such manner as the Board May deem fit, together with power to take over the management and concern of the Company in certain events, in favour of Banks/Financial Institutions and/or other Lenders to secure borrowings from time to time provided that the aggregate of borrowings so secured shall not exceed Rs. 500 Crores (Rupees Five hundred Crores only) outstanding at any time exclusive of interest, additional interest, compound interest, liquidated damages, commitment charge, premia on prepayment or on redemption, costs, charges, expenses and


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all other monies payable by the company in respect of such borrowings.”

“RESOLVED FURTHER that for the purpose of giving effect to the above resolution, the Board be and is hereby authorized and empowered to finalize, settle and execute requisite agreements, documents, deeds, indemnities, guarantees, declarations or other legal undertaking and to do all such acts, deeds, matters and things as it may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard to creating mortgage/charges as aforesaid.”

By order of the Board

Place : New Delhi P.K. GoyalDated : 2nd August, 2014 Company Secretary

NOTES:

1. A member entitled to attend and vote at the Annual General Meeting (“Meeting”) is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the Company. The Proxy form duly completed and signed, in order to be effective must be received at the registered office of the company not less than 48 hours before the commencement of the Meeting.

2. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

3. Corporate members intending to send their authorized representatives to attend the Meeting are requested to send to the Company a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the Meeting.

4. In terms of Article 98 of the Articles of Association of the Company, read with section 152 of the Companies Act, 2013 Smt. Radhika Viswanathan Hoon and Sh. Vivek Viswanathan, Directors, retire by rotation at this meeting and being eligible, offer themselves for reappointment. The Board of Directors of the Company recommends their re-appointment.

5. As per Clause 49 of the Listing Agreement with Stock Exchanges, the brief resume and functional expertise of directors proposed for appointment/re-appointment are annexed to this notice along with the details of the Companies in which they are Directors and the Board Committees of which they are members.

6. An Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013, relating to the Special Business to be transacted at the Meeting is annexed hereto.

7. The Register of Members and Share Transfer Books of the Company will remain closed from the 16th September 2014 to the 22nd September, 2014 (both days inclusive).

8. Shareholders are requested to intimate to the Company/Registrar and Transfer Agent, M/s Alankit Assignments Limited, change if any, in their registered addresses.

9. Members are informed that in case of joint holders attending the Meeting, only such joint holder who is higher in order of the names will be entitled to vote.

10. Relevant documents referred to in the accompanying Notice are open for inspection by the members at the Registered Office of the Company on all working days, between 11.00 a.m. and 1.00 p.m. up to the date of the Meeting.

11. Members who are holding shares in identical order of names in more than one folio are requested to write to the Company or to the Share Transfer Agents of the Company, M/s Alankit Assignments Limited, to enable it to consolidate their holdings in one folio.

12. Members are requested to bring their copies of the Report and Accounts to the meeting.

13. Members, who hold shares in dematerialized form, are requested to bring their depository account number (Client ID No.) for easier identification and recording of attendance at the meeting.

14. Members who require any information about the accounts to be explained in the meeting are requested to inform the Company about their intended query at least seven days in advance of the meeting.

15. Pursuant to Section 205A of the Companies Act, 1956, all unpaid/unclaimed dividends declared for and up to the accounting period ended 31st March 1995 have been transferred to the General Revenue Account of Central Government. Members, who have not yet encashed their dividend warrants for the said period, are requested to claim the amount from the Registrar of Companies, National Capital Territory of Delhi & Haryana, 4th Floor, IFCI Tower, 61, Nehru Place, New Delhi - 110 019.

16. Pursuant to Section 205A and 205C of the Companies Act, 1956, unpaid/ unclaimed dividends for the year 1995-96, 1996-97, 1997-98, 1998-99, interim and final dividend of 1999-2000, 2000-2001, 2001-2002, 2003-04, 2004-05 & 2005-06 have been transferred by the Company to “Investor Education & Protection Fund”(IEPF) constituted by the Central Government under Section 205A and 205C of the Companies Act, 1956. Further, under the amended provisions of Section 205B of the Companies Act, 1956, no claim shall lie for the unclaimed Dividend from IEPF by the shareholders. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 23rd September, 2013 (date of last Annual General Meeting) on the website of the Company (www.sirshadilal.com).

notiCe Contd.....


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17. Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, dividend for the financial year ended 31st March, 2010 which remain unclaimed for a period of seven years will be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956 as detailed below:

Financial Date of Declaration Due date for the Year of Dividend transfer to IEPF

2009-10 24.09.2010 30.10.2017

Shareholders who have not so far encashed/claimed their dividend warrants for the financial year 2009-2010 are requested to approach the Company for re-validation of dividend warrants or for obtaining duplicate dividend warrants. Shareholders are requested to note that no claim shall lie against the company or the said fund in respect of any amounts, from the aforementioned respective date of transfer.

18. Section 72 of the Companies Act, 2013, has extended nomination facility to individuals holding shares in Companies. Shareholders, in particular, those holding shares in single name, are requested to avail of the above facility by furnishing to the company Form SH-13. Shareholders may please write to the company for the prescribed Nomination Form SH-13.

19. The Securities and Exchange Board of India (SEBI) has mandated that the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company/Registrar and Transfer Agent, M/s Alankit Assignments Limited.

20. Members who have not registered their e-mail addresses so far are requested to register their e-mail address for receiving all communication including Annual Report, Notices, Circulars, etc. from the Company electronically.

21. Entry to the Auditorium will be strictly against entry slip available at the counters at the venue against exchange of Attendance Slip. Photocopy of the Attendance Slip will not be entertained.

22. For the security and safety of the Shareholders, no articles/baggage will be allowed at the venue of the meeting. The Members/Attendees are strictly requested not to bring any article/baggage etc. at the venue of the meeting.

23. Annual Report is also available at the website of the Company at www.sirshadilal.com in the Investors Relations section.

24. In compliance with the provisions of section 108 of the Act and the Rules framed thereunder, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by NSDL, on all resolutions set forth in this Notice.

The instructions for e-voting are as under:

A. In case a Member receives an e-mail from NSDL (for

Members whose e-mail addresses are registered with the Company/Depositories):

i. Open the e-mail and also open PDF file namely “SSLEL e-voting.pdf ” with your Client ID or Folio No. as password. The said PDF file contains your user ID and password for e-voting. Please note that the password is an initial password.

ii. Open the internet browser and type the following URL: https://www.evoting.nsdl.com.

iii. Click on Shareholder - Login.

iv. If you are already registered with NSDL for e-voting then you can use your existing user ID and password.

v. If you are logging in for the first time, please enter the user ID and password provided in the PDF file attached with the e-mail as initial password.

vi. The Password Change Menu will appear on your screen. Change to a new password of your choice, making sure that it contains a minimum of 8 digits or characters or a combination of both. Please take utmost care to keep your password confidential.

vii. Once the e-voting home page opens, click on e-voting> Active Voting Cycles.

viii. Select “EVEN” (E-Voting Event Number) of Sir Shadi Lal Enterprises Limited. Now you are ready for e-voting as Cast Vote page opens.

ix. Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when prompted.

x. Upon confirmation, the message “Vote cast successfully” will be displayed.

xi. Once the vote on the resolution is cast, the Member shall not be allowed to change it subsequently.

xii. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/Authority letter, etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to [email protected], with a copy marked to [email protected].

xiii. In case of any queries, you may refer the Frequently Asked Questions (FAQs) - Shareholders and e-voting user manual - Shareholders, available at the downloads section of www.evoting.nsdl.com.

B. In case a Member receives physical copy of the Notice of AGM (for Members whose email addresses are not registered with the Company/Depositories):

i. Initial password is provided in the enclosed ballot form: EVEN (E-Voting Event Number), user ID and password.

Contd.....


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ii. Please follow all steps from Sl. No. (ii) to Sl. No. (xiii) above, to cast vote.

C. Other Instructions:

i. The e-voting period commences on not less than day, not more than 3 days 16th September, 2014 (9.00 a.m. IST) and ends on 18th September, 2014 (6.00 p.m. IST). During this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on 11th August, 2014 may cast their vote electronically. The e-voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the Member, he shall not be allowed to change it subsequently.

ii. The voting rights of Members shall be in proportion to their shares of the paid up equity share capital of the Company as on 11th August, 2014.

iii. Sh. S.K. Jain Prop. Sunil K. Jain & Associates Company Secretaries, (Membership No. FCS 4089), has been appointed as the Scrutinizer to scrutinize the e-voting process (including the Ballot Form received from the Members who do not have access to the e-voting process) in a fair and transparent manner.

iv. The Scrutinizer shall, within a period not exceeding three working days from the conclusion of the e-voting period, unblock the votes in presence of at least two witnesses not in the employment of the Company and make a Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.

v. The results declared along with the Scrutinizer’s Report shall be placed on the Company’s website www.sirshadilal.com and on the website of NSDL www.evoting.nsdl.com within two days of the passing of the resolutions at the eightieth AGM of the Company on 22nd September, 2014 and communicated to the DSE Limited and BSE Limited, where the shares of the Company are listed.

ANNEXURE TO NOTICE

(Explanatory statement under Section 102 (1) of the Companies Act, 2013)

ITEM NO. 5 to 7

Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania are Independent Directors of the Company and have held the positions as such for more than 5 (five) years.

The Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement, inter alia, stipulating the conditions for the appointment of Independent Directors by a listed company.

It is proposed to appoint Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania as Independent Directors under Section 149 of the Act and Clause 49 of the Listing Agreement to hold office for 5 (five) consecutive years from 22nd September, 2014 to 21st September, 2019.

Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania are not disqualified from being appointed as Directors in terms of Section 164 of the Act and have given their consent to act as Directors.

The Company has received notices in writing from members alongwith the deposit of requisite amount proposing the candidatures of each of Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania for the office of Directors of the Company.

The Company has also received declarations from Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and under Clause 49 of the Listing Agreement.

In the opinion of the Board, Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania fulfill the conditions for appointment as Independent Directors as specified in the Act and the Listing Agreement. Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania are independent directors of the Company.

Brief resume of Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are provided in the Corporate Governance Report forming part of the Annual Report.

Copy of the draft letters for respective appointments of Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania as Independent Directors setting out the terms and conditions are available for inspection by members at the Registered Office of the Company.

This Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchanges.

Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania are interested in the resolutions set out respectively at Item Nos. 5, 6 and 7 of the Notice with regard to their respective appointments.

The relatives of Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania may be deemed to be interested in the resolutions set out respectively at Item Nos. 5, 6 and 7 of the Notice, to the extent of their shareholding interest, if any, in the Company.

Save and except the above, none of the other Directors/Key Managerial Personnel of the Company/their relatives are, in any way, concerned or interested, financially or otherwise, in these resolutions.

The Board recommends the Ordinary Resolutions set out at Item Nos. 5, 6 and 7 of the Notice for approval by the shareholders.

ITEM NO. 8

Sh. Rajat Lal was appointed as Managing Director of the Company by the Shareholders in their meeting held on 23.9.2013 at a Salary of Rs.85,000 per month and perquisites and commission on profits for a period of 5 years w.e.f. 1.4.2014 on the terms and conditions as specified in the explanatory statement of resolution No.8 of notice of Annual General Meeting held on 23.9.2013. Sh. Rajat

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Lal was drawing salary of Rs. 1,00,000 per month and perquisites at the time of his re-appointment which was approved by the shareholders in AGM held on 17.9.2008 but at the time of his re-appointment in the last AGM held on 23.9.2013, as per effective capital of the Company as on 31.3.2013, the salary of Sh. Rajat Lal was reduced to Rs. 85,000 per month and perquisites as per Schedule XIII of the Companies Act, 1956.

Now, as per Schedule V of the Companies Act, 2013, Company may pay remuneration upto Rs.30 Lacs to a managerial person where the effective capital of the Company is negative or less than Rs. 5 Crores.

Sh. Rajat Lal has been discharging responsibilities of the office of the Managing Director successfully and efficiently. Keeping in view of the salary structure of managerial personnel in the industries and present salary in the sugar industries, the Nomination and Remuneration Committee of Directors and Board of Directors have approved the revision in salary of Sh. Rajat Lal, Managing Director for a period of three years w.e.f. 01.04.2014 to 31.03.2017 on the terms and conditions of appointment and remuneration including commission and perquisites as under:-

Name : Sh. Rajat LalDesignation : Managing DirectorTenure of Office : 01.04.2014 to 31.03.2019Salary per Month : Rs.1,20,000Commission : 4.5%PerquisitesPart AHousing : 60% of the salary Gas, Electricity & Water : 5% of the salaryMedical Reimbursement : Expenses incurred for self and family,

subject to a ceiling of one month salary per year or 3 months salary in a period of 3 years.

Personal Accident : Premium not to exceed Rs. 10,000 Insurance per year.

Part BCompany’s contribution : Company contribution towards towards Provident Fund/ Provident Fund @ 12% of salary and Superannuation fund Superannuation Fund @ 15% of

salary.

Gratuity : As per rules of the Company

Encashment of Leave : As per rules of the Company

PART C1) Car: Provision of a chauffeur driven car for office use.

2) Telephone: Free telephone facility at residence, personal long distance calls to be paid by him.

3) Entertainment Expenses: Reimbursement of entertainment expenses actually and properly incurred in the course of legitimate business of the Company.

Payments in Part-C will not be considered as perquisites for the purpose of ceiling under Sections 197 of the Companies Act, 2013.

OTHER TERMS APPLICABLE TO THE APPOINTMENT & MINIMUM REMUNERATION:

1. He will not be paid any “Sitting fee” for attending the meetings of the Board of Directors or Committee’s thereof.

2. The Board/’Nomination and Remuneration Committee’ may revise the existing terms or allow any other facilities/perquisites, from time to time, within the overall ceiling.

3. In the event of absence or inadequacy of profits in any financial year, he will be paid the above remuneration excluding commission as minimum remuneration, subject to the overall ceilings laid down in Section-II of Part-II of Schedule V. (In that event, contribution to Provident Fund and Superannuation Fund to the extent these are exempted under the Income-Tax Act, 1961 and gratuity payable at the rate not exceeding half a month’s salary for each completed year of service and encashment of leave at the end of tenure will not be included in the computation of the ceiling on perquisites).

4. The appointment may be terminated by either party by giving six calendar month’s notice in writing or lesser notice as may be agreed to.

In the event of termination of the appointment by the Company, he will be entitled to receive compensation in accordance with the Provisions of section 191 & 202 of the Companies Act, 2013.

The Company has not defaulted in debt servicing. Hence, the proposed remuneration could be sanctioned by the shareholders, without need for the approval of Central Government, by way of special resolution. Statement containing prescribed information for this purpose is furnished hereunder.

Memorandum and Articles of Association, relevant resolutions passed by the Nomination and Remuneration Committee and the Board and the written memorandum setting out the terms of revision of salary of Managing Director vide Section 190 (1) (b) are available for inspection by members at the registered office of the Company between11.00 a.m. and 1.00 p.m. on any working day.

Sh. Rajat Lal and Sh. Rahul Lal are interested in the resolution. The above may be treated as a written memorandum setting out

the terms of revision of salary of Shri Rajat Lal under Section 190 of the Act.

Save and except the above, none of the other Directors/Key Managerial Personnel of the Company/his relatives are, in any way, concerned or interested, financially or otherwise, in the resolution.

Your Directors recommend the revision in salary of Sh. Rajat Lal, Managing Director of the Company.

Statement containing required information as per Part II of Section II of Schedule V of the Companies Act, 2013

I. General Information:(1) Nature of industry : Manufacture of Sugar and all kind of Alcohol(2) Date or expected date : 26.06.1933 of commencement of commercial production

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(3) In case of new companies, : N.A. expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus

(4) Financial performance based on given indicators: (Rs. in Lakhs)Particulars 2013-14 2012-13 2011-12Total Income 47012.19 42937.72 37615.53Loss before providing for exceptional item and Depreciation 6172.95 604.23 4453.11Exceptional Item 423.09 456.24 -Cash Loss 5749.86 147.99 4453.11Provision for depreciation as per Companies Act 767.98 893.67 1054.40Loss before tax 6517.84 1041.66 5507.51Current tax 106.18 - 40.00Deferred Tax Assets 2154.89 116.25 1609.54Net Loss 4256.77 925.41 3937.97

Net Worth (2203.69) 2053.08 2978.49

(5) Foreign investments or : N.A. collaborations, if any.

II. Information about the appointee:

(1) Background details : S h r i R a j a t L a l , a g e d 5 5 years, is B.Com., B.S.(U.S.A.), M.B.A. (U.S.A.). Sh. Rajat Lal was appointed as the Joint Manag ing Di rec to r o f the Company by the shareholders of the Company in their meeting held on 27.05.1999 for a period of 5 years w.e.f. 01.04.1999. Sh. Rajat Lal was appointed as the Managing Director of the Company by the shareholders of the Company in their meeting held on 25.09.2003 for a period of 5 years w.e.f. 01.04.2004. He was re-appointed as Managing Director of the Company by the shareholders of the Company in their meeting held on 17.09.2008 for a further period of 5 years w.e.f. 01.04.2009.

(2) Past remuneration : Name of the Financial Category Salary Perquisites Commission Total ServiceDirector Year (Rs.) (Rs.) (Rs.) (Rs.) Contract/ Notice period/ Severance fees

Sh. Rajat Lal, 2013-14 Executive 1200000 1255406 - 2455406 Contractual

Managing 2012-13 Executive 1200000 1146065 - 2346065 Contractual

Director 2011-12 Executive 1200000 1140843 - 2340843 Contractual

(3) Recognition or awards : N.A.

(4) Job profile and his : Sh. Rajat Lal has been discharging

suitability responsibilities of the office of the Managing Director successfully and efficiently for last more than two decades.

(5) Remuneration : As set out in the Statement under proposed Section 102 (1) of the Companies

Act, 2013.

(6) Comparative remuneration : Considering the profile and profile with respect to experience of Sh. Rajat Lal and industry, size of the current trend of compensation company, profile of package in Sugar Industry and the position and person other Corporate, the remuneration (in case of expatriates the proposed is in line with comparable relevant details would be remuneration levels in the industry. with respect to the country of his origin)

(7) Pecuniary relationship : Sh. Rajat Lal holds 938232 equity directly or indirectly shares in the Company. Other than with the company, or the remuneration stated above, he relationship with the has no pecuniary relationship managerial personnel, directly or indirectly with the if any. Company. Sh . Rahu l La l ,

Execut ive Di rec tor o f the Company, managerial personnel in the Company is a relative of him.

III. Other information:

(1) Reasons of loss or : Sugar industry is intrinsically inadequate profits cycl ica l wi th huge swings

in production between years. Sugar price precariously fall both in the global and local markets during glut in supply. Since sugar and sugarcane are essential commodities and politically sensitive, they are subject to State intervention like arbitrary cane price fixation as against Fair and Remunerative Price of Central Government. The Company has suffered losses in last four financial years due to less early variety cane, lower sugar recovery and higher cost of production as against unviable sugar sales realization.

(2) Steps taken or proposed : Company has signed MOU with to be taken for Indian Institute of Sugarcane improvement research, Lucknow and made action

plan and sugar cane development programme for unit Upper Doab Sugar Mills for one year duration from March 2014 to March 2015 under following activities:

1. Varietal replacement

2. Demonstration of sugarcane production technologies.

notiCe Contd.....


9

3. Soil analysis and development of soil fertility map.

4. Technical advisory service to enrich the biocompost.

5. Te c h n i c a l s u p p o r t f o r establishment of bio-control laboratory.

6. Advisory service for monitoring and management of major insect pests such as white grub, top borer etc. and diseases of sugarcane.

7. On farm trial of farm machineries developed by IISR.

8. Training to the mill officials, development staff and providing technical input in organizing field days/Kisan Gosthis by sugar mill in the command area.

To encourage farmers to do autumn planting on a large scale for facilitating multiple cropping which would in turn maximize their returns and would result in better recovery.

Company is installing equipment for saving in steam, power consumption and better operational efficiencies.

(3) Expected increase in : T h e C o m p a n y m a i n t a i n s productivity and profits commendable control over its in measurable terms. operations that are however

subject to climatic challenges, State intervention for fixing sugar cane price on linkage to sale realization formula.

IV. Disclosures:

The following disclosures shall be mentioned in the Board of Director’s report under the heading “Corporate Governance”, if any, attached to the financial statement:-

(i) all elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the whole time directors for the financial year 2013-14, are as under.

S. Name of the Category Salary Perquisites* Commission Total ServiceNo. Director (Rs.) (Rs.) (Rs.) (Rs.) Contract/ Notice period/ Severance fees

1. Sh.Rajat Lal, Executive 1200000 1255406 - 2455406 Contractual** Managing Director

2. Sh. Vivek Viswanathan, Executive 1080000 1062998 - 2142998 Contractual** Joint Managing Director

3. Sh. Rahul Lal, Executive 540000 530979 1070979 Contractual** Executive Director

Total 2820000 2849383 - 5669383

(ii) details of fixed component and performance linked incentives along with the performance criteria; N.A.

