AFFLUENCE

DIRECTORS’ REPORT

To the members of

Simbhaoli Spirits Limited

Your directors have pleasure in placing the 4th directors' report together with management discussion and analysis for the financial year ended on March 31, 2015.

Business Overview

The Company is engaged in the potable alcohol business and has an installed capacity of 90 kilo liters per day (KLD) along-side dedicated lines for Country Liquor, IMFL and Exports and intended to develop new marketing areas, creation of new brands, carrying out business promotional activities, capacity enhancement and raising necessary resources. The business had created a presence in the Indian markets through CSD, Civil – U.P, Delhi, Haryana, HP, West Bengal & Orissa, and Overseas in the U.A.E. & African Countries. Further, the Company has a plan to re-jig its business and re-focusing on the production of country liquor, exports and supplies to armed forces.

However, during February 2014, the Company’s operations were suspended as the Pollution Control Authorities have withdrawn their consent for operations for the year 2014 and has issued a notice for suspension of operation(s) of the Distillery plant situated at Simbhaoli on account of non-fulfillment of certain conditions on the pollution and effluent discharge. Further, in a complaint against the Company, Hon’ble National Green Tribunal (NGT), Principal Bench, New Delhi in its order had issued directions for mandatory compliance before re-start of the distillery operations. NGT has also imposed monetary penalty of Rs. 5.0 crore on the Company. In an appeal, the Hon'ble Supreme Court has passed an order directing that it has seen no infirmity in order passed by the NGT and there is no reason for the Court to interfere in the same.

Following the above, the Company has paid the penalty as per the directions of Hon’ble Court and has applied for the necessary consents from the Uttar Pradesh Pollution Control Board (UPPCB) and Central Pollution Control Board (CPCB) and taken steps to re-start the plant. The other requirements are also being completed, and a joint inspection has been carried out by the UPCB and CPCB as per the directions of the NGT and your directors are confident that, the Company is expected to resume operations on receipt of necessary consent from the UPPCB and other regulatory authorities.

Scheme of Amalgamation

A Scheme of Amalgamation (the Scheme) of Simbhaoli Sugars Limited (SSL), the holding Company with Simbhaoli Spirits Limited (SISPL), as approved by the Board of both the companies, was filed with the Hon’ble High Court of Judicature at Allahabad (the Court). With effect from the Appointed Date the entire business and undertaking of the Company, shall be and stand transferred to and vested in or be deemed to have been transferred to and vested in SISPL, as a going concern without any further act and deed.

As per the Scheme, the name of the Amalgamated Company shall be changed to “Simbhaoli Sugars Limited”and it is also proposed to issue equity shares of the Amalgamated Company to the existing preference shareholders of Amalgamating Company in the same proportion corresponding to their existing shareholding based on the valuation report of the firm of an Independent Chartered Accountants.

The shareholders and unsecured creditors of SSL have approved the Scheme on September 20, 2014. The meetings of the secured creditors of both the companies have been convened by Hon’ble Court on July 11, 2015.

Outstanding dues of the financial institutions

The Company has been facing difficulties in making repayment of principal amounts due on bank loans and interest thereon, due to extreme liquidity crunch. Meanwhile, the Company is taking all possible steps to restructure the bank’s dues and realign its obligations with the revenues. A Restructuring Scheme has been proposed, which provides to dispose off some of the non-current assets and commitments from the promoters. The lenders under the leadership of the State Bank of India (SBI) have appointed PNB Investment Services Ltd, as Investment Advisors, who based on the Techno Economic Viability (TEV) study affirmed that the businesses of the Company are viable, and it is capable to pay its debts post restructuring exercise.

Financial Statements

The results of operations of the Company for the financial year ended March 31, 2015 as compared with the year ended March 31, 2014 are stated as under:

              (Amount in Rs. Lacs)

During this year, the Company’s operations are adversely affected on account of the closure of distillery plant and the Company was not able to meet out the fixed cost. Simbhaoli Sugars Limited, the holding Company has been providing necessary support to the Company during this financial crunch.

Dividend

In view of continued losses in the Company, your directors express their inability to declare dividend for the year.

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

Share capital

The Company has also not issued any securities or sweat equity/Bonus Shares/esops and have not bought back any of its securities during the year under review.

Holding, Subsidiaries, Joint Ventures and Associate Companies

The Company is a wholly owned subsidiary of Simbhaoli Sugars Limited (SSL). The Company has no subsidiary/joint venture or associate company.