(iii) service contracts, notice : The appointment is for five years. period, severance fees; T h e a p p o i n t m e n t m a y b e

terminated by either party by giving six calendar month’s notice in writing or lesser notice as may be agreed to. In the event of termination of the appointment by the Company, he will be entitled to receive compensation in accordance with the Provisions of section 191 & 202 of the Companies Act, 2013.

(iv) stock option details, if : N.A. any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable.

ITEM NO. 9

Shri Vivek Viswanathan, aged 44 years, graduated with a B.A. (Hons) degree in History from St. Stephen’s College, Delhi University in 1992. He subsequently acquired an MBA degree from the International Management Institute (IMI), New Delhi in 1995. He has over 8 years of work experience with VST Industries (British American Tobacco), and Coca-Cola India in various functions including Sales, Marketing, Brand Management, Key Account Management and Corporate Strategy. Mr. Viswanathan also earned a Masters Degree in International Affairs (MIA), with specialization in International Finance and Business from Columbia University, New York in 2005. After the sad demise of Ms. Rupa Lal, Mr. Vivek Viswanthan was taken in the active management of the Company w.e.f. 1st January, 2005 as Whole-time Director. He was re-appointed as Joint Managing Director for a further period of five years w.e.f. 01.01.2010 till 31.12.2014 in the Annual General Meeting held on 22.09.2009.

The Board of Directors on the recommendation of the Nomination and Remuneration Committee of the Board of Directors in their meeting held on 12.07.2014 reviewed that Mr. Viswanthan is highly qualified and have experience of more than 13 years in the management of the company. Shri Vivek Viswanathan has been discharging responsibilities of the office of Joint Managing Director efficiently. Therefore, the Nomination and Remuneration Committee of Directors and Board of Directors have approved to re-appoint Sh. Vivek Viswanthan as Joint Managing Director for a further period of three years w.e.f. 01.01.2015 to 31.12.2017 on the terms & conditions and remuneration including commission and perquisites as set out hereunder:

(a) Salary : Rs.1,10,000 per month.

(b) Commission: Remuneration by way of commission will also be allowed subject to the limits of total remuneration as laid down in section 197 read with Schedule V of the Companies Act, 2013 subject to the maximum of 4.5% of the net profits as reduced by the amount paid to him by way of salary and perquisites.

Contd.....


10

(c) Perquisites: Shri Vivek Viswanthan, Joint Managing Director will be entitled to the following perquisites in addition to the above remuneration:-

PART-A:

1) Housing : 60% of the salary.

2) Gas, Electricity & Water : 5% of the salary.

3) Medical Reimbursement : Expenses incurred for self and family, subject to a ceiling of one month’s salary per year or three months salary in a period of three years.

4) Personal Accident & Medi-claim Insurance: Premium not to exceed Rs.10,000/- per year.

PART -B:

1) Company’s contribution: towards Provident Fund @ 12% of Salary and Superannuation Fund @ 15% of Salary.

2) Gratuity: As per Rules of the Company.

3) Encashment of leave: As per rules of the Company, leave accumulated but not availed of during his tenure may be allowed to be encashed as per rules of the Company.

PART-C:

1) Car: Provision of a chauffeur driven car for office use.

2) Telephone: Free telephone facility at residence, personal long distance calls to be paid by him.

3) Entertainment Expenses: Reimbursement of entertainment expenses actually and properly incurred in the course of legitimate business of the Company.

Payments in Part-C will not be considered as perquisites for the purpose of ceiling under Sections 197 of the Companies Act, 2013.

OTHER TERMS APPLICABLE TO THE APPOINTMENT & MINIMUM REMUNERATION:

1. He will not be paid any “Sitting fee” for attending the meetings of the Board of Directors or Committee’s thereof.

2. The Board/’Remuneration Committee’ may revise the existing terms or allow any other facilities/perquisites, from time to time, within the overall ceiling.

3. In the event of absence or inadequacy of profits in any financial year, he will be paid the above remuneration excluding commission as minimum remuneration, subject to the overall ceilings laid down in Section-II of Part-II of Schedule V (In that event, contribution to Provident Fund and Superannuation Fund to the extent these are exempted under the Income-Tax Act, 1961 and gratuity payable at the rate not exceeding half a month’s salary for each completed year of service and encashment of leave at the end of tenure will not be included in the computation of the ceiling on perquisites).

4. The appointment may be terminated by either party by giving six calendar month’s notice in writing or lesser notice as may be agreed to. In the event of termination of the appointment by the Company, he will be entitled to receive compensation in accordance with the Provisions of section 191 & 202 of the Companies Act, 2013.

Shri Vivek Viswanathan satisfies all the conditions set out in Part-I of Schedule V to the Act as also conditions set out under sub-section (3) of Section 196 of the Act for being eligible for his re-appointment. He is not disqualified from being appointed as Director in terms of Section 164 of the Act.

The above may be treated as a written memorandum setting out the terms of re-appointment of Shri Vivek Viswanathan under Section 190 of the Act.

Brief resume of Shri Vivek Viswanthan, nature of his expertise in specific functional areas, names of companies in which he holds directorships and memberships/chairmanships of Board Committees, shareholding and relationships amongst directors inter-se as stipulated under Clause 49 of Listing Agreement with the Stock Exchanges, are provided in the Corporate Governance Report forming part of the Annual Report.

The Company has not defaulted in debt servicing. Hence, the proposed remuneration could be sanctioned by the shareholders, without need for the approval of Central Government, by way of special resolution. Statement containing prescribed information for this purpose is furnished hereunder.

Memorandum and Articles of Association, relevant resolutions passed by the Nomination and Remuneration Committee and the Board and the written memorandum setting out the terms of appointment of Joint Managing Director vide Section 190 (1) (b) are available for inspection by members at the registered office of the Company between11.00 a.m. and 1.00 p.m. on any working day.

Shri Vivek Viswanthan and Smt. Radhika Viswanathan Hoon being related are interested in this resolution.

Save and except the above, none of the other Directors/Key Managerial Personnel of the Company/their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution.

Your Directors recommend appointment of Shri Vivek Viswanthan as the Director and the Joint Managing Director of the Company.

Statement containing required information as per Part II of Section II of Schedule V of the Companies Act, 2013

I. General Information:

(1) Nature of industry : Manufacture of Sugar and all kind of Alcohol

(2) Date or expected date : 26.06.1933 of commencement of commercial production(3) In case of new companies, : N.A. expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus

notiCe Contd.....


11

(4) Financial performance based on given indicators : (Rs. in Lakhs)

Particulars 2013-14 2012-13 2011-12Total Income 47012.19 42937.72 37615.53Loss before providing for exceptional item and Depreciation 6172.95 604.23 4453.11Exceptional Item 423.09 456.24 -Cash Loss 5749.86 147.99 4453.11Provision for depreciation as per Companies Act 767.98 893.67 1054.40Loss before tax 6517.84 1041.66 5507.51Current tax 106.18 - 40.00Deferred Tax Assets 2154.89 116.25 1609.54Net Loss 4256.77 925.41 3937.97

Net Worth (2203.69) 2053.08 2978.49

(5) Foreign investments or : N.A. collaborations, if any.

II. Information about the appointee:(1) Background details : S h r i Vi v e k Vi s w a n a t h a n ,

aged 44 years, graduated with a B.A. (Hons) degree in History from St. Stephen’s College, Delhi University in 1992. He subsequently acquired an MBA degree from the International Management Institute (IMI), New Delhi in 1995. Sh. Vivek Viswanathan has over 8 years of work experience with VST Industries (British American Tobacco), and Coca-Cola India in various functions including Sales, Marketing, Brand Management, Key Account Management and Corporate Strategy. Sh. Viswanathan also earned a Masters Degree in International Affairs (MIA), with specialization in International Finance and Business from Columbia Universi ty, New York in 2005.

(2) Past remuneration : Name of the Financial Category Salary Perquisites Commission Total ServiceDirector Year (Rs.) (Rs.) (Rs.) (Rs.) Contract/ Notice period/ Severance fees

Sh. Vivek 2013-14 Executive 1080000 1062998 - 2142998 ContractualViswanathan, 2012-13 Executive 1080000 1034830 - 2114830 ContractualJoint Managing 2011-12 Executive 1080000 1036118 - 2116118 ContractualDirector

(3) Recognition or awards : N.A.

(4) Job profile and his : Sh. Vivek Viswanathan was suitability appointed as a Director of the

Company on 24th March, 2001. He was taken in the active management by the Board of Directors and was

appointed as Wholetime Director w.e.f. 1st January, 2005. He was re-appointed as Joint Managing Director of the Company in the Annual General Meeting held on 22.09.2009 for a period of five years w.e.f. 01.01.2010 to 31.12.2014.

Sh. Vivek Viswanathan has been discharging responsibilities of the office of the Joint Managing Director efficiently.

(5) Remuneration proposed : As set out in the Statement under Section 102 (1) of the Companies Act, 2013.

(6) Comparative remuneration : Considering the profile and profile with respect to experience of Sh. Vivek Viswanathan industry, size of the and current trend of compensation company, profile of the package in Sugar Industry and position and person (in other Corporate, the remuneration case of expatriates the proposed is in line with comparable relevant details would be remunerat ion levels in the with respect to the industry. country of his origin)

(7) Pecuniary relationship : Sh. Vivek Viswanathan holds directly or indirectly 1290816 equity shares in the with the company, or Company. O the r t han t he relationship with the remuneration stated above, he has managerial personnel, given on lease office to the if any. c o m p a n y. S m t . R a d h i k a

Viswanathan Hoon, Director of the company is a relative of him.

III. Other information:

(1) Reasons of loss or : Sugar industry is intrinsically inadequate profits cycl ica l wi th huge swings

in production between years. Sugar price precariously fall both in the global and local markets during glut in supply. Since sugar and sugarcane are essential commodities and politically sensitive, they are subject to State intervention like arbitrary cane price fixation as against Fair and Remunerative Price of Central Government. The Company has suffered losses in last four financial years due to less early variety of cane, lower sugar recovery and higher cost of production as against unviable sugar sales realization.

(2) Steps taken or proposed : Company has signed MOU with to be taken for Indian Institute of Sugarcane improvement research, Lucknow and made

Contd.....


12

action plan and sugar cane development programme for unit Upper Doab Sugar Mills for one year duration from March 2014 to March 2015 under following activities:

1. Varietal replacement

2. Demonstration of sugarcane production technologies.

3. Soil analysis and development of soil fertility map.

4. Technical advisory service to enrich the biocompost.

5. Te c h n i c a l s u p p o r t f o r establishment of bio-control laboratory.

6. Advisory service for monitoring and management of major insect pests such as white grub, top borer etc. and diseases of sugarcane.

7. On farm trial of farm machineries developed by IISR.

8. Training to the mill officials, development staff and providing technical input in organizing field days/Kisan Gosthis by sugar mill in the command area.

To encourage farmers to do autumn planting on a large scale for facilitating multiple cropping which would in turn maximize their returns and would result in better recovery.

Company is installing equipment for saving in steam, power consumption and better operational efficiencies.

(3) Expected increase in : T h e C o m p a n y m a i n t a i n s productivity and profits commendable control over its in measurable terms. operations that are however

subject to climatic challenges, State intervention for fixing sugar cane price on linkage to sale realization formula.

IV. Disclosures:

The following disclosures shall be mentioned in the Board of Director’s report under the heading “Corporate Governance”, if any, attached to the financial statement:-

(i) all elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the whole time directors for the financial year 2013-14.

S. Name of the Category Salary Perquisites* Commission Total ServiceNo. Director (Rs.) (Rs.) (Rs.) (Rs.) Contract/ Notice period/ Severance fees

1. Sh.Rajat Lal, Executive 1200000 1255406 - 2455406 Contractual** Managing Director

2. Sh. Vivek Viswanathan, Executive 1080000 1062998 - 2142998 Contractual** Joint Managing Director

3. Sh. Rahul Lal, Executive 540000 530979 1070979 Contractual** Executive Director

Total 2820000 2849383 - 5669383

(ii) details of fixed component and performance linked incentives along with the performance criteria; N.A.

(iii) service contracts, notice : The appointment is for three years. period, severance fees; The appointment may be terminated

by either party by giving six calendar month’s notice in writing or lesser notice as may be agreed to. In the event of termination of the appointment by the Company, he will be entitled to receive compensation in accordance with the Provisions of section 191 & 202 of the Companies Act, 2013.

(iv) stock option details, if : N.A. any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable.

ITEM NO. 10

The Board, on the recommendation of the Audit Committee, has approved the appointment and remuneration of the Cost Auditors to conduct the audit of the cost records of the Company for the financial year ending 31st March, 2015 as per the following details:

Remuneration of Cost Auditor

For the product “Sugar” for both sugar units

Cost Audit Fee Rs. 30,000(inclusive of all incidental per annumand traveling expenses)

For the product “Industrial Alcohol” for Shamli Distillery & Chemical Works

Cost Audit Fee Rs. 15,000 per annum

Extra Travelling Expenses and ActualIncidental Expenses Rs. 2,000 per dayfor attending Audit Committee/ Board Meeting(s)

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company.

notiCe Contd.....


13

Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out at Item No. 10 of the Notice for ratification of the remuneration payable to the Cost Auditors for the financial year ending 31st March, 2015.

None of the Directors/Key Managerial Personnel of the Company/their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No. 10 of the Notice.

The Board recommends the Ordinary Resolution set out at Item No. 10 of the Notice for approval by the shareholders.

ITEM NO. 11 & 12

In terms of Section 293 (1) (a) and 293 (1) (d) of the Companies Act, 1956, the shareholders had passed requisite resolutions, by way of Ordinary Resolution, at the Annual General Meeting held on 24th September, 2010 and 23rd September, 2013 respectively. The Board of Directors were duly delegated powers for making borrowings and creating security for such borrowings upto an aggregate outstanding amount of Rs. 500 Crores.

The Central Government has since enacted Companies, 2013 in place of the Companies Act, 1956 and the provisions of new law are being effectuated in a phased manner. In terms of Section 180 of the Companies Act, 2013, the authorization by shareholders for the aforesaid purposes shall require to be given by way of Special Resolution as opposed to the Ordinary Resolution required under the old law. Ministry of Corporate Affairs by General Circular No. 04/2014 dated 25th March, 2014 has clarified that the resolutions passed under Section 293 of the Companies Act, 1956 prior to 12th September, 2013 or thereafter with reference to borrowings and/or creation of security will be regarded as sufficient compliance of the requirements of Section 180 of the Companies Act, 2013 for a period

of one year from the date of notification of Section 180 the new law.

It has thus become necessary for the company to revalidate the sanctions already given by passing a fresh resolution by way of Special Resolution. Having regard to the current business plans of the company, no higher limit has been sought at the current juncture.

No Director or Key Managerial Personnel of the Company or their relatives are concerned or interest financially or otherwise, in this item of business.

INSPECTION

Copy of the draft letters for respective appointments of Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania as Independent Directors setting out the terms and conditions and copy of the terms of revision in the remuneration of Sh. Rajat Lal, Managing Director and re-appointment including payment of remuneration of Sh.Vivek Viswanathan, Joint Managing Director is available for inspection by the members of the Company at the Registered Office of the Company on all working days between 11.00 a.m. to 1.00 p.m.

MEMBERS MAY PLEASE NOTE THAT NO GIFTS/GIFT COUPONS SHALL BE DISTRIBUTED AT THE VENUE OF THE MEETING.

By order of the Board

Place : New Delhi P.K. GoyalDated : 2nd August, 2014 Company Secretary


14

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15

DIRECTORS’ REPORTDEAR SHAREHOLDERS,

Your Directors hereby present the 80th Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS:

During the year under review, the sugar segment of your Company passed through a difficult period. The summarized financial results of the Company are presented below:-

(Rs. in Lacs)

For the Year ended For the Year ended March 31, 2014 March 31, 2013

Total Revenue 47012.19 42937.72

Loss before providing 6,172.95 604.23for Exceptional Itemand Depreciation

Less: Exceptional Item 423.09 456.24

Cash Loss 5,749.86 147.99

Add: Provision for 767.98 893.67 depreciationas per Companies Act

Loss before Tax 6517.84 1041.66

Add: Refund of 106.18 –Income Tax

Less: Provisional 2154.89 116.25Deferred Tax Assets

Net Loss for the year 4256.77 925.41

Basic earnings per share (81.08) (17.63)of Rs 10/- each

Diluted earnings per (81.08) (17.63)share of Rs 10/- each

The accumulated losses of the Company as on 31.03.2014 have exceeded its entire net worth. Therefore the Company has become sick industrial Company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and which will be reported by the Company to the BIFR as required under the provisions of Section 15 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

DIVIDEND:

In view of financial position of the company, your Directors regret their inability to recommend any dividend for the year ended 31st March, 2014.

REVIEW OF OPERATIONS:

SUGAR DIVISION:

The manufacturing results of both the sugar factories for the crushing season 2012–13 as compared to the last crushing season are as under:–

Particulars Upper Doab Unn Sugar Sugar Mills Complex Season Season 2013–14 2012–13 2013–14 2012–13

– Gross Working days 162 166 144 148

– Cane Crushed 8792035 8653306 5176350 5163073 (Qtls.)

– Average Cane 54272 52128 36068 34793 Crush per Crop day (Qtls.)

– Manufacturing 1.93 1.98 2.14 2.03 losses (%)

– Steam Consumption 53.06 51.58 46.01 45.68 cane (%)

– Average Sugar 9.02 9.14 8.47 9.00 recovery (%)

– Total sugar 792876 790410 438339 464560 produced (Qtls.)

The cane crushed during the sugar season 2013–14 as compared to the sugar season 2012–13 in both the sugar units is higher.

CANE DEVELOPMENT:

There has been down fall in the sugar recovery during the last 3–4 seasons in most of the sugar mills in western U.P. The main reason for the fall in the recovery is due to reduction in the area of early variety cane. We have prepared an action plan for proposed cane development activities to be undertaken during the spring planting 2014 and onwards.

DISTILLERY DIVISION:

The production in the Unit Shamli Distillery & Chemical Works in the Financial Year 2013–14 was 7066191 BL as compared to 7333632 BL in the Financial Year 2012–13.

There was a profit of Rs. 451.22 Lacs in the Financial Year 2013–14 as against profit of Rs. 350.42 Lacs in the Financial Year 2012–13 in the Distillery Division due to better efficiency.

Further analysis of operating performance for sugar and distillery segment is covered under ‘Management Discussion and Analysis’ which forms part of this Report.

DIRECTORS:

In terms of the Articles of Association of the Company, Smt. Radhika Viswanathan Hoon and Sh.Vivek Viswanathan retire at the ensuing Annual General Meeting. It is proposed to appoint Shri Onke Aggarwal, Shri R.C. Sharma and Shri Hemant Pat Singhania as Independent Directors at the ensuing Annual General Meeting for which approval of member’s has been sought.


16

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub–section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

On the recommendation of “Nomination and Remuneration Committee of Directors”, the Board of Directors of the Company has revised the remuneration of Sh. Rajat Lal as Managing Director of the Company for a period of three years w.e.f. 01.04.2014 to 31.03.2017 as set out in the Notice, subject to your approval.

On the recommendation of “Nomination and Remuneration Committee of Directors”, the Board of Directors of the Company has re–appointed Sh. Vivek Viswanathan as Joint Managing Director of the Company for a further period of three years w.e.f. 01.01.2015 to 31.12.2017 on the terms, conditions and remuneration as set out in the Notice, subject to your approval. The experience and qualification of Sh. Vivek Viswanathan is given in the Notice convening this meeting against the relevant item of the Agenda.

The required information pursuant to clause 49 IV (G) of the Listing Agreement regarding their experience, qualifications, name of the companies in which the above Directors hold directorship and membership of the Committee of the Board are detailed in the Notice convening this Annual General Meeting against the relevant item of the Agenda, which forms part of this Annual Report.

Necessary resolutions for the appointment/re–appointment of aforesaid directors have been included in the Notice convening the ensuing Annual General Meeting.

None of the Directors of the Company are disqualified from being appointed as directors as specified in terms of Section 164 (2) (a) & (b) of the Companies Act, 2013.

AUDITORS:

As per Section 139 of the Companies Act, 2013, an individual or a firm as an auditor may be appointed in the general meeting who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting. As per the Companies (Audit and Auditors) Rules, 2014, if an audit firm has been functioning as auditor in the same Company in the first AGM after the commencement of the provisions of Section 139 (2) of the Act for 10 years (or more than 10 years), then maximum number of consecutive years for which the firm may be appointed in the same Company (including transitional period) shall be 3 years. M/s Basant Ram & Sons, Chartered Accountants, New Delhi, Auditors of the Company being eligible, offer themselves for re–appointment. They have furnished a certificate to the effect that their proposed appointment, if made, will be within the limits specified u/s 141 of the Act.