Auditors' Report

The comments on the statement of account referred to in the report of the auditors are self-explanatory, and explained in the appropriate notes to accounts.

Secretarial Audit

M/s Amit Gupta & Associates, Company Secretaries, have been engaged as the Secretarial Auditors of the Company under the provisions of the Companies Act, 2013. The Secretarial Audit Report is given as Annexure-1 to this report.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE IN SECRETARIAL AUDIT REPORT

The Comments/Remarks in the Secretarial Audit Report are self-explanatory and explained at the appropriate section of the Annual Report.

Cost Auditors

M/s Satnam Singh Saggu, Cost Accountants, have been engaged as the Cost Auditors of the Company under the provisions of the Companies Act, 2013 for the financial year 2014-15.

Directors

At the forthcoming Annual General Meeting of the Company, Mr. Gurmit Singh Mann, who retires by rotation and being eligible, offer himself for re-appointment as director on the Board of the Company.

During the year, Mr. S K Sinha, a Director on the Board of the Company, resigned from the directorship of the Company. The Company has appointed Mr. R. K. Singh as an additional director on the Board of the Company on October 20, 2014. Mr. Singh is the Chief General Manager of the Company handling the distillery operations. A notice has been received proposing him as a whole time director at the ensuing general meeting of the Company.

Internal Control

The Company has adequate systems of internal control to safeguard its assets against loss from any unwarranted use. All transactions are authorized, recorded and reported correctly. The Company has also adopted system based approach to ensure the compliance and implementation of the principles and standard of corporate governance in recording the day to day operations of the Company.

Human resources

The Company has witnessed a sharp fall due to discontinuance of operations for more than 15 months. Even-though the existing workforce is committed and motivated and the relation between the management and employees continued to remain cordial.

The Company has always been vigil against the sexual harassment and a system is in place under which, the employees can write their complaint in this regards. No such complaint has been received during the year.

Audit Committee and Vigil mechanism

The Audit Committee comprise of Mr. S C Kumar, Mr. Gurpal Singh and Ms. Gursimran Kaur Mann. Mr. S C Kumar acts as the Chairman and Mr. Vibhu Mishra acts as the Secretary to the Committee.

The Company has established a vigil mechanism to oversee through the Audit Committee, the genuine concerns expressed by the employees and directors. The Company has provided adequate safeguards against victimization of employees and directors, who can express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of Company and its employees.

Nomination and remuneration Committee

The Nomination and Remuneration Committee was constituted in April 2015 comprising of Mr. S C Kumar, Mr. Gurmit Singh Mann and Ms. Gursimran Kaur Mann. Mr. S C Kumar acts as the Chairman and Mr. Vibhu Mishra acts as the Secretary to the Committee.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 2 and is attached to this report.

Risk assessment and mitigation policy

Simbhaoli Sugars Limited, the holding Company has adopted certain measures concerning the development and implementation of a Risk Management Policy, which is applicable on the Company. The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting.

Corporate Governance viz Remuneration policy as applicable to executive/non-executive directors

The remuneration policy as adopted by Simbhaoli Sugars Limited the holding Company is applicable to executive/non-executive directors of the Company as following:

a.    The executive directors are paid remuneration as per their respective terms of employment in accordance with the provisions of the Companies Act, 1956 and thereafter applicability of the provisions under schedule V to the Companies Act, 2013. No sitting fee is payable to executive directors. Details of remuneration paid to them for the year are as follows:

(Rs. in lacs)

* Mr. S K Sinha resigned with effect from Oct 20, 2014.       #including provident fund and other retirement benefits

b.    Sitting fee of Rs. 15,000 per meeting is being paid to non-executive directors for attending meetings of the Board and Committees thereof. The details of sitting fee paid for the year and equity shares and other convertible instruments held by them are as follows:

^Convertible instrument - Nil

During the year, no equity shares and/or convertible securities were issued to the executive/non-executive directors.

Disclosure of payment of remuneration to whole time directors under Part II of section II (B) of Schedule V to the Companies Act, 2013

Mr. Gurpal Singh, Managing Director of Simbhaoli Sugars Limited, the holding Company is also a whole-time director in the Company. Mr. R K Singh is the whole-time director and Key Managerial personnel of the Company. None of the directors hold any beneficial interest in the Company.

During the year, the aggregate remuneration paid to these directors is within the limits of Schedule V to the Companies Act, 2013.

The appointment of the aforesaid directors is liable to be terminated on a notice of three/two months or payment of salary in lieu thereof. The remuneration comprises of fixed components and there is no performance linked incentives criterion. No severance fee is payable to them. During the year, no stock option has been granted by the Company to the aforesaid directors.

Corporate Social Responsibility Initiatives

Simbhaoli Sugars Limited, the Holding Company has a corporate social responsibility (CSR) policy indicating the guidelines for social welfare activities to be undertaken. It is implementing programs in the fields of education, healthcare, clean water, social welfare, village infrastructure development in reserved areas of its sugar mills. The Company, in line with SSL on its own, is meeting its social responsibility obligations by encouraging cleaner surroundings, improving village level infrastructure, unclogged drains and providing the good hygiene and sanitation.

Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013

The Company has not granted any loans, guarantees or investments under Section 186 of the Companies Act, 2013 and rules made there under.

Particulars of Contracts or Arrangements made with Related Parties

The Company has no substantial related party transaction. The particulars of contracts or arrangements with related parties made pursuant to Section 188 of the Companies Act, 2013 and rules made there under is furnished in Note 12(b) in the notes to accounts forming part of the Annual report.

Company’s Policy Relating to Directors Appointment, Payment of Remuneration and Discharge of their Duties

The Policy framed by Simbhaoli Sugars Limited, the holding company, relating to appointment of Directors, payment of Managerial remuneration, Directors’ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 has been disseminated at the Company’s website at link-http://www.simbhaolisugars.com/ company_policies.asp. Being a wholly owned subsidiary and in view of the Scheme of amalgamation, as detailed elsewhere in this report, the same policy is also applicable to the Company.

Annual Return

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure 3 and is attached to this Report.

Number of Board Meetings Conducted

During the year, the five meetings of the Board of Directors of the Company were held, on May 2, 2014, August 13, 2014, October 20, 2014, November 14, 2014 and February 13, 2015. The details are as follows:

Number Of Meetings Attended By Each Director

The attendance of each director at these meetings and at the last annual general meeting was as follows:

*Mr. S K Sinha, ceased to be a director w.e.f. 20/10/2014.     # Mr. R K Singh appointed as director w.e.f 20/10/2014

Board Evaluation

Simbhaoli Sugars Limited, the holding Company has devised the principles for review of the performance of the non-independent whole-time directors, based on the various criterion as approved by the independent directors of the holding Company in their meeting held in pursuance to the provisions of the Para VII (1) of schedule IV to the Companies Act, 2013 and Rules made there under.

The Company is also in process to adopt the best industry practices for the evaluation of the performance of non-independent directors and the Board as a whole and the Committees thereof.

The Company has been operating through the Key Managerial Personnel as nominated under the Provisions of the Companies Act, 2013, as applicable to the Company. However, in view of the Scheme of Amalgamation, as detailed elsewhere in this report, the new Key Managerial Personnel shall be nominated after sanction of the Scheme, by the Hon’ble High Court of Judicature at Allahabad.

Deposits

The Company has not accepted any deposits during the year. No deposits are remain unpaid of the previous financial years.

Research and Development

Since there were combined research and development activities along with holding company, no separate expenditure was incurred on such activities during the year.

Particulars of Employees

There was no employee of the Company, who has been paid remuneration under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Auditors

The Auditors, M/s Deloitte Haskins & Sells, Chartered Accountants, New Delhi, (the statutory auditors), have been appointed for the three financial years, 2014-15, 2015-16 and 2016-17 subject to the ratification at each annual general meeting of the members of the Company. The Companies Act, 2013 has also prescribed the provisions for the rotation of the statutory auditors. Your directors are in discussions with them and appropriate steps in this regard shall be taken in compliance with the prescribed guidelines.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, read with the Rules made there under, with respect to the Directors' responsibility statement, it is hereby confirmed that:

(a)   in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b)   the directors had 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 at the end of the financial year and of the profit and loss of the Company for that period;

(c)    the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d)   the directors had prepared the annual accounts on a going concern basis;

(e)    the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f)     the directors had devised proper systems to ensure compliance with the provisions of all the applicable laws and that such systems were adequate and operating effectively.

Cautionary Statement

Certain statements in this report may be forward looking and represent intention of the management. Actual results may differ materially due to a number of risks or uncertainties associated with the business. Investors/stakeholders, therefore, are advised to make their own judgments before taking any investment, business decisions.