AUDITORS’ OBSERVATIONS & AUDITORS REPORT:

There is no adverse observation in the Auditors’ Report on the Accounts of the Company for the year ended March 31, 2014. During the financial year 2012–13, Company has accepted/ renewed deposits in excess of limits laid down in rule 3 (2)(I) by Rs. 42.34 Lacs and in rule 3(2)(II) by Rs. 190.93 Lacs of Section 58 A and other relevant provision of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules 1975. The notes on the Financial Statements referred to in the Auditors Report are self–explanatory. However, during the financial year 2013–14, Company has refunded out of the said excess amount accepted, Rs.42.34 Lacs and

Rs.175.82 Lacs under rule 3 (2)(I) and rule 3 (2)(II) respectively. The balance amount is also being refunded.

COST AUDITORS:

The Central Government approved the appointment of Mr. Rishi Mohan Bansal as Cost Auditors for conducting Cost Audit for Sugar and Industrial Alcohol business for the Financial Year 2013–14.

The Cost Audit Reports for the last audited accounts for the financial year ended 31st March, 2013 was filed by the Cost Auditors with respect to Sugar and Industrial Alcohol business on 26.8.2013 which is within the due date.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice, the Board of Directors of the Company appointed M/s Sunil K Jain & Associates, Company Secretaries, to conduct the Secretarial Audit Report for the financial year ended March 31, 2014.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, the 98 sections of the Companies Act, 2013 notified vide Ministry of Corporate Affairs Gazette Notification No. S.O. 2754(E) dated September 12, 2013, the Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, Listing Agreements with the Stock Exchanges and the Memorandum and Articles of Association of the Company.

The Company has revised the ‘Proxy Form’ as advised by the ‘Secretarial Auditors’ to confirm with Clause 34 (f) of the Listing Agreement.

FIXED DEPOSITS:

The total amount of fixed deposits as on 31st March, 2014 was Rs.1740.99 Lakhs as against Rs. 2378.67 Lakhs as on 31st March, 2013.

STATUS FOR SALE OF UNN SUGAR COMPLEX

The Company has entered into an agreement on 14.01.2014 with M/s Superior Foodgrains Pvt. Ltd., Chandigarh to sale its unit Unn Sugar Complex, Block Unn, Distt. Shamli on as is where is basis. The Company has obtained shareholders approval by postal ballot on 27.02.2014. As per agreement, the transaction of sale of unit was to be completed by 15th March, 2014, which can be extended upto 15th April, 2014, if in principal approval for transfer of lease of land in favour of the purchaser is not obtained from State Govt. by 15th March, 2014. The validity of the agreement was extended upto 15.05.2014 as the State Govt. has given in principle approval on 11.04.2014 subject to deposit in the value of lease rent in Govt. account by the purchaser. The rate of unearned increase in lease rent could not be finalized by State Govt. and deposited by the purchaser, therefore, the validity of agreement was again extended.

C O N S E RVAT I O N O F E N E R G Y, T E C H N O L O G Y ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 217(1)(e) of the Act, read with Companies

direCtors’ report Contd.....


17

(Disclosure of Particulars in the Report of the Board of Directors), Rules, 1988 are provided in ‘Annexure 1’ and forms part of this Report.

PARTICULARS OF EMPLOYEES:

Particulars of employees as required under Section 217(2A) of the Act, read with Companies (Particulars of Employees) Rules, 1975 as amended are given in ‘Annexure 2’ and forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The performance of both the business segments i.e. sugar and distillery segments of the Company for the year ended 31st March, 2014 and current year prospects as required under Clause 49 of the Listing Agreement has been detailed in the ‘Management Discussion and Analysis Report’ in the section on Corporate Governance.

CORPORATE GOVERNANCE:

Your company complies with all the mandatory requirements as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges. The separate section on “Corporate Governance” including a certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges is given in ‘Annexure –3’ and forms part of this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements of Sub–section 217(2AA) of the Act with respect to Directors’ Responsibility Statement, the Directors confirm:

i) that in the preparation of the Annual Accounts for the year ended March 31, 2014, the applicable Accounting Standards read with requirements set out under Schedule VI to the Act, have been followed and there are no material departures from the same;

ii) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the loss of the Company for the year ended on that date;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) that they have prepared the Annual Accounts of the Company on a ‘going concern’ basis.

LISTING ARRANGEMENT:

The shares of the Company are listed with the Bombay Stock Exchange Limited and Delhi Stock Exchange Limited. The annual listing fee for the year 2014–2015 has been paid to both the stock exchanges.

SUGAR PRODUCTION AND CONSUMPTIONIndian Sugar Mills Association (ISMA), the apex representative body of sugar industry has revised the sugar production estimate to 238 Lac tones from 250 Lac tones for the sugar season 2013–14 (from October, 2013 to September, 2014). In the last sugar season 2012–13 the sugar production was 254 Lac tonnes. Due consideration

has been given to weather conditions prevailing in the last several months including heavy rain fall in certain parts of U.P., availability of water in Maharashtra and north Karnataka and less availability of water in Tamil Nadu. Despite downfall a downward revision in the output of sugar, supply will continue to be ample in the country as the country has started with an opening stock of 107 Lac tones in October, 2013. In the first half of the reaching sugar year the sugar mills have dispatched 125 Lac tones of sugar for sale in the domestic market, due to better lifting during the last few months following the improvement in the market sentiments. The Cabinet Committee of Economic Affairs has, in February, 2014, approved subsidy of Rs.3300/– per MT.on export of raw sugar till the end of March, 2014 to bail out the cash starved sugar industry. The idea was to increase export, which would clear the massive sugar stock lying with the sugar mills and would ease the pressure on the domestic price. The subsidy would be given on export of 40 Lac tonnes of raw sugar over a period of two years and quantum of subsidy would be re–calculated periodically based on the dollar/rupee rate. In the hope of export of sugar the prices of sugar have improved.While the mills were expecting good rates of subsidy due to rupee/dollar fluctuations for the month of April & May, 2014 the Govt. cut it down to Rs.2277/– per tonne in the month of May,2014 after elections. This has adversely affected the export of sugar. So far 4 Lac tones of sugar has been exported which is just 10% of the target and it is feared that with the consumption of approx.230–235 Lac tones the sugar stock will be much on the higher side at the end of September,2014. Industry is also pursuing with the Government to raise the import duty of sugar from 15% to 40% to discourage the import of sugar.TREND IN THE DOMESTIC SUGAR PRICE: The sugar prices which were around Rs.3300/– per qtl. in February/March,2013 came down to Rs.2800/– per qtl. upto mid February, 2014. In the hope of export of sugar the prices of sugar have improved in the month of March and April, 2014 and reached upto Rs.3200/– to Rs.3250/– per qtl. Due to fall in the prices of sugar in the international market the prices of sugar have come down to Rs.3000/– per qtl. The present international sugar price is $475 –480 per tonne. The average sugar realization in the financial year 2013–14 in unit Upper Doab Sugar Mills is Rs.2994.70 per qtl and in Unn Sugar Complex it is Rs.2968.70 per qtl. OUTLOOK AND CHALLENGES BEFORE THE SUGAR INDUSTRY.

Sugar Mills in U.P. have incurred heavy losses during the last few years. Even though the Govt. has announced a few measures to assist the industry, the mills are still not able to recover their cost. On one side cane price arrears of farmers have reached at an all time high while on the other side the sugar mills are defaulted in the payments of their loans leading several mills becoming Non Performing Assets(NPA) or are filing Corporate Debt Re–structuring (CDR). The Centre had come up with a scheme for the industry whereby banks would extend soft loan of Rs.6600 Crores to help in clearing cane price arrears. Out of this only Rs.3000 Crores have been disbursed so far. The banks are reluctant to lend any more because they fear that it would add to their list of Non Performing Assets. The balance cane price outstandings in UP are Rs.8,754/– crores as on 29.05.2014. The Hon’ble High Court at Allahabad have directed the State Government vide its Judgement dated 30th May 2014 of PIL filed by Shri. V.M. Singh that the entire cane price for the season 2013–14 be paid by 30th June 2014.

Contd.....


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Thereafter, the Cane Commissioner, UP has put pressure on the sugar mills to pay the entire cane price in the month of June, 2014 by issuing Recovery Certificate and lodging FIR against the sugar mills. Now on 1st July 2014 the Hon’ble High Court Allahabad have directed the State Government that the necessary steps shall be taken to ensure the payment of balance amount of sugar cane dues to the farmers by 24th July 2014. The Hon’ble High Court has further directed the impleadment of the Union Government as a party respondent to these proceedings and notice be issued to the Union Government. On 24th July, 2014, the Court could not sit and the date of hearing was further extended.Due to unreasonable cane price in U.P. which has aggravated by low sugar recovery and lack of adequate opportunities to export sugar, the mills in U.P. continued to sink further in deeper financial crisis. An independent report India Rating and Research (IND–RA) published titled as 2014 Outlook Sugar Sector Highlights that North South divergence (is) more distinct” It also mentioned that “South based millers should stay afloat (and) north based millers to slide.” The outlook revision reflects the improvement in the credit profiles of millers based in south India from financial year 2014 levels. However, Uttar Pradesh based mills will likely to continue to struggle with high leverages. The report suggests that better opportunities and prospects that would be available in the next year would benefit only south based sugar mills, while the north based mills including those in U.P. would still remain in red. The main reason for that is extremely high cost of producing sugar in U.P. which at the current cane price and sugar realization is Rs.3600/– per qtl. as compared to sugar producing cost of around Rs.3000/ to 3200/– per qtl in Maharashtra and South India. With rationalized sugar cane pricing policies being implemented by the respective State Governments of Maharashtra and Karnataka, which produces almost 50% of the country’s sugar the U.P. sugar Mills will suffer unless and until the cane pricing system is rationalized. The negative outlook for North and U.P based sugar mills would change if “linkage formula” on cane pricing is implemented. It is essential to implement a revenue sharing model for cane price determination from the next sugar season. There is of course the overall euphoria that the new regime of BJP led by Sh.Narendra Modi will be friendlier and could help the sugar industry. The BJP led NDA Government has constituted a committee of Ministers to review the problems of sugar industry to ensure the interest of consumers, cane farmers and sugar mills. The committee has recommended to further extend soft loan of Rs.4400 crores to the sugar industry to help in clearing the cane price arrears, increase in the import duty on import of sugar from 15 % to 40 % to discourage the import of sugar and further continue subsidy of Rs.3300 per MT on export of raw sugar and increase in the admixing of ethanol in petrol from 5 % to 10 %. Of course these are the welcome steps taken by the Union Government which could help the cash starved the sugar industryALCOHOL AND ETHANOL BLENDING The Ethanol Blending Programme is primarily based on indigenously produced ethanol from sugarcane molasses, which besides augmenting fuel availability in the country, would also provide better returns for sugar cane farmers.The Indian Sugar industry has the capacity to produce 250 crore Ltrs of alcohol annually and its major buyers are chemical industry with demand of 60 crores Ltrs , Potable and Alcohol Industry which

sources 110 crore Ltrs and Oil companies need around 100 crore Ltrs.annually. The Government’s ambitious plan to blend petrol with 5% Ethanol has fallen far short of target, creating problems for sugar mills, which supply the alcohol, and the chemical industry, which is complaining that there is a big shortage in the market. Against the requirement of 105 crore litre of ethanol for mandatory 5% blending with petrol, oil companies have contracted just 62 crore litre, half of which is yet to be lifted from depots. Ethanol Blending Programme was launched to promote green fuel and reduce the oil import bill. The sugar industry has estimated that oil companies could have easily saved Rs.370 crore on their oil import bill if they had blended the 62 crore litre supplied by sugar mills in the past year. While oil companies cite ‘procedural delays’ in lifting the Ethanol offered by the supplier sugar mills, the latter is unable to regularize its ethanol production and supply due to non lifting by OMC. While the supply from the first tender was purchased in the price band of Rs.39–42 per litre, oil firms decided in January, 2014 that they would procure ethanol from only those bidders who match their benchmark price of Rs.44/– per litre. On this basis, they also rejected 36 crore litre of ethanol supply from sugar mills. In the meanwhile, the chemical industry filed three cases in the Competition Commission of India (CCI). Two were quashed while one is with the Supreme Court. In its appeal to the apex court, India Glycols has alleged cartelization by sugar mills and oil companies and also submitted that with limited availability of molasses –based ethanol in the country, any diversion of ethanol shall adversely affect the very existence of the chemical industry in India. The ethanol blending programme has faced hassles from all corners, be it price issue with mills, procedural delays due to inter–state policy mismatch and CCI case filed by the chemical industry. As there is surplus sugar production, the Government should take steps for enforcing the mandatory ethanol blending from 5% to 10%. This would divert surplus sugar to the ethanol production and will reduce inventory level of sugar.INDUSTRIAL RELATIONS:The industrial relations remained cordial at all the plants of the Company during the year.APPRECIATION:Your Directors wish to place on record their sincere thanks and appreciation for the devoted services rendered by the employees of the Company at all levels. We also place on record our appreciation to the Financial Institutions, State Bank of India, Punjab National Bank, Zila Sahkari Bank Ltd., other business associates and Government Authorities for their valuable co–operation and support from time to time. We would also like to express our thanks to our Shareholders and Depositors for their continued confidence in the company. We would request the State Govt. of Uttar Pradesh to rationalize cane pricing policy in line of Maharashtra and Karnataka on the revenue sharing models from the next season 2014–15.

For and on behalf of the Board

Place : New Delhi Onke AggarwalDated : 2nd August, 2014 Chairman


19

ANNEXURE ‘1’ TO DIRECTORS’ REPORTINFORMATION AS PER SECTION 217 (1) (e) READ WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2014.A. CONSERVATION OF ENERGYa) Energy conservation measures taken Energy conservation is an on-going activity in the Company and the efforts to conserve energy through improved

operational methods and other means are continuing on a regular basis. Details of measures taken for energy conservation during the financial year 2013-14 at the units, total energy consumption and energy consumption per unit of production are furnished in the prescribed form below.

Upper Doab Sugar Mills No expenditure incurred on Energy Conservation during the year 2013-14. Unn Sugar Complex No expenditure incurred on Energy Conservation during the Season 2013-14. Shamli Distillery & Chemical Works No expenditure incurred on Energy Conservation during the Season 2013-14.

Upper Doab Sugar MillsWe are planning to install the following items as under:-1. To increase the back pressure of 3 nos. power

turbine and 1 no. fibrizor turbine from .70 kg./cm2 to 1.2 kg./cm2

2. To do the synchronizing of Triveni & Kessal Turbine.3. Installation of 9 nos. VFD’s on Cane carrier & Juice

Pump W/J Pump & SJ Pump.4. To convert Cane Fibrizor Fixed type Hammer to swing

type for increasing the PI 80/81 to 84/85.Unn Sugar ComplexReduction of mill rpm from 5.59 to 4.62 is proposed.Shamli Distillery & Chemical WorksProposal is under consideration for plant capacity expansion from 25 KLPD to 45 KLPD. There is also plan to install Wash to E.N.A. Multi Pressure Distillation Plant and 20 KLPD R.S. to Absolute Alcohol Plant with Molecular Sieve Dehydration Technology.Upper Doab Sugar Mills

1. After increasing the back pressure on Turbine, our boiling house performance may be improved i.e. boiling will be faster. So automatically in that proportion, crushing may be increased.

2. After doing the synchronizing in power turbine and kessel our cushion range may be increased and helpful for sharing the load in normal running of turbines.

3. After installing the VFD’s approximately, 20% electricity power may be saved.

4. After changing the fibrizor from fixed to swing type PI will increase so automatically mill extraction may increase and loading on mill will be reduced proportionally. Efficiency of mills may be improved.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

c) Impact of the measure at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production of goods.

Contd.....


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Particulars in respect of Sugar & Distillery Units of the Company as per Form ‘A’.

Sugar Unit Distillery Sugar Unit Distillery (A) Power and fuel consumption : Current Year Current Year Previous Year Previous Year 1. Electricity : a) Purchased (Units) 16,46,425 8,556 24,72,000 7,958 Total amount (Rs.) 1,00,68,309 1,18,088 1,51,56,492 1,11,505 Rate/Unit (Rs.) 6.12 13.80 6.13 14.01 b) Own Generation : i) Through Diesel Generator (Units) 6,51,725 28,724 6,15,860 39,664 Unit per Ltr. of Diesel oil 2.81 2.52 2.89 2.52 Cost/Unit (Rs.) 22.52 29.29 14.86 20.98 ii) Through steam Turbine (Units) 2,95,38,712 38,46,219 2,62,96,694 43,62,495 Unit per pound of Steam 1.728 0.09637 1.704 0.08870 Cost/Unit (Rs.) 1.42 5.39 1.52 5.27 2. Coal (specify quality and where used) : a) Fire-wood used in Boilers: Quantity (MT) NIL NIL NIL NIL Total value (Rs.) NIL NIL NIL NIL Average Rate per MT (Rs.) NIL NIL NIL NIL b) Saw Dust : Quantity (MT) NIL NIL NIL NIL Total value (Rs.) NIL NIL NIL NIL Average Rate per MT (Rs.) NIL NIL NIL NIL c) Paddy Husk Quantity (MT) NIL 750.70 NIL 497.79 Total value (Rs.) NIL 28,46,768 NIL 19,53,695 Average Rate per MT (Rs.) NIL 3,792.17 NIL 3,924.74 3. Furnace oil : Quantity (KL) NIL NIL NIL NIL Total value (Rs.) NIL NIL NIL NIL Average Rate per KL (Rs.) NIL NIL NIL NIL

Unn Sugar ComplexIt will improve the milling efficiency and will reduce the loss in bagasse from 0.65 to 0.60. It will also improve moisture % bagasse.Shamli Distillery & Chemical WorksWith new Multi Pressure Wash to E.N.A. Distillation Technology overall consumption of Steam for production of E.N.A. therefore, there will be net saving of Steam by approx. 4.0 Kg/Liter.With new Molecular Sieve Dehydration Technology, there will be a Net Saving of Steam by 1.0 Kg/Liter.By increasing our capacity from 25 KLPD to 45 KLPD, the power consumption per litre of Alcohol produce will reduce.Due to increase in capacity, there will be an increase in Bio Gas Generation, which will save the fuel.

Annexure to direCtors’ report Contd.....

d) Total Energy consumption and energy consumption per unit of production as per Form ‘A’ of the Annexure in respect of industries specified in the schedule thereto.


21

4. Other (own bagasse) Quantity (MT) 3,14,937 16,631 2,87,723 18,254 Total value (Rs.)* 59,17,02,848 2,99,08,374 41,68,85,810 2,81,30,663 Average Rate per MT (Rs.) 1,878.80 1,798.32 1,448.91 1,541.11*Bagasse, a residual received after crush of cane, is used as fuel in boilers. The notional value of the same has been taken at average sale price for the year.(B) Consumption per unit of production : Products Sugar Alcohol Sugar Alcohol Unit Qtls. BL Qtls. BL Electricity KWH 27.67 0.4018 28.32 0.4187 Furnace oil KL NIL NIL NIL NIL Fire-wood MT NIL NIL NIL NIL Bagasse MT 0.274 0.0024 0.277 0.0025 Saw Dust NIL NIL NIL NIL Paddy Husk NIL 0.00010 NIL 0.00006B. TECHNOLOGY ABSORPTION EFFORTS MADE IN TECHNOLOGY ABSORPTION AS PER FORM ‘B’I) Research & Development (R&D) 1. Specific Areas Upper Doab Sugar Mills & Unn Sugar Complex

The Company has signed MOU with Indian Institute of Sugarcane research, Lucknow and made action plan and sugar cane development programme for both sugar units for two years duration from March 2013 to March 2014 under following activities:

1. Varietal replacement 2. demonstration of sugarcane production technologies 3. soil analysis and development of soil fertility map. 4. Monitoring and management of major insect pests and diseases, 5. Establishment of bio-control laboratory 6. On farm trial of farm machineries, 7. Post harvest management, 2. Benefits derived as a results of the above R & D Upper Doab Sugar Mills & Unn Sugar Complex • The Sugarcane Development Programme will help to develop

new improved high yield and high sugar recovery varieties of sugarcane, innovation in sugarcane.

• Awareness about the best practices and cultivation of new and improved varieties of the sugar cane to the growers to obtain the better yield and better quality of cane has been created.

3. Future plan of action Upper Doab Sugar Mills The Company has signed MOU with Indian Institute of

Sugarcane research, Lucknow and made action plan and sugar cane development programme for unit Upper Doab Sugar Mills for one year duration from March 2014 to March 2015 under following activities:

1. Varietal replacement 2. Demonstration of sugarcane production technologies. 3. Soil analysis and development of soil fertility map. 4. Technical advisory service to enrich the biocompost. 5. Technical support for establishment of bio-control laboratory. 6. Advisory service for monitoring and management of major

insect pests such as white grub, top borer etc. and diseases of sugarcane.

Contd.....


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7. On farm trial of farm machineries developed by IISR. 8. Training to the mill officials, development staff and providing

technical input in organizing field days/Kisan Gosthis by sugar mill in the command area.

Unn Sugar Complex To encourage farmers to do autumn planting on a large scale for

facilitating multiple cropping which would in turn maximize their returns and would result in better recovery.

Shamli Distillery & Chemical Works By installation of multi pressure distillation plant during

expansion of the Distillery Capacity, there will be sharp improvement in E.N.A. quality which will be used for I.M.F.L. bottling and export of E.N.A.

4. Expenditure on R & D: a) Capital NIL b) Recurring Rs. 62,04,943 c) Total Rs. 62,04,943 d) Total R & D expenditure as a percentage of total turnover 0.13%II. Technology absorption, adaptation and innovation: 1. Efforts, in brief, made towards technology Upper Doab Sugar Mills Absorption, adaptation and innovation Planning to adopt the technology of Co-gen Unn Sugar Complex Planning for steam reduction. It is a continuous ongoing process. As

and when new technology is available, it would be implemented after evaluation.

2. Benefits derived as a result of the above efforts, Upper Doab Sugar Mills e.g. product improvement, cost reduction, Reduction in steam consumption and better operational product development, import substitution etc. efficiencies. Unn Sugar Complex Reduction in steam consumption and better operational

efficiencies. 3. In case of imported technology (imported during last five years reckoned from the beginning of the financial year), following information may be furnished: a) Technology imported b) Year of import c) Has technology been fully absorbed? No Technology has been imported during the last five years. d) If not fully absorbed, areas where this has not taken place, reasons there for, and future plans of actionC. FOREIGN EXCHANGE EARNINGS AND OUTGO a) Activities relating to exports, initiative taken to There was no export of Company’s own products during the year. increase exports, development of new export markets for products and service and export plans. b) Total Foreign Exchange used and earned: Used Rs. NIL Earned Rs. NIL

For and on behalf of the Board Place : New Delhi Onke AggarwalDated : 2nd August, 2014 Chairman

Annexure to direCtors’ report Contd.....


23


Place : New Delhi Onke AggarwalDated : 2nd August, 2014 Chairman

Corporate Governance is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to values. The detailed report on Corporate Governance as prescribed by SEBI and incorporated in clause 49 of the listing agreement is set out below.

(1) COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE: The Company continues to believe that good corporate governance is the function of adherence to ethical business practices

and introduction of value based systems and procedures in the organization. The corporate governance in this way shall usher in an era of enhancement of intrinsic strength of the organization as also its stake holders. The Company further believes that such practices are founded upon the core values of transparency, empowerment, accountability, independent monitoring and environmental consciousness. The Company makes its best endeavor to uphold and nurture these core values in all aspects of its operations.

ANNEXURE ‘3’ TO THE DIRECTORS’ REPORT ON CORPORATE GOVERNANCE FORMING PART OF THE DIRECTOR’S REPORT

ANNEXURE ‘2’ TO DIRECTORS’ REPORTSTATEMENT CONTAINING INFORMATION AS PER SECTION 217 (2A) (b) (ii) READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES 1975, AS AMENDED UP-TO-DATE, AND FORMING PART OF DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2014.

A. EMPLOYED THROUGHOUT THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION IN AGGREGATE OF NOT LESS THAN Rs. 60,00,000 PER ANNUM.

Sl. Name Age/ Designation/ Qualification Experi- Date of Remun- Previous EmployerNo. Years Nature of ence commence- eration Duties (Years) ment of paid employment (Rs.)

NIL

B. EMPLOYED FOR PART OF THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION AT A RATE NOT LESS THAN Rs. 5,00,000 PER MONTH.

Sl. Name Age/ Designation/ Qualification Experi- Date of Remun- Previous EmployerNo. Years Nature of ence commence- eration Duties (Years) ment of paid employment (Rs.)

NIL

Contd.....


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(2) BOARD OF DIRECTORS: Composition and Category: The Company’s policy is to maintain optimum combination of Executive and Non–Executive Directors. The present strength of the

Board of Directors is 8, out of which 3 are independent directors. The Chairman of the Board is the Non–Executive Director. The Board meets the requirement of not less than one– third being independent directors. All our Directors inform the Company Secretary every year about the Board membership and Board Committee membership the Directors occupy in other companies including Chairmanship. They notify us of any change as and when it takes place. Our Company Secretary places these disclosures before the Board. The category, composition, attendance of each director at the Board Meetings, last annual general meeting and number of other directorship and chairmanship/ membership of committees of each director in various Companies is given hereunder:

Sl. Name of Director Category Attendance at Attendance No. of other Membership/No. Board Meetings* at last AGM Directorship Chairmanship in Held on held Committees of 23.09.2013 other Companies

Public Private Chairman Member

1. Sh. Onke Aggarwal Non–Executive 7 Yes – – – – Chairman Independent

2. Sh.Rajat Lal Promoter 7 Yes – – – – Managing Director Executive

3. Sh.Vivek Viswanathan Promoter 7 Yes – – – –

Joint Managing Director Executive

4. Sh. Rahul Lal ## Promoter 5 Yes – – – – Executive Director Executive

5. Sh. Hemantpat Singhania Non–Executive 7 No 1 2 3 4 Independent

6. Smt. Sudha Singhania # Non–Executive 0 No – – – – Director

7. Sh. R.L. Srivastava Non–Executive 7 Yes 1 – 1** 1 Independent

8. Sh.R.C. Sharma Non–Executive 7 Yes 5 – 1 5 Independent

9. Smt. Radhika Viswanathan Non–Executive 5 No – – – – Hoon

*During the financial year 2013–14 seven Board Meetings were held on 27.04.2013, 30.05.2013, 27.07.2013, 23.09.2013, 26.10.2013, 04.01.2014 and 08.02.2014.

**Shri R.L. Srivastava is a Chairman and member of two committees of the same company.

#Smt. Sudha Singhania has ceased to be Director w.e.f. 27.04.2013.

## Sh. Rahul Lal has been appointed as Additional Director in the Board Meeting held on 27.04.2013 and as Executive Director in the Board Meeting held on 30.05.2013 w.e.f. 01.07.2013.

The Company has held at least one Board Meeting in every three months.

Brief profile of all the Directors, nature of their expertise in specific functional area etc. have been put on the Company’s Website.

The composition and structure of the Board is reviewed regularly by the Board keeping in mind the overall size of the Board, the balance between non–executive, independent and executive directors, age, experience and other attributes of the directors and changes in the Board.

CorporAte GovernAnCe Contd.....


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Board Procedure

All divisions/departments in the Company are encouraged to plan their functions well in advance, particularly with regard to matters requiring discussions/approval/ decisions in the Board and Committee Meetings. All such matters are communicated to the Secretary in advance by the Departments /Divisions. Secretary segregates the ones that can be discussed and decided internally and ones which need to be put up before the board, in consultation with the Chairman, Managing Director and/ or Joint Managing Director.

The Board meets atleast once a quarter to review the quarterly performance, operational performance and the financial results of the company. The Board and Committee meetings are scheduled well in advance and a Calendar for the year of Board and Committee Meetings are circulated. The Notice and Agenda of each Board and Committee meeting is given in writing to each Director. All the items on the Agenda are accompanied by supporting papers giving comprehensive information on the related subject. The Agenda and the relevant supporting papers are sent in advance separately to each Director. The Agenda papers submitted to the Board clearly indicate what decision is required. In special and exceptional circumstances, additional or supplementary item(s) on the Agenda are permitted with the permission of Chairman.

The information as specified in Annexure I to clause 49 of the Listing Agreement is regularly made available to the Board. To enable the Board to discharge its responsibilities effectively, the members of the Board are briefed at every Board meeting on the overall performance of the company. In addition to matters statutorily requiring Board’s approval, all major decisions involving policy formulation, capital expenditure budgets, new investments, compliance with statutory / regulatory requirements etc., are considered by the Board. The Board has established procedures to enable the Board to periodically review compliance reports of all laws applicable to the Company, prepared by the Company, as well as steps taken by the Company to rectify instances of non–compliance.

The Chairman and/or Managing Director or Joint Managing Director explains the proposal put up before the Board, the background and the expectations of the proposal in the short as well as the long term to contribute to the growth of the company. If need be, a presentation is made by the concerned executive and clarifications given. The Board then deliberates all these issues and comes to a decision. The Chairman encourages participation and considers the views of all the Directors.

Secretary records the minutes of the proceedings of each Board and Committee Meeting. The minutes recorded are self explanatory and decision arrived at the meeting are properly recorded. Draft minutes are circulated to all the members of the Board/ Committee for their comments. The minutes are entered in the Minute Book within 30 days from conclusion of the meeting and are confirmed at the subsequent meeting.

Board decisions are promptly and clearly communicated to the operating management for implementation. An Action Taken Report is submitted to the Board/Committee at the subsequent meetings till the decisions are fully implemented.

The Secretary while preparing the Agenda, Notes on Agenda, Minutes etc. of the meeting(s), is responsible for and is required to ensure adherence to all the applicable laws and regulations including the Companies Act, 1956/2013 read with the Rules issued thereunder, any amendment thereof and the Secretarial Standards recommended by the Institute of Company Secretaries of India.

Details of Directors seeking reappointment at the ensuing Annual General Meeting

In respect of Directors seeking appointment or reappointment, the Notice for the Annual General Meeting contains all the relevant information, like brief resume of the Directors, nature of their expertise in specific functional areas and name of the companies in which they hold Directorship and Membership of any Committee of the Board.

Code of Conduct for Board Members and Senior Management Team

Code of Conduct for the Directors as well as for the members of the Senior Management of the company was adopted in the Board Meeting held on 4th April, 2005. The Code is intended to serve as a basis for ethical decision–making in conduct of professional work. The Code of Conduct states that each individual in the organization must know and respect existing laws, accept and provide appropriate professional views and be upright in his conduct and observe corporate discipline. The said Code of Conduct has been circulated to all the Directors and Members of Senior Management and the compliance of the same has been affirmed by them in respect of the Financial Year 2013–14 and a declaration to that effect signed by the Managing Director is detailed below and forms part of this report. A copy of Code of Conduct has also been put on the Company’s Website – www.sirshadilal.com

DECLARATION REGARDING COMPLIANCE OF CODE OF CONDUCT

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, all Board Members and Senior Management Personnels have affirmed compliance with Sir Shadi Lal Enterprises Limited, Code of Business Conduct and Ethics for the year ended March 31, 2014.


Place : New Delhi RAJAT LALDated : 2nd August, 2014 Managing Director

Contd.....


26

COMMITTEES OF THE BOARDThe Company has constituted following Board level Committees:(3) AUDIT COMMITTEE: (a) Composition: The Board has constituted Audit Committee consisting of following Directors:–

Sl.No. Name of the Director Category Attendance at Audit Committee Meeting*

1. Sh. R.L. Srivastava, Chairman Non–Executive Independent Director 5 2. Sh. Onke Aggarwal, Member Non–Executive Independent Director 5 3. Sh. R.C. Sharma, Member Non–Executive Independent Director 4

All the members of the Audit Committee are financially literate and more than one member possesses accounting and related financial management expertise. The concerned officials responsible for the finance function, the head of internal audit are invitees to the Audit Committee.

The Chairman of the Audit Committee attended the Annual General Meeting held on 23.09.2013 to answer shareholders’ queries.

Sh. P.K. Goyal has been appointed as Secretary of the Company and act as Secretary of the Audit Committee.

The composition of the Audit Committee meets the requirements of Section 292(A) of the Companies Act, 1956 and Clause 49 of the Listing Agreement.

* During the year five meetings of Audit Committee were held on 26.04.2013, 29.05.2013, 26.07.2013, 25.10.2013 and 07.02.2014.

(b) Terms of Reference:

The Audit Committee has powers to investigate any activity within its terms of reference, seek information from any employee, obtain outside legal or other professional advice and to secure attendance of outsiders with relevant expertise, if it considers necessary. The terms of reference of the Audit Committee includes to exercise powers and discharge functions as stipulated in clause 49 of the Listing Agreement read with Section 292A of the Companies Act, 1956.

The primary purpose of the Audit Committee is to monitor and provide effective supervision of the Company’s financial reporting processes in order to ensure timely, accurate and proper disclosure and the transparency, integrity and quality of financial reporting. The Audit Committee besides other activities reviews the quarterly/Annual Financial Results which thereafter goes to Sub–Committee for consideration of unaudited quarterly financial results/Board for approval.

The Audit Committee also reviews Management discussion and analysis of financial conditions and results of operations, Statement of significant related party transactions, Directors responsibility statement included in the Board’s Report in terms of Clause (2AA) of Section 217 of the Companies Act, Management Letters/ Letters of Internal Control Weaknesses issued by the Statutory Auditors and Internal Audit Reports relating to Internal Control Weaknesses.

The Audit Committee also recommends the appointment of Cost Auditor pursuant to the Circular No.52/5/CAB–2012, dated April 11, 2012 of Government of India, Ministry of Corporate Affairs, Cost Audit Branch, New Delhi. Audit Committee also ensures that the Cost Auditor is free from any disqualification u/s 233 B (5) read with Section 224 and Sub Section (3) or Sub Section (4) of Section 226 of the Companies Act, 1956. The Audit Committee also obtains a Certificate from the Cost Auditor certifying its independence and arms length relationship with the company.

(4) REMUNERATION COMMITTEE: a) Composition & Terms of Reference: The Remuneration Committee consisting of the following Non–Executive Independent Directors was constituted/ reconstituted

to determine on their behalf and on behalf of the shareholders with agreed terms of reference, the company’s policy on specific remuneration package for Executive Directors.

Sl.No. Name of the Director Category Attendance at Remuneration Committee Meeting* 1. Sh. Onke Aggarwal, Chairman Non–Executive Independent Director 1 2. Sh. R.L. Srivastava, Member Non–Executive Independent Director 1 3. Sh. R.C. Sharma, Member Non–Executive Independent Director 1

* During the year one meeting of Remuneration Committee was held on 29.05.2013. Sh. P.K. Goyal has been appointed as Secretary of the Company and act as Secretary of the Remuneration Committee.



27

(5) NOMINATION COMMITTEE

The Nomination Committee considers the proposal for searching, evaluating and recommending appropriate Independent and Non–Executive Directors to the Board, based on an objective and transparent set of guidelines.

Sl. No. Name of the Director Designation Category Attendance at Nomination Committee Meeting*

1. Sh. Hemantpat Singhania Director Non Executive Independent 1 Chairman

2. Sh. Rajat Lal Managing Director Executive Director 1

3. Sh. Vivek Viswanathan Joint Managing Director Executive Director 1

4. Sh. Onke Aggarwal Director Non Executive Independent 1

5. Sh. R.C. Sharma Director Non Executive Independent 1

Sh. P.K. Goyal has been appointed as Secretary of the Company and act as Secretary of the Nomination Committee.

* During the year one meeting of the Nomination Committee was held on 27.04.2013.

The Board of Directors of the Company has re–constituted Remuneration Committee and Nomination Committee of the Company as Nomination and Remuneration Committee in its meeting held on 27.05.2014 consisting of three members viz. Sh. R.C. Sharma, Chairman, Sh. Onke Aggarwal, Member and Sh. R.L. Srivastava, Member. Sh. P.K. Goyal will act as Secretary of the Nomination and Remuneration Committee.

b) Remuneration Policy:

Non–Executive Directors

The remuneration to the Non–executive Directors is decided and approved unanimously by the Board of Directors. The Non–Executive Directors are paid remuneration by way of sitting fees and commission not to exceed limits prescribed under the Companies Act.

The Non–Executive Directors are entitled to commission @ 1% of the Net Profit as approved by the shareholders and sitting fees @ Rs.12,000/– for each meeting of the Board or any Committee thereof attended by them. All the non–executive Directors are paid equal commission. Those who have worked for part of the year are being paid proportionately.

No commission was paid to the Non–Executive Directors during the year because of inadequacy of profit/losses.

Executive Directors

The remuneration committee has been constituted to frame and implement on behalf of the Board and on behalf of the shareholders, a credible and transparent policy on remuneration of Executive Directors. The Remuneration Committee also consider, approve and recommend to the Board of Directors the designation and increase in salaries for the Executive Directors, keeping in view the remuneration package offered by the other Corporate Houses of the industry. The policy, inter–alia, provides for the following:

– Salary and commission not to exceed limits prescribed under the Companies Act, 1956

– Revision from time to time depending upon the performance of the company, individual Director’s performance and prevailing industry norms.

– No sitting fees.

The remuneration paid to the Executive Directors of the Company is approved by the Board of Directors on the recommendations of the Remunerative Committee.

Presently, as the Company does not have any scheme of stock option plan, therefore the incentive by way of commission on profits is considered for the Directors/Executive Directors in remuneration package.

Contd.....


28

c) Details of Remuneration to all the Directors for the year ended March 31, 2014 (i) Remuneration to Non–Executive Directors During the Financial Year, there was no pecuniary relationship or transaction between the Company and any of its

Non–Executive Directors.

Sl.No. Name of the Director Category Commission Sitting Total For Service contract/ No. of (Rs.) fee (Rs.) Notice period/ Shares (Rs.) Severance fees Held

1. Sh. Onke Aggarwal Non–Executive – 216000 216000 Retirement by Rotation 31710 Chairman Independent 2. Sh. Hemantpat Singhania Non–Executive – 108000 108000 Retirement by Rotation – Independent 3. Smt. Sudha Singhania* Non–Executive – 0 0 Retirement by Rotation 46167 4. Sh. R. L. Srivastava Non–Executive – 156000 156000 Retirement by Rotation – Independent 5. Sh. R.C. Sharma Non–Executive – 156000 156000 Retirement by Rotation – Independent 6. Smt. Radhika Non–Executive – 60000 60000 39132 Viswanathan Hoon Total 696000 696000

*Smt. Sudha Singhania has ceased to be Director w.e.f. 27.04.2013.

(ii) Managing and Whole–time Directors

Sl.No. Name of the Director Category Salary Perquisites* Commission Total Service contract/ notice period/ (Rs.) (Rs.) (Rs.) (Rs.) severance fees 1. Sh.Rajat Lal, Executive 1200000 1255406 – 2455406 Contractual** Managing Director 2. Sh. Vivek Viswanathan, Executive 1080000 1062998 – 2142998 Contractual** Joint Managing Director 3. Sh. Rahul Lal, Executive 540000 530979 1070979 Contractual** Executive Director # Total 2820000 2849383 – 5669383

* Perquisites include house rent allowance, electricity & fuel charges, medical reimbursement, medi–claim and personal accident insurance premium, Company’s Contribution to provident fund and superannuation fund.

** Appointment is for five years period. Notice period is six calendar months, on either side. # Sh. Rahul Lal has been appointed as Executive Director w.e.f. 01.07.2013.

6) SHAREHOLDERS COMMITTEES:

The Board of Directors has constituted the following Committees of shareholders: a) Shareholders/Investors Grievance Committee. b) Share Transfer Committee. c) Sub Committee for consideration of unaudited Quarterly Financial Results. The Shareholders/Investors Grievance Committee looks after the cordial investor relations and oversees the mechanism for redressing

of shareholders and investors complaints like non–receipt of Annual Report, non–receipt of declared dividend warrants and transfer of shares. Share transfers/transmissions are approved by the Share Transfer Committee and are placed at the Board Meeting from time to time.

a) Shareholders/Investors Grievance Committee:

Sl. Name of the Director Attendance at Shareholders / Category No. Investors Grievance Committee 1. Sh. Hemantpat Singhania, Chairman 1 Non–Executive Independent Director 2. Sh. Rahul Lal * 1 Executive Director 3. Sh. Vivek Viswanathan 1 Executive Director



29

Sh. P.K. Goyal has been appointed as Secretary of the Company and act as Secretary/Compliance Officer of the Shareholders/Investors Grievance Committee.

During the year one meeting of Shareholder/Investor Grievances Committee was held on 08.02.2014. There was no investor complaint outstanding as on 31.03.2014.

*Sh. Rahul Lal has been nominated as member of Shareholder/Investor Grievances Committee w.e.f. 26.10.2013. b) Share Transfer Committee:

Sl.No. Name of the Director Designation Category Attendance at committee meeting* 01. Sh. Rajat Lal Managing Director Executive Director 11 02. Sh. Vivek Viswanathan Joint Managing Director Executive Director 10 03. Sh. Rahul Lal ** Executive Director Executive Director 10

*During the year eleven meetings of Share Transfer Committee were held on 16.04.2013, 20.08.2013, 17.09.2013, 10.10.2013, 01.11.2013, 28.11.2013, 20.12.2013, 16.01.2014, 21.02.2014, 13.03.2014 and 31.03.2014.

Sh. P.K. Goyal has been appointed as Secretary of the Company and act as Secretary/Compliance Officer of the Share Transfer Committee.