ANNUAL EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

The Simbhaoli Sugars Limited, holding company has devised the principles for review of the performance of the non-independent whole-time directors, based on the various criterion as approved by the independent directors of the Company in their meeting held in pursuance to the provisions of the Para VII (1) of schedule IV to the Companies Act, 2013 and Rules made there under.

The Company is also in process to adopt the best industry practices for the evaluation of the performance of non-independent directors and the Board as a whole and the Committees thereof.

Key Managerial Personnel: The Company has the following persons as the key managerial personnel:

1.      Mr. Rakesh Kumar Singh, Chief General Manager

Acknowledgement

The Directors wish to emphatically state their gratitude to the Government of India, State Government of Uttar Pradesh, lenders banks, suppliers and all other concerned persons, who have continued their valuable support to your Company.

The directors also submit special thanks to Simbhaoli Sugars Limited and its staff for continued support.

The Directors acknowledge with gratitude the cooperation and assistance received from all executives, staff and workmen of the Company.

For and on behalf of the Board of Directors                                               of Simbhaoli Spirits Limited

May 30, 2015                                                                                                 Gurmit Singh Mann

Noida                                                                                                                   Chairman

Annexure-1

FORM NO. MR.3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2015

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies

(Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

SIMBHAOLI SPIRITS LIMITED,

(CIN - U15122UP2011PLC044210)

Kothi No. 1, Distillery Compound,

Hapur Road, Simbhaoli, Uttar Pradesh

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s SIMBHAOLI SPIRITS LIMITED (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit,

We hereby report that in our opinionThe Company has, during the audit period covering the financial year ended on 31st March, 2015 complied with the statutory provisions listed hereunder and also That the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of:

        i.   The Companies Act, 2013 (the Act) and the rules made there under;

      ii.   The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under - Not applicable as the securities issued by Company were not listed during the period under review;

    iii.   The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

    iv.   Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings - Not applicable as the Company has not made any such transaction during the financial year under review;

      v.   The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

a.       The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b.       The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 - Not applicable as the securities issued by Company were not listed during the period under review;

c.       The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009- Not applicable as the Company has not made any public offer of securities during the period under review;

d.      The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999/Securities And Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (effective 28th October 2014) - Not applicable as the Company has not granted any options during the financial year under review

e.       The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable as the securities issued by Company were not listed during the period under review;

f.The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review;

g.      The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 – Not applicable as the Company has not delisted/propose to delist its equity shares from any stock exchange during the financial year under review;

h.      The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the Company has not bought back/propose to buyback any of its securities during the financial year under review.

    vi.   The following other laws as may be applicable specifically to the Company:

a)      UP State Excise Act, 1910

b)      Central Excise Tariff Act, 1985

c)      The Boilers Act, 1923

d)      The Legal Metrology Act, 2009

e)       The Environment Protection Act, 1986

f)        The Water (Prevention and Control Pollution) Act, 1974

g)      The Air (Prevention and Control Pollution) Act, 1981

We have also examined compliance with the applicable clauses of the following:

(i)  Secretarial Standards issued by The Institute of Company Secretaries of India -Not applicable as the standards were not notified during the period under review; and

(ii)Listing Agreements entered into by the Company with Stock Exchanges - Not applicable as the securities issued by Company were not listed during the period under review;

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

(i)     Whereas in terms of the provisions of Section 149(6) read with section 178 of the Act, the Company’s Board is required to maintain Independent Directors on its Board, which has not been maintained.

(ii)  Whereas in terms of the provisions of the Para VII (1) of schedule IV to the Act, and Rules made there under, the Independent Directors were required to undertake an evaluation of the performance of non-independent directors, which has not been undertaken. However, as explained by the management, Simbhaoli Sugars Limited, the holding Company has devised the principles for review of the performance of the non-independent whole-time directors, based on the various criterion as approved by the independent directors of the holding Company in their meeting held in pursuance to the provisions of the Para VII (1) of schedule IV to the Companies Act, 2013 and Rules made there under. The management of the Company has informed that the Company is in process to adopt the best industry practices for the evaluation of the performance of non-independent directors and the Board as a whole and the Committees thereof and aforesaid evaluations shall be concluded soon.

(iii)                        The Company has not filed/filed with delay, certain forms/returns/documents etc. with the Registrar of Companies, Ministry of Corporate Affairs, Kanpur under the provisions of the Companies Act, 2013.