**Sh. Rahul Lal has been nominated as member of Share Transfer Committee w.e.f. 27.07.2013. The Company has registered and delivered to the shareholders all the valid applications received for transfer/transmission/remat/ split/

consolidation of shares during the year within the stipulated time, and there were no shares pending for transfer as on 31.03.2014. c) Sub–Committee for consideration of Unaudited Quarterly Financial Results. This Committee looks after and considers Unaudited Quarterly Financial Results on a quarterly basis, after the same has been

recommended by Audit Committee.

Sl.No. Name of the Director Designation Category Attendance at Cane Development Committee meeting* 1. Sh. Rajat Lal Managing Director Executive Director 4 2. Sh. Vivek Viswanathan Joint Managing Director Executive Director 4 3. Sh. Onke Aggarwal Director Non Executive Independent 4

Sh. P.K. Goyal has been appointed as Secretary of the Company and act as Secretary/Compliance Officer of the Sub–Committee. * During the year four meetings of Sub–Committee were held on 26.04.2013, 26.07.2013, 25.10.2013 and 07.02.2014.

(7) GENERAL BODY MEETINGS: Location and time where last three Annual General Meetings were held as given below:–

Sl. No. Particulars of Annual General Meeting Date Location of the Meeting Time

01. 77th A.G.M. in respect of the 22.09.2011 P.H.D.House, Opp. Asian Games Village, 11.30 A.M. year 2010–2011 New Delhi – 110 016.



In the last Annual General Meeting, following Special Resolution was passed.

“Resolved that in accordance with the provisions of sections 198, 269, 309, 310 and 311 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or enactment thereof) for the time being in force and subject to the approval of Central Government, and such other approvals as may be required, the consent of the company be and is hereby accorded to the appointment of Shri Rahul Lal as Executive Director of the Company for a period of five years with effect from 01.07.2013 on the terms, conditions including as to remuneration as set out in the explanatory statement to this resolution.”

“Resolved further that the Remuneration Committee/Board of Directors of the company be and is hereby authorized to alter, vary and modify the terms and conditions of the said appointment including as to remuneration and perquisites as specified in the explanatory statement to the extent the Remuneration Committee/Board of Directors may consider appropriate and as may be permitted or authorized in accordance with the provisions of the Companies Act, 1956 and schedule XIII appended thereto for the time being in force or any statutory modification or re–enactment thereof and/or in rules or regulations promulgated thereunder.”

Contd.....


30

Following resolution, which required the members’ approval through Postal Ballot, was transacted during the Financial Year 2013–14.

“RESOLVED that pursuant to the provisions of Section 180(1)(a) of the Companies Act, 2013 and Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2011, as amended from time to time, and other applicable provisions, if any, of the Companies Act, 1956 and/or the Companies Act, 2013 (including any amendment thereto or re–enactment thereto for the time being in force), the Memorandum and Articles of Association of the Company and subject to the other applicable statutory provisions, rules, regulations, guidelines, and subject to consents, approvals, sanctions and permissions as may be required from the concerned Statutory Authorities and subject to such terms and conditions as may be imposed by them, consent of the Members of the Company be and is hereby accorded to the Board of Directors of the Company(herein after referred to as ‘the Board’ which expression shall also include a Committee thereof constituted by the Board in this regard) to sell, transfer, or otherwise dispose of the undertaking of the Company comprising its “Unn Sugar Complex” unit as a ‘going concern’ by way of slump sale or otherwise, at such price not lower than the value of the Net Block of the Fixed Assets of this unit on the Transfer Date and the consideration for the Net Current Assets to be transferred on the Transfer Date at Net Realizable Value and on such other terms and conditions as may be decided by the Board of Directors, effective from such date, as the Board may deem appropriate in the best interest of the Company.”

“RESOLVED FURTHER THAT the Board be and is hereby authorized to do and perform all such acts, matters, deeds and things, as may be necessary, without further referring to the Members of the Company, including finalizing the terms and conditions, methods and modes in respect thereof, determining the exact effective date, and finalizing and executing necessary documents including agreements, deeds of assignments, conveyance and such other documents as may be necessary or expedient in its own discretion and in the best interest of the Company including the power to delegate, to give effect to this Resolution.’’

(8) OTHER DISCLOSURES: a) Related Party Transactions There are no transactions of the company of material nature with promoters, directors, management, subsidiaries or

relatives etc. which would have potential conflict with the interests of the company at large. Attention of members is drawn to the disclosure of transactions with the related parties set out in Note No. 3.10 of the Financial Statement.

b) Disclosure of Accounting Treatment in preparation of Financial Statements In the preparation of the financial statements, the Company has followed the guidelines of Accounting Standards laid

down by the Institute of Chartered Accountants of India. There are no cases, wherein treatment different from that prescribed in Accounting Standards has been followed.

c) Risk Management Business risk evaluation and management is an ongoing process within the Company, which is periodically reviewed by

the Board of Directors for determining its effectiveness. d) There have been no instances of non–compliance, penalties, structures imposed on the Company by Stock Exchange or

SEBI or any statutory authority on any matter related to capital markets during the last three years.

e) The Company has fully complied with all the mandatory requirement of clause 49 of the Listing Agreement of the Stock Exchange. The company has submitted the quarterly compliance status report to the Stock Exchanges within the prescribed time limit.

f) Adoption of non–mandatory requirements of Clause 49 of the Listing Agreement is being reviewed by the Board from time to time. The Company has adopted non–mandatory requirement of Clause 49 of Listing Agreement viz. (i) Remuneration Committee of the Board which has been constituted to recommend/review the remuneration package for the Executive Directors (ii) Nomination Committee to consider proposals for searching, evaluating and recommending appropriate and Independent Directors and Non–Executive Directors to the Board based on an objective and transparent set of guidelines.

g) The Company does not have any subsidiary Company.(9) MEANS OF COMMUNICATIONS: Quarterly Results: The Company’s quarterly financial results are normally published in the “Emerging World” in English and

“Naya India” in Hindi, News Papers. The quarterly/half yearly/annual financial results of the Company are regularly submitted to the Delhi Stock Exchange Limited and Bombay Stock Exchange Limited where the shares of the Company are listed.

Website : The Company’s financial results are also displayed on the Company’s website – www.sirshadilal.com. As per the requirements of Clause 52 and 54 of the Listing Agreement, all the data related to quarterly financial results, shareholding pattern etc. is posted on corpfiling website i.e. www.corpfiling.co.in. and also on the company’s website. The website also provides the basic information about the company e.g. details of its business, financial information, compliance with corporate governance, contact information of the designated officials of the company who are responsible for assisting and handling investor grievances. The information provided on the website is being updated regularly.



31

In pursuance of circular bearing no.17/2012 dated 21.04.2012 and 18/2012 dated 29.04.2012 issued by the Ministry, various notices/documents (including notice calling Annual General Meeting, Audited Financial Statements, Directors’ Report, Auditors’ Report, etc) are being sent to the shareholders through electronic mode to the registered e–mail addresses of the shareholders.

(10) MANAGEMENT DISCUSSION & ANALYSIS An Overview Your Company’s operations are broadly divided into two business segments i.e. “Sugar” and “Alcohol.”. The by–product molasses

is used in the distilleries for manufacture of alcohol & ethanol. The segment–wise performance has already been reported vide Note No. 3.12 of Notes attached to the Annual Accounts under report.

The segment–wise detailed management discussion and analysis is stated below: Cane Price U.P. Government has declared the State Advisory Price (SAP) for the season 2013–14 at Rs. 280/– per quintal for General

variety, Rs. 290/– per quintal for early variety and Rs. 275/– per quintal sub standard variety. The FRP for the season 2013–14 declared by the Central Government was Rs. 210/– per quintal linked to basic recovery of 9.50% subject to premium of Rs.2.21 per quintal of every 0.1% increase in recovery.

The Sugar Mills of U.P. State opposed against the SAP in the season 2013–14 declared by the State Government and sent notice for suspension of operation for the season 2013–14. Many representations were made by the U.P. Sugar Mills Association and there arrived a settlement between the private sugar Mills and U.P. Government, by which the State Government allowed a relief of Rs. 11.03 per quintal of cane in the shape of Purchase Tax Rs. 2/– per quintal of cane, on Entry Tax Rs. 2.73 per quintal on Society Commission Rs. 6.30 per quintal of cane. The rebate of purchase of Rs.. 2/– per quintal was also given in the season 2012–13 by the U.P. Government. The Entry Tax is collected from Customer and deposited in Govt. Account. Therefore the actual relief was only Rs. 6.30 per quintal on Society Commission, which also will be reimbursed after two months of submission of claim.

The U.P. Govt. has also agreed that the Sugar Mills will make payment of Rs. 280/– per quintal in two instalments. Ist instalment of Rs. 260/– will be paid immediately at the time of purchase of cane and 2nd instalment of Rs. 20/– per quintal , after closure of the season 2013–14. It has also been informed by the U.P. Govt. that to review the further relief of Rs. 8.97 per quintal of cane (Rs. 20 – Rs. 11.03), the State Govt. formed a Committee to determine the paying capacity of sugar mills. If the prices of sugar falls below the level determined by the Committee then the entire amount of Rs. 8.97 per quintal will be borne by the Govt. and if the prices of sugar rises above the level, determined by the Committee, the industry will bear the entire burden of balance amount.

As agreed by U.P. govt. the Committee will give its report within 3 months. No report or recommendation for balance amount of Rs. 8.97 has been given by the Committee so far.

Sugar Production & Consumption Indian Sugar Mills Association (ISMA), the apex representative body of sugar industry has revised the sugar production estimate to

238 Lac tones from 250 Lac tones for the sugar season 2013–14 (from October, 2013 to September, 2014). In the last sugar season 2012–13 the sugar production was 254 Lac tonnes. Due consideration has been given to weather conditions prevailing in the last several months including heavy rain fall in certain parts of U.P., availability of water in Maharashtra and north Karnataka and less availability of water in Tamil Nadu. Despite downfall a downward revision in the output of sugar, supply will continue to be ample in the country as the country has started with an opening stock of 107 Lac tones in October, 2013. In the first half of the reaching sugar year the sugar mills have dispatched 125 Lac tones of sugar for sale in the domestic market, due to better lifting during the last few months following the improvement in the market sentiments. The Cabinet Committee of Economic Affairs has, in February, 2014, approved subsidy of Rs.3300/– per MT.on export of raw sugar till the end of March, 2014 to bail out the cash starved sugar industry. The idea was to increase export, which would clear the massive sugar stock lying with the sugar mills and would ease the pressure on the domestic price. The subsidy would be given on export of 40 Lac tonnes of raw sugar over a period of two years and quantum of subsidy would be re–calculated periodically based on the dollar/rupee rate. In the hope of export of sugar the prices of sugar have improved.

While the mills were expecting good rates of subsidy due to rupee/dollar fluctuations for the month of April & May, 2014 the Govt. cut it down to Rs.2277/– per tonne in the month of May,2014 after elections. This has adversely affected the export of sugar. So far 4 Lac tones of sugar has been exported which is just 10% of the target and it is feared that with the consumption of approx.230–235 Lac tones the sugar stock will be much on the higher side at the end of September, 2014. Industry is also pursuing with the Government to raise the import duty of sugar from 15% to 40% to discourage the import of sugar.

Trend in Domestic Sugar Prices The sugar prices which were around Rs.3300/– per qtl. in February/March,2013 came down to Rs.2800/– per qtl. upto mid February,

2014. In the hope of export of sugar the prices of sugar have improved in the month of March and April, 2014 and reached upto Rs.3200/– to Rs.3250/– per qtl. Due to fall in the prices of sugar in the international market the prices of sugar have come down to Rs.3000/– per qtl. The present international sugar price is $475 –480 per tonne. The average sugar realization in the financial year 2013–14 in unit Upper Doab Sugar Mills is Rs.2994.70 per qtl and in Unn Sugar Complex it is Rs.2968.70 per qtl.

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32

Outlook and Challenges before the Industry Sugar Mills in U.P. have incurred heavy losses during the last few years. Even though the Govt. has announced a few measures to

assist the industry, the mills are still not able to recover their cost. On one side cane price arrears of farmers have reached at an all time high while on the other side the sugar mills are defaulted in the payments of their loans leading several mills becoming Non Performing Assets(NPA) or are filing Corporate Debt Re–structuring (CDR). The Centre had come up with a scheme for the industry whereby banks would extend soft loan of Rs.6600 Crores to help in clearing cane price arrears. Out of this only Rs.3000 Crores has been disbursed so far. The banks are reluctant to lend any more because they fear that it would add to their list of Non Performing Assets. The balance cane price outstandings in UP are Rs.8,754/– crores as on 29.05.2014. The Hon’ble High Court at Allahabad have directed the State Government vide its Judgement dated 30th May 2014 of PIL filed by Shri. V.M. Singh that the entire cane price for the season 2013–14 be paid by 30th June 2014. Thereafter, the Cane Commissioner, UP has put pressure on the sugar mills to pay the entire cane price in the month of June, 2014 by issuing Recovery Certificate and lodging FIR against the sugar mills. Now on 1st July 2014 the Hon’ble High Court Allahabad have directed the State Government that the necessary steps shall be taken to ensure the payment of balance amount of sugar cane dues to the farmers by 24th July 2014. The Hon’ble High Court has further directed the impleadment of the Union Government as a party respondent to these proceedings and notice be issued to the Union Government. On 24th July, 2014, the court could not sit and the date of hearing was further extended.

Due to unreasonable cane price in U.P. which has aggravated by low sugar recovery and lack of adequate opportunities to export sugar, the mills in U.P. continued to sink further in deeper financial crisis. An independent report India Rating and Research (IND–RA) published titled as 2014 Outlook Sugar Sector Highlights that “ North south divergence (is) more distinct” It also mentioned that “South based millers should stay afloat (and) north based millers to slide.” The outlook revision reflects the improvement in the credit profiles of millers based in south India from financial year 2014 levels. However, UTTAR PRADESH (U.P.) based mills will likely to continue to struggle with high leverages. The report suggests that better opportunities and prospects that would be available in the next year would benefit only south based sugar mills, while the north based mills including those in U.P. would still remain in red. The main reason for that is extremely high cost of producing sugar in U.P. which at the current cane price and sugar realization is Rs.3600/– per qtl. as compared to sugar producing cost of around Rs.3000/ to 3200/– per qtl in Maharashtra and South India. With rationalized sugar cane pricing policies being implemented by the respective State Governments of Maharashtra and Karnataka, which produces almost 50% of the country’s sugar the U.P. sugar Mills will suffer unless and until the cane pricing system is rationalized. The negative outlook for north and U.P based sugar mills would change if “linkage formula” on cane pricing is implemented. It is essential to implement a revenue sharing model for cane price determination from the next sugar season.

There is of course the overall euphoria that the new regime of BJP led by Sh.Narendra Modi will be friendlier and could help the sugar industry. The BJP led NDA Government has constituted a committee of Ministers to review the problems of sugar industry to ensure the interest of consumers, cane farmers and sugar mills. The committee has recommended further extend soft loan of Rs.4400 crores to the sugar industry to help in clearing the cane price arrears, increase in the import duty on import of sugar from 15 % to 40 % to discourage the import of sugar and further continue subsidy of Rs.3300 per MT on export of raw sugar and increase in the admixing of ethanol in petrol from 5 % to 10 %. Of course these are the welcome steps taken by the Union Government which could help the cash starved the sugar industry

Performance and Outlook for the Company The Company has two sugar units namely Upper Doab Sugar Mills Shamli having capacity of 6250 TCD and Unn Sugar

Complex, Unn having capacity of 5000 TCD. Both the sugar units are in District Shamli, U.P. UNIT – UPPER DOAB SUGAR MILLS, SHAMLI The Crushing Season 2013–14 was started on 11.12.2013 and closed on 21.05.2014. We crushed 8792035 quintals of cane at

an average recovery of 9.02 % producing 7,92,886 quintals of sugar in 162 days of working. In the last Crushing Season 2012–13, Shamli Sugar Unit started crushing on 22.11.2012 and closed crushing on 06.05.2013.

The unit crushed 8653306 quintals of cane at an average recovery of 9.14% producing 790410 quintals of sugar in 166 days of working.

The average cost of Cane for the financial year 2013–14 is Rs.284.22 per quintal as against Rs. 287.78 per quintal for the financial year 2012–13.

The average sugar realization during the financial year 2013–14 is Rs.2994.70 per quintal as against Rs. 3222.99 per quintal during the last financial year 2012–13.

UNIT – UNN SUGAR COMPLEX, UNN The Crushing Season 2013–14 for Unn Sugar Unit was started on 08.12.2013 and closed on 30.04.2014, Unit has crushed 5176350

quintals of cane at an average recovery of 8.47%, producing 438339 Quintals of sugar in 144 days of working. In the last Crushing Season 2012–13, Unn Sugar Unit started crushing on 23.11.2012 and closed crushing on 21.04.2013. The Unit

has crushed 5163073 quintals of cane at an average recovery of 9.00%, producing 464560 quintals of sugar in 148 days of working. The average cost of Cane for the financial year 2013–14 is Rs.288.02 per quintal as against Rs. 293.82 per quintal for the financial

year 2012–13. The average sugar realization during the financial year 2013–14 is Rs.2968.70 per quintal as against Rs. 3087.94 per quintal

during the last financial year 2012–13.



33

UNIT – SHAMLI DISTILLERY & CHEMICAL WORKS, SHAMLI In Shamli Distillery, the production is 7066191 BL during the year 2013–14 as against 7333632 BL during the last financial

year 2012–13. During the year 2013–14, Fermentation % was 89.04 as against 89.05 during 2012–13. Distillation % was 98.05 as against 98.05 during last year. Overall % was 86.95 during 2013–14 as against 89.96 during the year 2012–13. During the year 2013–14, the recovery in AL was 21.80 as against 22.02 during last year. Molasses rate was Rs. 388.03 per quintal during the year 2013–14 as against Rs.323.50 per quintal during the year 2012–13. Shamli Distillery earned profit of Rs. 451.22 Lacs during the year 2013–14 as against Rs. 350.42 Lacs during last year in 2012–13.

(ii) ALCOHOL & ETHANOL BLENDING The Ethanol Blending Programme is primarily based on indigenously produced ethanol from sugarcane molasses, which besides

augmenting fuel availability in the country, would also provide better returns for sugar cane farmers. The Indian Sugar industry has the capacity to produce 250 crore Ltrs of alcohol annually and its major buyers are chemical industry

with demand of 60 crores Ltrs , Potable and Alcohol Industry which sources 110 crore Ltrs and Oil companies need around 100 crore Ltrs.annually. The Government’s ambitious plan to blend petrol with 5% Ethanol has fallen far short of target, creating problems for sugar mills, which supply the alcohol, and the chemical industry, which is complaining that there is a big shortage in the market. Against the requirement of 105 crore litre of ethanol for mandatory 5% blending with petrol, oil companies have contracted just 62 crore litre, half of which is yet to be lifted from depots. Ethanol Blending Programme was launched to promote green fuel and reduce the oil import bill. The sugar industry has estimated that oil companies could have easily saved Rs.370 crore on their oil import bill if they had blended the 62 crore litre supplied by sugar mills in the past year. While oil companies cite ‘procedural delays’ in lifting the Ethanol offered by the supplier sugar mills, the latter is unable to regularize its ethanol production and supply due to non lifting by OMC.

While the supply from the first tender was purchased in the price band of Rs.39–42 per litre, oil firms decided in January, 2014 that they would procure ethanol from only those bidders who match their benchmark price of Rs.44/– per litre. On this basis, they also rejected 36 crore litre of ethanol supply from sugar mills. In the meanwhile, the chemical industry filed three cases in the Competition Commission of India (CCI). Two were quashed while one is with the Supreme Court. In its appeal to the apex court, India Glycols has alleged cartelization by sugar mills and oil companies and also submitted that with limited availability of molasses –based ethanol in the country, any diversion of ethanol shall adversely affect the very existence of the chemical industry in India. The ethanol blending programme has faced hassles from all corners, be it price issue with mills, procedural delays due to inter–state policy mismatch and CCI case filed by the chemical industry.

As there is surplus sugar production, the Government should take steps for increasing the mandatory ethanol blending from 5% to 10% . This would divert surplus sugar to the ethanol production and will reduce inventory level of sugar.

Human Resources initiatives and Industrial Relations The Company has, as always, stood by its commitment of harnessing and developing its people resources in the best possible

manner for achievement of its business goals and objectives. All through the year the level of people engagement has been of the highest order, which has impacted the process of business growth and up–gradation of various systems in a significant way.

Training and Development of employees The process of training and development has continued with a view to upgrading skills and competencies of people. Employees

across all levels including Senior, and Middle Management have been through various developmental programs customized to meet the individual and organizational needs. The organization has continuously worked towards providing an enabling work environment, which encourages people to acquire newer skills and knowledge so as to make them more effective, productive and tuned to the environmental changes.

Internal Control systems and their adequacy The Company is conscious of the importance of internal processes and controls. Your company has designed internal

control systems to handle the requirements of businesses of the company across various locations in regard to all business transactions – sales order to collections, purchase orders to payments, employee payments, expense payments, material and assets accounting etc.

We have an in–house internal audit department who carry out internal audit of all business areas of its units Upper Doab Sugar Mills, Unn Sugar Complex and Shamli Distillery & Chemical Works. The Internal Audit Department assesses the design and implementation of all business processes and systems, in addition to the transaction audit.

The in house Internal Audit Team conducts the Internal Audit work on the basis of an Annual Audit plan, as approved by the Audit Committee of the Board of Directors. The objective of such Audits is to ensure the adequacy of Internal Control Systems and processes, adherence to the company’s policies and guidelines and compliance with the applicable statutory regulations. These Audits also determine whether adequate internal controls are in place to mitigate risks. Observations made by Internal Auditors are reviewed and discussed by the Audit Committee. Internal Audit has a follow up process in place to verify the implementation of the recommendations made. The management gives lot of emphasis on continuous up gradation of business processes systems and adherence to the designed systems and processes.

Contd.....


34

(11) GENERAL SHAREHOLDERS INFORMATION:

a) Annual General Meeting:

Date, Time and Venue of : 22nd September, 2014 at 11.00 A.M.

Next Annual General Meeting : P.H.D. House, Opp. Asian Game Village, New Delhi – 110 016.

b) Financial Calendar (2014–2015):

Financial reporting for the : End of July, 2014 quarter ending 30th June, 2014

Financial reporting for the quarter : End of October, 2014 ending 30th Sept., 2014

Financial reporting for the : End of January, 2015 quarter ending 31st Dec., 2014

Financial reporting for the : 30th May, 2015 quarter ending 31st March, 2014

c) Date of Books closure : 16th September, 2014 to 22nd September, 2014 (Both days inclusive)

d) Dividend payment date : NIL

e) Listing on Stock Exchange : Delhi Stock Exchange Ltd. DSE House, 3/1, Asaf Ali Road, New Delhi–110002. : Bombay Stock Exchange Ltd. 25th Floor, P.J. Tower, Dalal Street, Mumbai – 400001. The Company has paid the listing fee to both the Stock Exchanges for the financial year 2014–15.

f) Stock Code : 19174 of the Delhi Stock Exchange Ltd. : 532879 of Bombay Stock Exchange Ltd.

g) Corporate Identity Number (CIN) : Our Corporate Identity No. is L51909DL1933 PLC009509, allotted by the Ministry of Company Affairs, Government of India and our Company’s Registration No. is 9509.

h) Market Price Data :

The Market Price Data and Volume from 1st April, 2013 to 31st March, 2014 on the Bombay Stock Exchange Limited, Mumbai is given below:

Month High (Rs.) Low (Rs.) No. of Shares Traded

April, 2013 37.00 29.80 6060 May, 2013 38.80 33.75 2407 June, 2013 38.75 35.65 442 July, 2013 36.15 28.30 751 August, 2013 26.90 23.75 144 September, 2013 29.50 23.55 6181 October, 2013 24.50 20.35 3701 November, 2013 24.00 20.00 5173 December, 2013 24.70 22.45 552 January, 2014 24.95 22.40 13324 February, 2014 23.90 19.75 5562 March, 2014 26.20 20.00 14052



35

i) BSE Sensex, Crisil Index etc : Performance of share price of your company in comparison to BSE Sensex during the period 01.04.2013 to 31.03.2014 is given below:

45

40

35

30

25

20

15

10

5

0

23000

22500

22000

21500

21000

20500

20000

19500

19000

18500

Apr

il’13

May

’13

Jun’

13

Jul’1

3

Aug

’13

Sep

’13

Oct

’13

Nov

’13

Dec

’13

Jan’

14

Feb

’14

Mar

’14

j) Registrar & Transfer Agent : M/s Alankit Assignment Ltd., Alankit House, 2E/21, Jhandewalan Extension, New Delhi– 110 055 have been acting as the Registrar and Share Transfer Agent for shares of the company.

k) Share Transfer System : The transfer of shares in physical form is processed by the Secretarial Department of the Company on the basis of data forwarded by the Share Transfer Agent, M/s Alankit Assignment Ltd. within the time prescribed. The Share Transfer Committee/Board of Directors approves transfer of shares in physical form, transmission of shares, transposition of name, consolidation/split of share certificates, remat of shares and issue of duplicate share certificates in lieu of the lost/misplaced share certificates. The Share Transfer Committee of the Board of Directors meet as and when required to consider and approve the share transfer/transmission applications.

In case of shares in Electronic form the transfers are processed through Share Transfer Agent by NSDL/CDSL through respective Depository participants and the details on a regular basis are placed before the Share Transfer Committee of the Board of Directors.

l) Distribution of Shareholding and Shareholding pattern as on 31.03.2014

(i) Distribution of Shareholding:

Category No. of %age Physical NSDL CDSL Total %age Shareholders Demat Demat No. of Shares 1 – 500 3663 86.925 87657 91577 42614 221848 4.226 501 to 1000 228 5.411 61587 73089 24572 159248 3.033 1001 to 2000 123 2.919 58577 83909 30219 172705 3.290 2001 to 3000 62 1.471 51092 64290 40185 155567 2.963 3001 to 4000 29 0.688 25038 46731 31427 103196 1.966 4001 to 5000 16 0.380 17472 41482 13804 72758 1.386 5001 to 10000 43 1.020 113921 108039 59939 281899 5.369 10001 and above 50 1.186 207960 2887415 987404 4082779 77.767 Total 4214 100.000 623304 3396532 1230164 5250000 100.000

Contd.....


36

(ii) Shareholding Pattern:

Physical Form Demat Form Total No. of (%age) No. of (%age) No. of (%age) Shares Shares Shares A. Promoters’ Holding 1. Indian Promoters – – 2898421 55.208 2898421 55.208 2. Foreign Promoters – – – – – – Total (A) – – 2898421 55.208 2898421 55.208 B. Non–Promoters Holding (i) Institutional Investors 1. Mutual Funds and UTI – – – – – – 2. Banks, Financial Institutions, Insurance Companies, (Central/State Government Institutions, Non–Government Institutions) – – 371057 7.068 371057 7.068 3. FIIs – – – – – – Sub–total (B–i) – – 371057 7.068 371057 7.068 (ii) Non–Institutional 1. Private Corporate Bodies 18676 0.356 312394 5.950 331070 6.306 2. Indian Public 602351 11.473 1020911 19.446 1623262 30.919 3. NRIs 2277 0.043 23913 0.456 26190 0.499 Sub total (B–ii) 623304 11.872 1357218 25.852 1980522 37.724 Total (B) 623304 11.872 1728275 32.920 2351579 44.792 Grand Total (A+B) 623304 11.872 4626696 88.128 5250000 100.000

(m) Dematerialization The Shares of the Company can be held in dematerialized mode with National Securities Depository Limited (NSDL) and Central

Depository Services (India) Limited (CDSL). The ISIN No. of the Company is INE 117 H 01019. As on 31.3.2014, 88.128% of the Equity Shares of the company were in dematerialized form and the balance 11.872% shares in physical form.

Status of Dematerialization as on March 31, 2014

Particulars No. of Shares % of Total Capital No. of Accounts National Securities Depository Limited 3396532 64.696 1760 Central Depository Services (India) Limited 1230164 23.432 848 TOTAL DEMATERIALIZED 4626696 88.128 2608 PHYSICAL 623304 11.872 1606 GRAND TOTAL 5250000 100.000 4214

n) Outstanding GDRs/ADRs/ : The Company has not issued any GDRs/ADRs/Warrants warrants or any convertible or any convertible instruments Instruments, Conversion Dates and likely impact on equity

o) Unclaimed Dividend:

Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2013 has mandated every company (including Non–banking Financial Companies and Residuary Non–banking Companies) to file the information of unclaimed and unpaid amounts as referred to in sub–section (2) and (3) of section 205C of the Companies Act, 1956. This information is required to be filed every year within a period of 90 days after the holding of Annual General Meeting or the date on which it should have been held as per the provisions of Section 166 of the Act, and every year thereafter till completion of the seven years’ period. The information is to be filed in Form 5– INV as per the above mentioned rules and thereafter an excel sheet containing detailed investor wise details is to be filed separately.



37

The e–Form, the excel template and detailed steps are provided in the IEPF application link on the portal www.iepf.gov.in (http://www.iepf.gov.in).

Pursuant to Section 205C of the Companies Act, 1956, dividends that are unpaid/unclaimed for a period of 7 years from the date they became due for payment are required to be transferred by the Company to the Investor Education & Protection Fund (IEPF) administered by the Central Government, given below, are the dates of declaration of dividend and corresponding dates when unpaid/unclaimed dividends are due for transfer to IEPF:

Financial Year Date of declaration of Dividend Due date for transfer to IEPF 2009–10 24.09.2010 30.10.2017

p) Equity Shares in the Suspense Account

In terms of Clause 5A(I) of the Listing Agreement, the Company reports the following details in respect of equity shares lying in the suspense account which were issued to the shareholders of the Company:

Number of shareholders Number of equity shares

Aggregate Number of shareholders and the outstanding 141 27524 shares in the suspense account lying as on April 01, 2013

Number of shareholders who approached the Company for 0 0 transfer of shares from suspense account during the year

Number of shareholders to whom shares were transferred 0 0 from the suspense account during the year

Aggregate Number of shareholders and the outstanding shares 141 27524 in the suspense account lying as on March 31, 2014

No share was transferred from the suspense account to the shareholders’ accounts, during the year.

The voting rights on the shares outstanding in the suspense account as on March 31, 2014 shall remain frozen till the rightful owner of such shares claims the shares.

q) Plant Location : i) Upper Doab Sugar Mills, SHAMLI – 247 776 (U.P.)

ii) Unn Sugar Complex, Block Unn, Distt. Shamli (U.P.)

iii) Shamli Distillery & Chemical Works, SHAMLI – 247 776 (U.P.)

r) Address for Correspondence REGISTERED OFFICE SHARE TRANSFER AGENT

4-A, Hansalaya, M/s Alankit Assignments Ltd., 15, Barakhamba Road, ‘Alankit House’ NEW DELHI-110 001 2-E/21, Jhandewalan Extn. NEW DELHI-110 055. Telephones: Telephones: 011-23316409 011-23541234 011-23310414 011-42541234 Fax: 011-23322473 Fax: 011-42540064

Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants.

s) Secretarial Auditor : As a measure of good corporate governance practice, the Board of Directors of the Company appointed Shri S.K. Jain Prop. Sunil K Jain & Associates & Practicing Company Secretaries, to conduct the Secretarial Audit for the the financial year ended March 31, 2014.

Contd.....


38

t) Secretarial Audit for reconciliation of capital : As stipulated by SEBI, a practicing Company Secretary carries out Secretarial Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This Audit is carried out every quarter and the report thereon is submitted to the Stock Exchange where the shares of the Company are listed.

The said Audit Reports confirm that the total issue / paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.

(12) Compliance Officer Mr. P.K. Goyal is the Compliance Officer for complying with the requirement of Listing Agreements with the Stock Exchanges.

(13) Compliance Certificate of the Auditors : The Statutory Auditors have certified that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges and the same is annexed to the Directors’ Report on Corporate Governance.

The certificate from the Statutory Auditors will be sent to the listed Stock Exchanges alongwith Annual Report of the Company.

(14) CEO/CFO Certification : Pursuant to Clause 49 of the Listing Agreement, the CEO/CFO have submitted the desired certificate to the Board of Directors & the same has been taken on record by the Board of Directors in their meeting held on 27th May, 2014.


Place : New Delhi Onke Aggarwal

Dated : 2nd August, 2014 Chairman


39

AUDITORS’ CERTIFICATE ON COMPLIANCE OF THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT

To,

The Shareholders


1. We have examined the compliance of conditions of Corporate Governance by Sir Shadi Lal Enterprises Limited for

the year ended 31st March, 2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock

Exchanges.

2. The compliance of conditions of corporate governance is the responsibility of the management. Our examination was

limited to procedures and implementation thereof, adopted by the Company for ensuring compliance of the conditions

of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the

Company.

3. On the basis of our review and according to the information and explanations given to us, the conditions of Corporate

Governance as stipulated in Clause 49 of the listing agreement with Delhi Stock Exchange Limited and Bombay Stock

Exchange Ltd. have been complied with in all material respect by the Company.

4. We state that no investor grievance is pending for a period exceeding one month against the Company as per the

records maintained by share holders/investor grievance committee.

5. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency

or effectiveness with which the management has conducted the affairs of the Company.

For BASANT RAM & SONS Chartered Accountants (Firm Regn. No. 000569N)

H.K. ChadhaPlace : New Delhi Partner

Dated : 2nd August, 2014 Membership No. 6470


40

INDEPENDENT AUDITORS’ REPORTTo,The Members of Sir Shadi Lal Enterprises Limited Report on the Financial StatementsWe have audited the accompanying financial statements of Sir Shadi Lal Enterprises Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.Management’s Responsibility for the Financial StatementThe Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion and to the best of our information and according to the explanations given to us, subject to Note No. 3.1, in respect of bad and doubtful debts short provided by Rs. 150.38 Lacs the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of matterAttention is invited to note No. 3.6 of Financial Statement regarding potential sickness of the Company. The accumulated losses of the Company as on 31.03.2014 have resulted in 100% erosion of the peak Net Worth during the immediately preceding four financial years. Therefore, the Company has become Sick Industrial Company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 and which will be reported by the Company to the BIFR as required under the provisions of Section 15 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditors’ Report) Order,

2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that: a) we have obtained all the information and explanations

which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement complied with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs) in respect of Section 133 of the Companies Act, 2013; and

e) on the basis of written representations received from the directors as on March 31, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.


H. K. ChadhaPlace : New Delhi PartnerDated : 27th May, 2014 Membership No. 6470


41

i. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets except that cost and to date depreciation written off for certain assets, was available for group of assets.

b) The Company’s programme of physical verification of all its fixed assets once in three years, is in our opinion, reasonable having regard to the size of the Company and the nature of its fixed assets. Pursuant to such programme, a physical verification of fixed assets was carried out during the year and the discrepancies noticed between the book record and physical inventory have been properly accounted for in the books of account.

c) In our opinion, there was no substantial disposal of fixed assets during the year.

ii. a) During the year, the inventories have been physically verified by the management except Material sent for job work and lying with third party. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory, followed by the management are reasonable and adequate in relation to the size of the Company.

c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on physical verification between the physical stocks and the book records were not material, however, the discrepancies noticed have been properly accounted for in the books of account.

iii. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken demand loans/fixed deposits, from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

c) The demand loans/fixed deposits were taken from eight parties listed in the Register maintained under Section 301 of the Companies Act, 1956 and the maximum amount involved in the transactions during the year was Rs.20.30 Crores and the year end balance of such loans/deposits was Rs.17.57 Crores.

d) In our opinion, the rate of interest and other terms

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 of Auditors’ Report of even date to the members of Sir Shadi Lal Enterprises Limited on the accounts for the year ended 31st March, 2014)

and conditions of fixed deposits taken from Directors/ Managing Director and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. No demand loans were taken by the company except from Directors/Managing Director. Therefore, the rate of interest and other terms and conditions of such demand loans are not comparable.

e) The Company is regular in repayment of principal amount of demand loans/fixed deposits and interest thereon.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and information and as per the explanations given to us, we have neither come across nor have been informed of any instance of continuing failure to correct major weaknesses in the aforesaid internal control system.

v. a) In our opinion and according to the information and explanations given to us, the contracts and arrangements that need to be entered into the Register maintained under Section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of ` Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. Last year we had reported that during the financial year 2012-13 Company has accepted/ renewed deposits in excess of limits laid down in rule 3 (2)(I) by Rs. 42.34 lacs and in rule 3(2)(II) by Rs. 190.93 lacs of section 58 A and other relevant provision of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules 1975. However, during the financial year

Contd.....


42

2013-14, Company has refunded out of the said excess amount accepted, Rs. 42.34 lacs and Rs.175.82 under rule 3 (2)(I) and rule 3 (2)(II) respectively.

As per the information and explanations given to us, no order has been passed on the Company by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, relevant to Section 58A, 58AA or the other relevant provisions of the Act.

vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii. We have broadly reviewed the Books of Account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and we are of the opinion, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a) According to the information and explanations given to us except service tax Rs. 601/- no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end for more than six months from the date they became payable.

b) According to the records of the Company and the information and explanations given to us, there are no amounts in respect of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute, other than mentioned in ‘Annexure-1’ to this report.

x. The Company has accumulated losses amounting to Rs.2203.69 Lacs as at the end of the Financial Year 31st March, 2014 after reducing therefrom Deferred Tax Assets of Rs.4985.56 Lacs. The Company has incurred cash losses amounting to Rs.5749.86 Lacs during the financial year ended 31st March, 2014, the Company has also incurred cash losses amounting to Rs.147.99 Lacs during the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us by the Management, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

xii. According to the information and explanations given to us by the Management, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/nidhi/ mutual benefit fund/societies are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from Banks or Financial Institutions. Accordingly, the provisions of clause 4(xv) of the Order, are not applicable to the Company.

xvi. The Company has not raised fresh term loans during the year. The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

xvii. According to the information and explanations given to us and based on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis (excluding Working Capital) have been used for long term investment.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable to the Company.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year and did not have any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issue during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the Company.

xxi. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For BASANT RAM & SONS

Chartered Accountants (Firm Regn. No. 000569N)


Annexures to Auditors’ report Contd.....


43

(Annexure-1 as referred to in para ix. (b) of Annexure ‘A’ to the Auditors’ Report of even date to the members of Sir Shadi Lal Enterprises Limited on the accounts for the year ended 31st March, 2014).

Following are the particulars of disputed dues (provided/considered contingent liability, as appropriate) as on 31.03.2014 on account of Income-Tax, Sales-Tax, and Excise matters that have not been deposited on account of dispute:-

Name of the Nature of the Amount Period to which Forum where dispute is Statute Dues (Rs.in lacs) the Amount pending relates

Sales Tax Act Entry Tax 3.02 2004-2005 Addl. Commissioner Appeal, M.nagar 3.20 2005-2006 Addl. Commissioner Appeal, M.nagar 2.54 2006-2007 Addl. Commissioner Appeal, M.nagar 11.17 2010-2011 Addl. Commissioner Appeal, M.nagar

Central Excise Tax Modvat Credit 0.41 2003-2004 High Court at Allahabad/ Lucknow 2004-2005

Central Excise Act Duty/Penalty 30.35 2008-2009 CESTAT 4.01 2007-2008 CESTAT 10.92 2008-2009 CESTAT 3.94 2008-2009 CESTAT 0.20 2011-2012 Commissioner (Appeal), Meerut.

Central Excise Act Penalty/Reversal 2.09 1999-2000 Commissioner/(Asst. Commissioner) of Modvat Credit/ to Service Tax 2005-2006

U.P. Excise Act Penalty for Low 1.85 1991-1992 Excise Commissioner, Allahabad Recovery Duty/Penalty 55.42 1988-1989 Weight & Measurement Department Saharanpur, High Court, Allahabad

Income Tax Act Pending Demand 11.25 2001-2002 High Court, Delhi 23.59 2005-2006 ITAT, Delhi

We have been informed that apart from above, there are no dues in respect of Wealth-tax, Service-tax , Custom Duty which have not been deposited on account of any dispute.




44

BALANCE SHEET AS AT 31ST MARCH, 2014

Note No. As at March 31, 2014 As at March 31, 2013 Rs. Rs.EQUITY AND LIABILITIES Shareholders’ funds Share capital 2.1 5,25,00,000 5,25,00,000Reserves and surplus 2.2 (27,28,68,773) 15,28,08,139 (22,03,68,773) 20,53,08,139Non-current liabilities Long - term borrowings 2.3 14,22,32,000 20,13,92,000Other long term liabilities 2.4 1,23,03,683 1,56,75,348Long-term provisions 2.5 4,80,27,260 5,33,41,768Total non-current liabilities 20,25,62,943 27,04,09,116Current liabilities Short-term borrowings 2.6 1,42,43,96,365 1,87,54,61,909Trade payables 2.7 1,92,17,95,863 1,17,80,68,501Other current liabilities 2.8 20,63,76,937 19,82,23,218Short-term provisions 2.9 8,54,32,220 9,96,00,446Total current liabilities 3,63,80,01,385 3,35,13,54,074Total 3,62,01,95,555 3,82,70,71,329ASSETS Non-current assets Fixed assets - Tangible assets 2.10 64,90,88,800 71,90,07,754Non - Current Investments 2.11 20 20Deferred tax assets (net) 2.12 49,85,55,769 28,30,67,460Long - term loans and advances 2.13 59,29,150 91,58,042Other non-current assets 2.14 67,85,165 6,63,399Total non-current assets 1,16,03,58,904 1,01,18,96,675Current assets Inventories 2.15 1,99,57,44,832 2,59,23,43,359Trade Receivables 2.16 2,50,55,789 2,12,87,640Cash and cash equivalents 2.17 30,54,22,895 16,78,27,036Short - term loans and advances 2.18 11,64,85,631 1,75,50,969Other current assets 2.19 1,71,27,504 1,61,65,650Total current assets 2,45,98,36,651 2,81,51,74,654Total 3,62,01,95,555 3,82,70,71,329Significant Accounting Policies &Notes on Financial Statements 1 to 4

As per our report of even date P.K. GOYALfor BASANT RAM & SONS Company SecretaryChartered Accountants Cum Chief Financial OfficerFirm Registration No. 000569N

H.K. CHADHA RAHUL LAL VIVEK VISWANATHAN RAJAT LAL Partner Executive Director Joint Managing Director Managing DirectorMembership No. 6470Place : New DelhiDate : 27th May, 2014

Directors :

Onke AggarwalHemantpat SinghaniaR.L. SrivastavaR.C. SharmaRadhika Viswanathan Hoon


45

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

Note No. For the year ended For the year ended March 31, 2014 March 31, 2013 Rs. Rs.