(iv)The Hon’ble National Green Tribunal (NGT), Principal Bench, New Delhi has passed an order directing the Company to pay monetary penalty in a matter alleging non-fulfilment of certain conditions on pollution and effluent discharge against the Company. The NGT in its order had also issued directions for mandatory compliance before re-start of the distillery operations. However, as explained by the Company the matter relates to the year 2013-14 on account of withdrawal of consent by the pollution control authorities due to non-fulfillment of certain conditions of their consent and necessary steps have been initiated by the Company to comply with the said order.

(v)   A Scheme of Amalgamation (the Scheme) of Simbhaoli Sugars Limited, the holding company with Simbhaoli Spirits Limited (SISPL) was filed the same with the Hon’ble High Court of Judicature at Allahabad (the Court). The shareholders and unsecured creditors of the Transferor Company have approved the Scheme and the meetings of the secured creditors of both the companies have been convened as per the directions of Hon’ble Court on July 11, 2015. Based on record and as explained to us, pending sanction of the Scheme by the Court, no financial effect has been considered in financial statements for the year ended at 31st March, 2015.

We further report that:

Ø  The Board of Directors of the Company is duly constituted with proper balance of Executive & Non-Executive Directors. The Company is required to induct two Independent Directors on its Board, out of which only one independent Director has been inducted. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Ø  Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were generally sent at least seven days in advance.  However, we have noted delay in sending agenda papers in few cases, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting for meaningful participation at the meeting.

Ø  Majority decision is carried through, while the dissenting members’ views, if any, are captured and recorded as part of the minutes.

We further report that the systems and processes in the Company require further strengthening and improvements, considering the size and operations of the Company to enable better monitoring and ensuring of timely compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period the company has:

(i)     Initiated a Scheme of Amalgamation of the Company with Simbhaoli Sugars Limited (SSL), the holding company (the Scheme) and filed the same with the Hon’ble High Court of Judicature at Allahabad (the Court). the shareholders and unsecured creditors of transferor Company have approved the Scheme and the meetings of the secured creditors of both the companies have been convened as per the directions of Hon’ble Court on July 11, 2015. Based on record and as explained to us, pending sanction of the Scheme by the Court, no financial effect has been considered in financial statements for the year ended at 31st March, 2015.

For Amit Gupta & Associates

Company Secretaries

Amit Gupta

Proprietor

Membership No. : F5478

C.P. No. 4682

Date: 30.05.2015

Place: Lucknow

Note: This report should be read with the letter of even date by the Secretarial Auditors.

To,

The Members,

SIMBHAOLI SPIRITS LIMITED,

Kothi No. 1, Distillery Compound,

Hapur Road, Simbhaoli, Uttar Pradesh

Our Report of even date is to be read along with this letter.Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. Where ever required, we have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For Amit Gupta & Associates

Company Secretaries

Amit Gupta

Proprietor

Membership No. : F5478

C.P. No. 4682

Date: 30.05.2015

Place: Lucknow

Annexure-2

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(a)       Energy conservation measures taken

The Company has been taking regular measures for the conservation of energy in plant operations in general. However, No major energy conservation measures were taken during the year.

(b)       Additional investments and proposals for reduction of consumption of energy

No additional investment and proposal so far

(c)       Impact of above measures

Not Applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Activities relating to export; initiatives taken to increase exports; development of new export markets for products and services; exports and import plans are mentioned in the Directors Report.

Total foreign exchange used and earned for the year ended March 31, 2015:

During the year, Foreign exchange aggregation to Rs. 462.89 lacs (previous year Rs. 1114.12 lacs) was earned by the company against the export of alcohol. A sum of Rs. 4.17 lacs (previous year Rs 6.73 lacs) was spent in foreign currency.

FORM A

Disclosure of particulars with respect to conservation of energy for the year ended 31stMarch, 2015

A.    Power and fuel          consumption

B.     CONSUMPTION PER K. LTR. OF ALCOHOL PRODUCTION

*Since, there was no production in this year, the details are not applicable to the Company.

NOTES:For electricity generated through diesel generator, cost of the diesel has been considered. Since various types of fuel used are alternative to each other, no standard can be fixed for their consumption. Due to change in mix of fuel used, no comparison can be made with the earlier periods. Costs have been given based on the records maintained under the Cost Accounting Records Rules, applicable to Alcohol industry.