Revenue from operations 2.20 4,67,36,07,747 4,26,59,78,455Other Income 2.21 2,76,11,173 2,77,94,472

Total Revenue 4,70,12,18,920 4,29,37,72,927

Expenses Cost of material consumed 2.22 3,79,46,84,467 3,49,10,44,669Changes in Inventories of Finished goods, Work 2.23 59,68,94,087 7,61,417in progress & Stock in trade Employee benefits expense 2.24 32,62,44,809 32,07,78,631Finance cost 2.25 28,54,79,820 25,80,21,038Depreciation 2.26 7,67,98,251 8,93,67,210Other expenses 2.27 31,52,10,137 28,35,89,997

Total Expenses 5,39,53,11,571 4,44,35,62,962

Loss before exceptional items and tax 69,40,92,651 14,97,90,035Exceptional items 2.28 4,23,08,992 4,56,23,561

Loss before tax 65,17,83,659 10,41,66,474Tax expense: Current tax (Refund of Income Tax) (1,06,18,438) – Deferred tax Assets (21,54,88,309) (1,16,25,298)

Loss for the year 42,56,76,912 9,25,41,176

Number of Shares 52,50,000 52,50,000Earnings per equity share – Basic (81.081) (17.627)– Diluted (81.081) (17.627)Figures in bracket ( ) denote minus figures.

Significant Accounting Policies &Notes on Financial Statements 1 to 4



Directors :



46

NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES 1.1 Basis of accounting and preparation of financial statements The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in

India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended and which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporates Affairs) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Fixed Assets Fixed assets are recorded at acquisition/ construction cost less depreciation thereon. Interest on the term loans related to acquisition

of fixed assets is capitalized upto the period such assets are ready for use. 1.3 Depreciation a) Depreciation is provided on written down value method at the rates prescribed in Schedule XIV of the Companies Act, 1956. b) Depreciation on Fixed Assets on Rented land are amortized over the lease period. c) The exact written down value of some of the articles of meagre value written off under the head “Sales and Adjustments

during the year” being not ascertainable, depreciation charged thereon in the previous years has been adjusted this year on proportionate basis.

1.4 Inventory Valuation a) Raw materials and stores & spares are valued at average cost. b) Stock-in-process is valued at estimated cost. c) Finished stocks are valued at “Lower of Cost and net Realisable Value” as prescribed by Accounting Standard-2 issued by

the Institute of Chartered Accountants of India except that the by product of Molasses has been valued at lower of estimated cost and net realisable value because its cost price is not ascertainable.

1.5 Other Current Assets Current Assets, Loans and Advances are accounted for at their net realizable value. 1.6 Investments Investments are accounted for at cost as reduced by amount written off. 1.7 Sales Sales are recognized when supply of goods takes place and include Excise Duty but exclude Sales Tax. 1.8 Recognition of Income/ Expenditure Income/Expenditure are accounted for on accrual basis. 1.9 Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of

past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.10 Employee Benefits a) Short term employee benefits: All employee benefits falling due wholly with in twelve months of rendering the services are classified as short term employee

benefits, which include benefits like salaries, wages, short term compensated absences and performance incentives and are recognised as expenditure at the undiscounted value in the period in which the employee renders the related service.

b) Post- employment benefits : Contributions to define contribution schemes such as Provident Fund, Pension Fund etc. are recognised as expenses in the

period in which the employee renders the related service in respect of certain employees, Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company.

c) Govt. administered fund, company has no further obligations beyond its monthly contributions. d) The Company is also contributing to superannuation fund for key managerial personnel, at pre determined rates to the

Superannuation Fund Trust, which is recognised as expenses in the period in which employee renders the related service, and there are no other obligations with regard to superannuation fund of key managerial personnel.


47

NOTE 2 : NOTES TO ACCOUNTS 2.1 SHARE CAPITAL As at March 31, 2014 As at March 31, 2013 Rs. Rs.

2.1.1 Authorised

2,00,00,000 (Previous year 2,00,00,000) Equity Shares of Rs.10/- each. 20,00,00,000 20,00,00,000

20,00,00,000 20,00,00,0002.1.2 Issued, subscribed and fully paid up

52,50,000 (Previous year 52,50,000) Equity Shares of Rs. 10/- each, Fully Paid up 5,25,00,000 5,25,00,000

5,25,00,000 5,25,00,000

2.1.3 Reconciliation of the number of shares : Nos. Nos.

Number of shares outstanding at the beginning and end of the year 52,50,000 52,50,000

2.1.4 Shares in the company held by each shareholder holding more than 5%Shares :

As at March 31, 2014 As at March 31, 2013

Name No. of Shares % No. of Shares %

Promoters Holding

i. Sh. Rajat Lal 938232 17.871 928960 17.694

ii. Sh. Vivek Viswanathan 1290816 24.587 1274762 24.281

iii. Smt. Poonam Lal 287745 5.481 287745 5.481

iv. Sh. Rahul Lal 287746 5.481 287746 5.481

Other Share Holders

i. LIC of India 340026 6.477 340026 6.477

As at March 31, 2014 As at March 31, 2013 Rs. Rs.

2.2 RESERVES & SURPLUS

Capital Redemption Reserve

Opening balance 35,70,180 35,70,180

General Reserve

Opening balance 14,92,37,959 24,17,79,135

Surplus/(Loss) as per Statement of Profit & Loss (42,56,76,912) (9,25,41,176)

Net Balance in General Reserve (27,64,38,953) 14,92,37,959

Net Reserves (27,28,68,773) 15,28,08,139 – Figures in bracket ( ) denote minus figures


48

2.3 LONG TERM BORROWINGS SECURED Term Loans Sugar Development Fund 1,99,20,000 2,65,60,000 1,99,20,000 2,65,60,000 UNSECURED Fixed Deposits – Related Parties 12,00,00,000 15,11,32,000 – Others 23,12,000 2,37,00,000 12,23,12,000 17,48,32,000 14,22,32,000 20,13,92,000

2.3.1 Loan from Sugar Development Fund Secured against first pari passu charge on the immovable properties of the Company situated at Shamli.

2.3.2 Repayment Schedule Sugar Fixed deposit Development Fund Repayable in : F.Y. 2014-15 66,40,000 5,17,87,000 F.Y. 2015-16 66,40,000 11,23,12,000 F.Y. 2016-17 66,40,000 1,00,00,000 F.Y. 2017-18 66,40,000 – 2,65,60,000 17,40,99,000

2.3.3 The rate of Interest on Loan from Sugar Development Fund is 4.00 % per annum.2.3.4 The applicable rate of Interest on Fixed deposits is 10.50 % per annum. (Compounded Quarterly) 2.4 OTHER LONG TERM LIABILITIES Interest accrued but not due 63,03,683 91,75,348 Earnest Money and Security Deposits 60,00,000 65,00,000

1,23,03,683 1,56,75,348

2.5 LONG TERM PROVISIONS Provision for Employee Benefits – Gratuity 4,05,55,817 4,53,03,179 – Leave salary 64,45,024 70,12,170 – Expenses 10,26,419 10,26,419

4,80,27,260 5,33,41,768



49


2.6 SHORT TERM BORROWINGS

Loan Repayable on Demand :

From Banks :

– Secured (Cash Credit) 1,36,07,77,574 1,80,18,46,540

From Related Parties :

– Unsecured 1,18,31,791 1,10,17,369

Fixed Deposits : (Refer note no. 2.3.2)

– Unsecured :

– Related Parties 4,26,78,000 2,85,10,000

– Others 91,09,000 3,40,88,000

1,42,43,96,365 1,87,54,61,909

2.6.1 Loan from Banks (Cash Credit) Secured against first pari passu charge by way of Hypothecation of the entire current assets including Finished & Semi-finished stocks, raw materials, stores and receivables of the Company in favour of State Bank of India and Punjab National Bank and by way of Collateral Security on second pari passu charge on fixed assets including extension of Equitable Mortgage of land and building of the Company at Shamli and Unn.

The working capital loan of Rs. 4,994.90 lacs from Zila Sahakari Bank Ltd., Ghaziabad and Bulandshahar is secured by way of pledging of Sugar stock of the book value of Rs. 6,899.90 Lacs. .

2.7 TRADE PAYABLES

Micro, Small and Medium Enterprises – 78,226

Others 1,92,17,95,863 1,17,79,90,275

1,92,17,95,863 1,17,80,68,501

2.7.1 The Details of amounts payable to Micro, Small and Medium Enterprises is based on available information with the Company:

Particulars

Principal amount due and remaining unpaid – –

Interest due on above and the unpaid interest – –

Interest paid – –

Payment made beyond the appointed day during the year – –

Interest due and payable for the period of delay – –

Interest accrued and remaining unpaid – –

Amount of further interest remaining due and payable – –

in succeeding years


50

2.8 OTHER CURRENT LIABILITIES

Current Maturities of Term Loans

From Banks :

(a) State Bank of India (Refer Note No. 2.8.1) – 5,69,42,765

(b) Punjab National Bank (Refer Note No. 2.8.1) – 1,01,21,027

(c) Sugar Development Fund (Refer Note No. 2.3.1) 66,40,000 66,40,000

From Others :

Unclaimed Dividends 4,36,962 8,24,237

Earnest Money and Security Deposits 99,12,445 1,30,98,075

Interest accrued and due on Borrowings 44,70,414 75,87,947

Unpaid Matured Fixed Deposits and Interest – 5,92,174

Advance Received against sale of Unit 10,00,00,000 –

Other Payables 8,49,17,116 10,24,16,993

20,63,76,937 19,82,23,218

2.8.1 Term Loans relating to previous year mentioned at (a) & (b) above Secured against first pari passu charge of State Bank of India with Punjab National Bank on the entire Fixed Assets of Unn Sugar Unit and by way of Collateral Security on second pari passu charge on Fixed Assets at Shamli.

2.9 SHORT TERM PROVISIONS

Provision for Employee Benefits

– Leave salary 39,63,862 20,74,782

Others Provisions

– Taxation 19,72,942 32,51,337

– Expenses 61,43,353 88,44,169

– Excise Duty on Closing stock of Finished Goods 7,33,52,063 8,54,30,158

8,54,32,220 9,96,00,446



51

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46,93

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5,55,1

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Notes

: 2.1

0.1 T

itle d

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of la

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the a

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16 at

Sham

li are

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ecur

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ith IF

CI L

td. Si

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Rs.

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of U

nn Su

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s se

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ans w

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ate B

ank O

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2.10.2

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free

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s bein

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ertain

ed.


52


2.11 NON CURRENT INVESTMENTS

In Equity Shares Fully paid–up (at cost)

a) Shamli Co–operative Cane Development

Union Limited (One Share) 10 10

b) Saharanpur Co–operative Cane Development

Union Limited (One Share) 10 10

20 20

2.11.1 All the above investments are unquoted.

2.12 DEFERRED TAX ASSETS

At the year end comprising timing difference on account of :

Depreciation 4,95,56,131 5,69,28,484

Less: Expenditure/Provisions allowable on account of :

Employees Benefits 57,14,621 57,42,706

Taxes, duties, cess etc 1,66,41,813 2,67,50,343

Assessed loss under Income Tax Act’ 1961. 52,57,55,466 30,75,02,895

Net deferred tax Assets 49,85,55,769 28,30,67,460 2.12.1 In accordance with “Accounting Standard-22” the company has recognized the deferred tax Assets Rs. 21,54,88,309/-

Which has been adjusted in Profit & Loss account.

2.13 LONG TERM LOANS AND ADVANCES

Unsecured, Considered good

Security Lodged 45,54,740 59,24,740

Other Loans and Advances :

Advances recoverable in cash or in kind – 2,000

Loan to a Co-operative Society bearing no interest 50,000 50,000

Excise Duty 13,24,410 31,81,302

Unsecured, Considered doubtful

Advances recoverable in cash or in kind 1,87,192 1,87,192

Less : Provision for doubtful advances 1,87,192 – 1,87,192 –

59,29,150 91,58,042

2.13.1 Confirmation of Securities Lodged with different government departments are awaited.


53

2.14 OTHER NON CURRENT ASSETS Trade Receivable (Unsecured Considered Good) 61,21,766 – Stores & Spares 6,63,399 6,63,399

67,85,165 6,63,399

2.15 INVENTORIES Raw materials at average cost 1,98,45,615 1,52,16,471 Semi - finished stocks at estimated cost 5,89,61,225 5,00,34,893 Finished Stocks at lower of cost and net realizable value 1,84,29,73,996 2,46,08,72,510 Stores and Spares at average cost 7,17,51,086 6,38,71,469 Loose Tools and Implements at average cost 22,12,910 23,48,016

1,99,57,44,832 2,59,23,43,359

2.16 TRADE RECEIVABLE Debts outstanding for a period more than six months Unsecured, Considered good 37,34,500 1,23,60,991 Considered doubtful 14,25,544 14,25,544 Less : Provision for doubtful debts 14,25,544 – 14,25,544 – Other Debts Unsecured Considered Good 2,13,21,289 89,26,649

2,50,55,789 2,12,87,640

2.17 CASH AND CASH EQUIVALENTS Balance with Banks 38,55,61,121 Less : Cheques issued but not presented 9,41,41,512 29,14,19,609 14,17,43,577 Balance in Dividend Account 4,36,962 8,24,237 Molasses Storage Facility Fund 21,39,010 17,09,476 Fixed Deposit Liquid Fund 58,33,602 1,45,04,562 Dharmada Account 4,83,271 5,41,817 Fixed Deposit Lodged as Security / Margin Money – Maturity after one year 16,06,500 16,05,500 – Others 3,54,371 19,60,871 37,40,501 53,46,001 Cash, Drafts and Stamps 31,49,570 31,57,366 30,54,22,895 16,78,27,036

2.17.1 Fixed Deposits lodged as Security includes Rs. 95,562/- pledged with bank against Bank Guarantee (Previous year Rs. 17,08,562/-)

2.17.2 Confirmation of Securities Lodged with different government departments are awaited.



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2.18 SHORT TERM LOANS AND ADVANCES Unsecured, Considered good Security Lodged (Refer note no. 2.13.1) – 2,000 Other Loans and Advances: Advances recoverable in cash or in kind 52,13,282 42,25,717 Excise, Service Tax, Vat and other balances with Government Authorities 11,12,72,349 1,33,23,252

11,64,85,631 1,75,50,969

2.19 OTHER CURRENT ASSETS Interest accrued 20,89,811 11,27,957 Other Receivables : Good – 1,50,37,693 Doubtful 1,50,37,693 –

1,71,27,504 1,61,65,650


2.20 REVENUE FROM OPERATIONS Sale of Products 4,79,86,48,097 4,42,81,81,982 Less: Excise Duty 19,09,52,403 17,72,32,543 4,60,76,95,694 4,25,09,49,439 Other Operating Revenues 6,59,12,053 1,50,29,016 Revenue from Operations 4,67,36,07,747 4,26,59,78,4552.20.1 Sale of Products Sale of Sugar 4,10,76,78,486 3,83,36,50,664 Sale of Molasses 25,07,38,085 24,98,49,569 Sale of Bagasse 16,15,63,807 11,19,74,199 Sale of Press Mud 1,27,63,950 1,28,11,085 Sale of Distillery products 26,11,89,749 21,61,64,383 Sale of Bio – Compost 47,14,020 37,32,082 4,79,86,48,097 4,42,81,81,9822.20.2 Other Operating Revenues Remission of Purchase Tax 2,28,19,916 – Income from Sugar export quota entitlement – 1,50,29,016 Remission of Administrative Charges on Molasses 4,30,92,137 – 6,59,12,053 1,50,29,0162.20.3 Turnover includes inter-unit sales of Rs. 14,92,60,131/- (Previous year Rs. 11,23,99,848/-).

For the year ended For the year ended March 31, 2014 March 31, 2013 Rs. Rs.


55


2.21 OTHER INCOME Interest income 1,51,63,574 14,88,703 Profit on sale of Fixed Assets/Stores 42,543 35,990 Income from agricultural activity (Net) 2,90,370 4,20,681 Refund of Excise Duty/Sales Tax paid in earlier years – 1,96,301 Provision for bad & doubtful debts provided in earlier years written back – 1,46,34,427 Other Non – Operating Income 1,21,14,686 1,10,18,370

2,76,11,173 2,77,94,472

2.21.1 Tax deducted at source on Interest income Rs. 12,74,945/- (Previous year Rs. 1,04,539/-)

2.22 COST OF MATERIALS CONSUMED Raw Materials at Commencement 1,52,16,471 55,14,594 Add : Purchases during the year1 3,79,93,13,611 3,50,07,46,546 3,81,45,30,082 3,50,62,61,140 Less : At Close 1,98,45,615 1,52,16,471 Raw Materials consumed 3,79,46,84,467 3,49,10,44,669

1 Purchases include Rs. 11,41,73,968 /- Inter - unit transfers (Previous Year Rs. 8,94,62,891/-)

2.22.1 Particulars of Materials Consumed Quantity Quantity Qtls. Qtls.

i) Sugarcane (100% indigenous) 1,28,51,579 3,67,09,58,431 1,16,60,925 3,38,28,96,587 ii) Molasses (100% indigenous) 3,06,678 11,90,00,123 3,12,992 10,12,52,986 iii) Cane Juice (100% indigenous) – – 4,625 12,45,194 iv) Press Mud (100 % indigenous) 1,35,000 47,25,913 1,54,839 56,49,902

3,79,46,84,467 3,49,10,44,669

2.23 CHANGES IN INVENTORY OF FINISHED GOODS, STOCk IN PROCESS AND STOCk IN TRADE Stocks at commencement : Finished Goods 2,46,08,72,510 2,49,92,85,215 Semi-finished Goods 5,00,34,893 3,20,13,646 2,51,09,07,403 2,53,12,98,861 Less : Stocks at Close : Finished Goods 1,84,29,73,996 2,46,08,72,510 Semi-finished Goods 5,89,61,225 5,00,34,893 1,90,19,35,221 2,51,09,07,403 Excess of Opening Stocks over Closing Stocks 60,89,72,182 2,03,91,458 Less : Variation in Excise Duty of Opening Stocks (1,20,78,095) (1,96,30,041) over Closing Stocks Net variation in Opening & Closing Stocks of Finished & Semi-Finished Goods 59,68,94,087 7,61,417


56

2.24 EMPLOYEE BENEFITS EXPENSE

Salaries & Wages 26,76,49,805 26,10,84,768

Bonus 95,14,747 45,09,874

Leave Wages paid/provided 1,36,01,474 74,19,574

Contribution to Provident Fund and Family Pension Fund 2,71,81,274 2,61,68,112

Contribution to Approved Superannuation Fund for Managerial Personnel 4,23,000 3,42,000

Provision/Contribution to Approved Gratuity Fund 46,33,412 1,82,83,296

Staff Welfare 32,41,097 29,71,007

32,62,44,809 32,07,78,631

2.24.1 Salary & Wages includes Rs. 49,07,983/- paid to Managerial Personnel (Previous year Rs. 38,45,295/-).

2.24.2 Provident Fund includes Rs. 3,38,400/- for Managerial Personnel (Previous year Rs. 2,73,600/-)

2.24.3 Contribution to Provident fund, Superannuation fund and Family Pension Fund charged off during the year are as under.

PARTICULARS 2013-14 2012-13

Employer contribution to Provident fund 1,35,59,359 1,26,43,339

Employer contribution to Family pension fund 97,18,013 99,40,715

Employer contribution to Superannuation fund 4,23,000 3,42,000

The Company also provides for post employment defined benefit in the form of gratuity and leave liability. The Employee’s Gratuity Scheme is managed by Life Insurance Corporation of India defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method at each Balance Sheet date.

The details provided by Actuary in respect of Gratuity and Leave liability are as under :

PARTICULARS

A kEY ASSUMPTIONS

Mortality Table IAL 2006-08 Ultimate IAL 2006-08 Ultimate

Attrition Rate 05.00 % p.a. 05.00 % p.a.

Imputed Rate of Interest 09.15 % p.a. 08.25 % p.a.

Salary Rise 05.00 % p.a. 05.00 % p.a.

Return on Plan Assets 09.30 % p.a. 09.30 % p.a.

Remaining Working Life 14.75 Years 15.24 Years



57

B GRATUITY LIABILITY

1 CHANGES IN PRESENT VALUE OF OBLIGATIONS

Present value of obligation at the beginning of the year 11,72,48,136 10,64,54,699

Interest Cost 1,02,79,652 82,16,827

Current Service Cost 58,13,559 59,11,795

Benefit Paid (98,04,434) (1,37,13,601)

Actuarial Gain/Loss on obligation (41,23,610) 1,03,78,416

Present value of obligation as on 31st March 11,94,13,303 11,72,48,136

2 CHANGES IN THE PRESENT VALUE OF PLAN ASSETS

Fair value of Plan Assets at the beginning of the I.V.P. 7,19,44,957 7,40,28,583

Expected Return on Plan Assets 67,36,135 64,94,186

Contribution 1,07,77,636 53,16,354

Withdrawal (98,04,434) (1,37,13,601)

Actuarial Gain/Loss on Plan Assets (7,96,808) (4,14,186)

Fair value of plan Asset at 31st March 7,88,57,486 7,17,11,336

3 FAIR VALUE OF PLAN ASSETS

Fair value of Plan Assets at the beginning of the I.V.P. 7,19,44,957 7,40,28,583

Actuarial Return on Plan Assets 59,39,327 60,80,000

Contribution 1,07,77,636 53,16,354

Withdrawal (98,04,434) (1,37,13,601)

Fair Value of Plan Assets at the end of the I.V.P. 7,88,57,486 7,17,11,336

Present value of obligation at the end of the I.V.P. 11,94,13,303 11,72,48,136

Funded Status/Net Liability recognised in Balance Sheet (4,05,55,817) (4,55,36,800)

4 EXPENSES RECOGNISED IN THE STATEMENT

OF PROFIT & LOSS


Interest Cost 1,02,79,652 82,16,827

Expected Return on Plan Assets (67,36,135) (64,94,186)

Actuarial (Gain)/Loss recognised in the I.V.P. (33,26,802) 1,07,92,602

Expenses Recognised in the statement of Profit & Loss 60,30,274 1,84,27,038

NOTE :- To match the figures with Actuarial liability as on 31.03.2014 amount of Rs. 13,96,862/- has been reversed from statement of Profit & Loss (Previous year charged to statement of Profit & loss Rs. 1,43,742/-).



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C LEAVE LIABILITY

1 Present value of obligation at the beginning of the year 70,12,170 1,08,74,829

Interest Cost 79,825 2,40,442


Benefit Paid (1,22,79,540) (1,59,20,773)

Actuarial Gain/Loss for the I.V.P. 72,63,219 64,96,087

Present value of obligation long term as on 31st March, 73,66,053 70,12,170

Present value of obligation short term as on 31st March, 30,42,833 20,74,782

Net Liability recognized in Balance Sheet as on 31st March 1,04,08,886 90,86,952

2 EXPENSES RECOGNISED IN THE STATEMENT

OF PROFIT & LOSS


Interest Cost 79,825 2,40,442

Actuarial (Gain)/Loss recoginsed in the I.V.P. 72,63,219 64,96,087

Expenses Recognised in the statement of Profit & Loss 1,26,33,423 1,20,58,114

Termination Benefits – Voluntary Retirement Scheme

2.25 FINANCE COST

Interest Expenses 28,10,15,834 25,35,94,876

Other Borrowing cost 44,63,986 44,26,162

28,54,79,820 25,80,21,038

2.25.1 Interest Includes Rs. 1,81,52,301/- paid to Managerial Personnel (Previous Year Rs. 1,84,96,652 /-)

2.26 DEPRECIATION AND AMORTIzATION EXPENSES Depreciation on Tangible Assets 7,67,98,251 8,93,67,210

7,67,98,251 8,93,67,210

2.27 OTHER EXPENSES Store consumed 3,72,93,569 3,51,62,594 Power and Fuel 5,99,29,139 5,30,65,081 Packing & Forwarding 6,01,09,247 6,34,69,328 Repairs : Plant and machinery 7,44,66,280 6,38,85,682 Buildings 59,93,341 54,64,777 Others 41,05,138 8,45,64,759 40,54,229 7,34,04,688 Cane & Road Development 62,04,943 47,32,029 Sub Total Carried Over 24,81,01,657 22,98,33,720



59

Sub Total Brought Forward 24,81,01,657 22,98,33,720 Rent 41,44,400 12,42,530 Rates & Taxes 50,56,376 44,44,541 Insurance 26,64,099 25,97,084 Travelling & Vehicles 94,53,599 85,66,629 Legal & Professional 47,70,969 43,74,505 Postage, Telegram and Telephones 13,43,873 12,57,694 Stationery & Printing 21,84,332 16,82,699 Bank Charges 6,70,775 2,65,587 Subscription and Advertisement 20,63,038 19,02,129 General Charges 60,41,827 42,78,976 Directors Fee 6,96,000 6,36,000 Directors Travelling 3,63,971 2,66,494 Charity & Donations 7,100 61,800 Bad Debts & Claims written off 4,222 26,536 Fines & Penalties 99,300 3,46,050 Audit Fee 3,00,000 3,00,000 Loss on Sale & Disposal of : Fixed Assets 28,97,114 1,27,610 Other Assets 6,20,090 11,47,667 Excise Duty & Bottling Fee 7,18,269 7,54,386 Transportation & Selling 94,38,684 86,28,658 Commission on Sales 1,33,55,902 1,07,98,729 Rebate on sales 2,14,540 – Transit loss on sales – 49,973

31,52,10,137 28,35,89,997

2.27.1 General charges is net of previous year expenses over income of Rs. 2,03,443/- (Previous year income over expenses Rs. 7,35,196/-)

2.27.2 Particulars of Spare Parts and components : % of total % of total consumption consumption i) Indigenous 100 1,98,78,616 100 1,70,23,096 ii) Imported NIL NIL NIL NIL

2.27.3 Auditors’ Remuneration : (I) Statutory Auditors a) For Statutory Audit 3,00,000 3,00,000 b) For Tax Audit 75,000 75,000 c) For Certification & other services 1,20,000 1,20,000 4,95,000 4,95,000

e) Service Tax on auditors remuneration 58,710 61,182



60

(II) Cost Auditor a) For cost Audit 45,000 45,000 b) For other services 10,000 25,000 55,000 70,000 c) Service Tax on remuneration 6,798 8,652 d) Out of pocket Expenses(Travelling Expenses) 33,470 32,3002.27.4 Other Information : a) Value or imports calculated on CIF basis during the year NIL NIL b) Expenditure in Foreign Currency NIL NIL c) Amount remitted during the year in Foreign Exchange on account of Dividend NIL NIL d) Earning in Foreign Currency NIL NIL

2.28 EXCEPTIONAL ITEMS Profit on sale of flats at Delhi – 4,56,23,561 Profit on sale of Land at Shamli 4,23,08,992 – 4,23,08,992 4,56,23,561

2.29 CONTINGENT LIABILITIES NOT PROVIDED FOR : As at March 31, 2014 As at March 31, 2013 Rs. Rs.

a) In respect of Statutory Liabilities : i) Subjudice,Income Tax/Penalty determined by Income tax department 34,83,320 38,86,036 ii) Subjudice, Sales tax and Entry Tax including interest thereon 59,94,685 55,73,768 iii) Subjudice, Excise Duty and penalty thereon 65,24,049 67,87,367 iv) Subjudice, In respect of alleged claim of Stamping fee on vats 55,42,460 55,42,460 b) In respect of Other Liabilities : i) Alleged claim of interest on arrears of late payment of cane price 73,08,696 73,08,696 ii) In respect of labour cases in dispute, the amount of which is not ascertainable. iii) Bank Guarantees in favour of Oil Companies and Excise Department of Rs. 1,60,34,000/-.




Directors :



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NOTE 3 : ADDITIONAL INFORMATION 3.1 In absence of balance confirmations from certain creditors, debtors and securities lodged shown in Notes of Trade payable,Other

current liabilities, Long - term loans and advances, Trade Receivables, Short - term loans and advances and Other current assets the Auditors have relied upon the figures appearing in the books of the Company. However, no provision of doubtful debts amounting to Rs. 150.38 Lacs appearing in Note No. 2.18 has been made.

3.2 Income Tax assessments (regular u/s 143(3)) have been completed upto the Accounting year 2010-2011 ( Assessment Year 2011-2012). The Company has gone in appeals against certain such assessment orders. The Company has been legally advised that in view of expected reliefs, the provision for Income Tax liabilities made in Accounts is considered adequate.

3.3 Certain ‘C’ forms in respect of inter-state sales will be collected in due course of time. Liability on account of Sales-Tax may arise on such inter- state sales relating to which ‘C’ forms are not received.

3.4 The Company, during the year on test check basis has reviewed impairment of major Fixed Assets of the Company to identify the impairment loss, if any, based on the test check of the assets, the recoverable value for such Assets is higher than their carrying book value. Accordingly, the review has not revealed any impairment of assets in terms of Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

3.5 The Company has entered into an agreement on 14th January 2014 for sale of its Unit – Unn Sugar Complex located at Block – Unn, District Shamli. However, the execution / formalities of conveyance deed is pending because the purchaser has to Comply with certain Conditions / Formalities for transfer of lease hold rights in his favour.

3.6 The Company over the last few years has been incurring losses due to which its net worth has been completely eroded and its current liabilities are far in excess of its current assets. The accumulated losses of the Company as at 31.03.2014 have resulted in 100% erosion of the peak net worth during the immediately preceding four financial years therefore, the Company has become sick industrial Company under provision of the Sick Industrial Companies (Special Provisions) Act 1985 and this fact will be reported to the BIFR as required under the provisions of section 15 (1) of the Sick Industrial Company (Special Provisions) Act, 1985.

The Indian sugar industry, particularly in the State of Uttar Pradesh, has faced difficulties on account of increasing sugar cane prices and corresponding lower than expected recovery of sugar from cane, lower sugar prices and consequential under recovery of cost of production. These factors have adversely affected the Company’s operations and financial performance. Higher finance costs have also added to the cash losses.

During the previous year, based on the Company’s audited financial statements for the year ended March 31, 2012, the Company had filed Form ‘C’ with the Board for Industrial and Financial Reconstruction (BIFR), Government of India, about the “Potential Sickness” of the Company in line with the provisions of Section 23 of the Sick Industrial Companies (Special Provisions), Act, 1985 (SICA).

3.7 During the financial year 2012-13 Company has accepted/ renewed deposits in excess of Rs. 42.34 lacs under rule 3 (2)(I) and Rs. 190.93 lacs under rule 3(2)(II) of the provisions of section 58 A and other relevant provisions of the Companies Act, 1956, and Companies (Acceptance of Deposits) Rules 1975. During the financial year 2013-14 the Company has refunded Rs. 42.34 lacs under rule 3 (2)(I) and Rs.175.82 under rule 3 (2)(II) upto 31.03.2014. The balance refund are being made during the current year.

3.8 Certain previous year figures have been rearranged to make them comparable with current year figures. Figures have been rounded off nearest to rupee.

3.9 Particulars of Stocks, Purchases and Sales of Products :

Particulars OPening stOcks Purchases turnOver clOsing stOcks

Quantity value Quantity value Quantity value Quantity value Qtls. rs. Qtls. rs. Qtls. rs. Qtls. rs

FOR THE YEAR ENDED MARCH 31, 2014Finished GoodsSugar 6,91,465 2,35,78,72,321 – – 13,32,892 4,10,76,78,486 5,05,806 1,66,93,77,583Molasses 2,27,498 8,03,59,149 – – 5,74,224 25,07,38,085 2,94,976 15,08,57,240Distillery Products - 1,92,29,017 – – – 26,11,89,749 – 1,86,56,769Other Sales - 34,12,023 – – – 17,90,41,777 – 40,82,404FOR THE YEAR ENDED MARCH 31, 2013Finished GoodsSugar 8,28,724 2,39,19,18,146 – – 11,70,789 3,83,36,50,664 6,91,465 2,35,78,72,321Molasses 3,40,163 9,80,83,655 – – 6,92,998 24,98,49,569 2,27,498 8,03,59,149Distillery Products - 82,70,003 – – – 21,61,64,383 – 1,92,29,017Other Sales - 10,13,411 – – – 12,85,17,366 – 34,12,023

NOTES : 3.9.1 Quantitative figures of Distillery products are not ascertainable, because the basic product of spirits is converted later into various strengths with

water dilution.3.9.2 Closing stock of Molasses arrived at after adjustment of wastage of 3,484 Qtls. (Previous year 4,039 Qtls.)3.9.3 Turnover includes inter-unit sales of Rs. 14,92,60,131/- (Previous year Rs. 11,23,99,848/-).3.9.4 Other Sales include Sale of Bagasse, Press Mud and Bio Compost.3.9.5 Sale of Sugar includes 2,453 bags of BISS


62

3.10 Related parties’ Disclosures :I Relationship A Key Management personnel Designation i. Sh. Rajat Lal Managing Director ii. Sh. Vivek Viswanathan Joint Managing Director iii. Sh. Rahul Lal Executive Director B Relatives of Key Management Personnel Relation with Key Management Personnel 1. Smt. Sudha Singhania Sister of Shri Rajat Lal 2. Smt. Poonam Lal Wife of Shri Rajat Lal 3. Sh. Rahul Lal Son of Shri Rajat Lal 4. Ms. Pooja Lal Daughter of Shri Rajat Lal 5. Smt. Radhika Viswanathan Hoon Sister of Shri Vivek Viswanathan

II Transations of Expense/Income carried out during the year : Remuneration Directors’ Fee Rent Paid Interest on Total Deposits/Loans Rs. Rs. Rs. Rs. Rs.

A Key Management 56,69,383 – 23,99,600 1,81,52,301 2,62,21,284 Personnel (44,60,895) (–) (–) (1,84,96,652) (2,29,57,547) B Relatives of Key Management – 60,000 – 7,47,989 8,07,989 Personnel (–) (60,000) (–) (15,71,070) (16,31,070) TOTAL A+B 56,69,383 60,000 23,99,600 1,89,00,290 2,70,29,273 (44,60,895) (60,000) (–) (2,00,67,722) (2,45,88,617)

III Transactions of Loans and Deposits during the year Opening Balance Closing Balance As on 01.04.2013 Received Repaid As on 31.03.2014 Rs. Rs. Rs. Rs.1 Loans – Key Management Personnel 97,41,250 3,77,04,840 3,69,82,383 1,04,63,707 (1,45,69,064) (3,01,16,067) (3,49,43,881) (97,41,250) – Relatives of Key Management Personnel 12,76,119 1,24,407 32,442 13,68,084 (11,72,602) (1,15,020) (11,503) (12,76,119)2 Deposits – Key Management Personnel 16,70,00,000 2,14,54,000 2,94,60,000 15,89,94,000 (16,82,50,000) (11,70,00,000) (11,82,50,000) (16,70,00,000) – Relatives of Key Management Personnel 1,26,42,000 – 89,58,000 36,84,000 (1,69,86,000) (34,54,000) (77,98,000) (1,26,42,000)

IV Transations Related to sale of Flats : Sale Value of Flats Amount Rs. Key Management personnel : Sale in property rights of Flats (-) (5,04,84,250)Note : Figures in ( ) denote Previous Year figures.


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3.11 Segment Reporting : The Company’s operation predominantly relates to manufacture and sale of Sugar and Alcohol products. Accordingly

the Sugar and Alcohol products primarily comprises the basis for primary and secondary for segment information :SEGMENT INFORMATION-BUSINESS SEGMENT : Sugar Alcohol Total Amount Rs. Amount Rs. Amount Rs.Particulars–Segment Revenue including Excise DutyExternal Revenue 4,42,56,34,305 26,59,03,769 4,69,15,38,074 (4,08,71,48,800) (21,98,96,465) (4,30,70,45,265)Inter–segment 17,30,22,076 – 17,30,22,076 (13,61,65,733) (–) (13,61,65,733)Total 4,59,86,56,381 26,59,03,769 4,86,45,60,150 (4,22,33,14,533) (21,98,96,465) (4,44,32,10,998)–Segment Result before interest & tax and exceptional item – Profit/Loss(–) (–)43,43,30,387 4,62,77,764 (–)38,80,52,623 (10,40,38,438) (3,67,03,010) (14,07,41,448)Less : Unallocated expenses (Net of Unallocable Income) 2,05,60,208 (3,25,10,445)Less : Finance Charge 28,54,79,820 (25,80,21,038)Profit/(Loss) (–) before tax & exceptional item (–)69,40,92,651 (–)(14,97,90,035)Add : Exceptional Item 4,23,08,992 (4,56,23,561)Profit/(Loss) (–) before tax (–)65,17,83,659 (–)(10,41,66,474)– Segment Assets 2,72,55,11,403 20,74,28,326 2,93,29,39,729 (3,28,16,97,152) (9,88,89,492) (3,38,05,86,644)Unallocated Assets 68,72,55,826 (44,64,84,685)Total Assets 3,62,01,95,555 (3,82,70,71,329)– Segment Liabilities 3,52,45,15,243 1,25,61,444 3,53,70,76,687 (3,32,61,45,542) (1,83,76,345) (3,34,45,21,887)Unallocated Liabilities 30,34,87,641 (27,72,41,303)Total Liabilities 3,84,05,64,328 (3,62,17,63,190)Segment capital expenditure 77,43,204 76,500 78,19,704 (83,60,819) (43,96,144) (1,27,56,963)Unallocated capital Expenditure 25,52,324 (1,68,310)Total capital expenditure 1,03,72,028 (1,29,25,273)–Segment Depreciation 6,89,95,747 73,70,411 7,63,66,158 (8,03,14,279) (83,07,845) (8,86,22,124)Unallocated Depreciation 4,32,093 (7,45,086)Total Depreciation 7,67,98,251 (8,93,67,210)3.11.1 Unallocated Assets include Deferred Tax Assets.3.11.2 Segment Liabilities represent total of current & non current liabilities.3.11.3 Figures in ( ) denote Previous year figures.

Signature to Notes forming part of financial statements.



Directors :



64

NOTE NO. 4: CASH FLOW STATEMENT

For the Year ended For the Year ended 31st March, 2014 31st March, 2013 (Rs. in lacs) (Rs. in lacs)A. CASH FLOW FROM OPERATING ACTIVITIES : Net Profit/(Loss) before tax and exceptional item as per Profit & Loss Account (6,940.93) (1,497.90) Adjustments for : Depreciation 767.98 893.67 Interest (Net) 2,658.52 2,521.06 Bad debts & claims written off (Net) 0.04 (146.07) (Profit)/Loss on sale & Disposal of Fixed Assets (Net) 28.54 1.12 Prior period adjustment (Net) (2.03) (7.35) Unclaimed Credit Balances Written Back (3.46) (0.67) Stores Written off 6.20 11.28 Operating Profit before working capital changes (3,485.14) 1,775.14 Adjustment for : Trade and other receivables (1,056.01) 376.38 Inventories 5,959.79 116.00 Trade Payables 2,636.15 2,913.93 Cash generated from operations 4,054.79 5,181.45 Prior period adjustment (Net) 2.03 7.35 Interest paid (2,551.65) (2,068.62) Direct tax paid (Net) 93.40 (1.05) Net Cash from operating activities 1,598.57 3,119.13 B. CASH FROM INVESTING ACTIVITIES : Purchase of fixed assets (net of advance) (103.72) (129.25) Advance received against sale of Unit 1,000.00 – Capital Advance – 8.04 Sale of fixed assets 6.39 55.40 Exceptional item (Refer Note No. 2.28) 423.09 456.24 Interest received 142.03 13.53 Net Cash used in investing activities 1,467.79 403.96 C. CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Fixed Deposit/Directors Loan (631.09) (744.07) Proceeds from Term Loan/Repayment of Finance Liability (737.04) (924.88) Dividend paid (3.87) (2.87) Interest paid (318.40) (658.87) Net Cash used in Financing Activities (1,690.40) (2,330.69) Net increase in Cash and Cash equivalents 1,375.96 1,192.40 Opening balance of Cash and Cash equivalents 1,678.27 485.87 Closing balance of Cash and Cash equivalents 3,054.23 1,678.27

Note : Figures in bracket ( ) denote Cash Outgo



Directors :


Documents

SIR SHADI LAL ENTERPRISES LIMITED · SIR SHADI LAL ENTERPRISES LIMITED 1 SIR SHADI LAL ENTERPRISES LIMITED BOARD OF DIRECTORS : Shri Onke Aggarwal-Chairman Shri Rajat Lal-Managing