FORM B

Disclosure of particulars with respect to technology absorption for the period ended March 31, 2015.

I    Specific areas in which research and development carried out by the Company

No specific measures taken during the year.

II Benefit derived

Not Applicable

III. Future plan of action

No specific plan in current year.

IV. Expenditure on Research & Development (R & D)

No expenditure was incurred on R&D.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1.   Efforts made

Efforts made and steps taken in the previous years towards technology absorption, adaptation and innovations were continued during the period under review.

2.   Benefits

The benefits derived in the form of cost reduction and the improvement in the quality of the product continued to be available to the Company.

3.   Particulars of technologies imported during the last five years

Not applicable

Annexure-3:

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2015

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014

I.         REGISTRATION & OTHER DETAILS:

II.         PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

III.         PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

IV.          SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i)                 Category-wise Share Holding

(ii)               Shareholding of Promoter-

(iii)    Change in Promoters’ Shareholding (please specify, if there is no change)

There has been no change in the Shareholding of the Company during this year w.e.f 31.03.2014.

(iv)    Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):

(v)               Shareholding of Directors and Key Managerial Personnel:

V) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(Rs. In crores)

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:                                  (Rs. In Lacs)

*Resigned w.e.f. October 20, 2014                                #Appointed w.e.f October 20, 2014

B. Remuneration to other directors:

(Rs in Lacs)

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

During the year the Company has nominated KMP form the holding Company.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

The Company is engaged in the potable alcohol business and has an installed capacity of 90 kilo liters per day (KLD) along-side dedicated lines for Country Liquor, IMFL and Exports and intended to develop new marketing areas, creation of new brands, carrying out business promotional activities, capacity enhancement and raising necessary resources. The business had created a presence in the Indian markets through CSD, Civil – U.P, Delhi, Haryana, HP, West Bengal & Orissa, and Overseas in the U.A.E. & African Countries. Further, the Company has a plan to re-jig its business and re-focusing on the production of country liquor, exports and supplies to armed forces. However, during February 2014, the Company’s operations were suspended as the Pollution Control Authorities have withdrawn their consent for operations for the year 2014 and has issued a notice for suspension of operation(s) of the Distillery plant situated at Simbhaoli on account of non-fulfillment of certain conditions on the pollution and effluent discharge. Further, in a complaint against the Company, Hon’ble National Green Tribunal (NGT), Principal Bench, New Delhi in its order had issued directions for mandatory compliance before re-start of the distillery operations. NGT has also imposed monetary penalty of Rs. 5.0 crore on the Company. In an appeal, the Hon'ble Supreme Court has passed an order directing that it has seen no infirmity in order passed by the NGT and there is no reason for the Court to interfere in the same. Following the above, the Company has paid the penalty as per the directions of Hon’ble Court and has applied for the necessary consents from the Uttar Pradesh Pollution Control Board (UPPCB) and Central Pollution Control Board (CPCB) and taken steps to re-start the plant. The other requirements are also being completed, and a joint inspection has been carried out by the UPCB and CPCB as per the directions of the NGT and your directors are confident that, the Company is expected to resume operations on receipt of necessary consent from the UPPCB and other regulatory authorities. Scheme of Amalgamation A Scheme of Amalgamation (the Scheme) of Simbhaoli Sugars Limited (SSL), the holding Company with Simbhaoli Spirits Limited (SISPL), as approved by the Board of both the companies, was filed with the Hon’ble High Court of Judicature at Allahabad (the Court). With effect from the Appointed Date the entire business and undertaking of the Company, shall be and stand transferred to and vested in or be deemed to have been transferred to and vested in SISPL, as a going concern without any further act and deed. As per the Scheme, the name of the Amalgamated Company shall be changed to “Simbhaoli Sugars Limited”and it is also proposed to issue equity shares of the Amalgamated Company to the existing preference shareholders of Amalgamating Company in the same proportion corresponding to their existing shareholding based on the valuation report of the firm of an Independent Chartered Accountants. The shareholders and unsecured creditors of SSL have approved the Scheme on September 20, 2014. The meetings of the secured creditors of both the companies have been convened by Hon’ble Court on July 11, 2015.

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 2 and is attached to this report.

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 2 and is attached to this report.

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 2 and is attached to this report.

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 at the end of the financial year and of the profit and loss of the Company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and the directors had devised proper systems to ensure compliance with the provisions of all the applicable laws and that such systems were adequate and operating effectively