Notes to Accounts of Tilaknagar Industries Ltd.

Mar 31, 2025

viii) Provisions and Contingent Liabilities

A provision is recognized if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects
current market assumptions of the time value of money
and the risks specific to the liability. The unwinding of
discount is recognized as finance cost.

The amount recognized as a provision is the best estimate
of the consideration required to settle the present
obligation at reporting date, taking into account the risks
and uncertainties surrounding the obligation.

When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognized as an asset if it is
virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.

Contingent liabilities are possible obligations that arise
from past events and whose existence will only be
confirmed by the occurrence or non-occurrence of one
or more future events not wholly within the control of
the Company. Where it is not probable that an outflow
of economic benefits will be required, or the amount
cannot be estimated reliably, the obligation is disclosed
as a contingent liability, unless the probability of outflow
of economic benefits is remote.

ix) Leases

As a lessee

The Company''s leases primarily consist of leases of
office premises, warehouses and guest houses. The
Company assesses whether a contract contains a lease,
at inception of a contract. A contract is, or contains, a
lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange
for consideration.

At the date of commencement of the lease, the Company
recognizes a ROU assets and a corresponding lease liability
for all lease arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short-term
leases) and low value leases. For these short-term and/
or low value leases, the Company recognises the lease
payments as an operating expense on a straight-line basis
over the term of the lease. Certain lease arrangements
includes the options to extend or terminate the lease
before the end of the lease term. ROU assets and lease
liabilities includes these options when it is reasonably
certain that they will be exercised.

The ROU assets are initially recognized at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses. Currently, ROU assets are being
amortised over a period of 3-5 years based on lease term
being lower of lease term and estimated useful life of
underlying assets.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have
been classified as financing activities in statement of
cash flows.

As a lessor

Lease income from operating leases where the Company
is a lessor is recognised in income on a straight-line basis
over the lease term unless the receipts are structured
to increase in line with expected general inflation to
compensate for the expected inflationary cost increases.

x) Borrowings

Borrowings are initially recognised at fair value (net of
transaction costs incurred). Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognized in Statement of profit and loss over

the period of the borrowings using the effective interest
rate method. Subsequently all borrowings are measured
at amortised cost using the effective interest rate method.

Borrowings are derecognized from the balance sheet
when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished
or transferred to another party and the consideration
paid, including any non-cash assets transferred or
liabilities assumed, is recognised in statement of profit
and loss. The gain / loss is recognised in other equity in
case of transaction with shareholders

Borrowing costs

General and specific borrowing costs directly attributable
to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial
period of time to get ready for their intended use, are
added to the cost of those assets, until such time the
assets are substantially ready for their intended use. All
other borrowing costs are recognised as an expense in
statement of Profit and Loss in the period in which they
are incurred.

xi) Revenue Recognition

Revenue comprises revenue from contracts with customers
for sale of goods. Revenue from sale of goods is inclusive
of excise duties and is net of returns, trade allowances,
rebates, value added taxes, Goods and Services Tax (GST)
and such amounts collected on behalf of third parties.

Revenue is recognized on satisfaction of performance
obligation upon transfer of control of promised products
or services to customers, at an amount that reflects the
consideration expected to be received by the Company
in exchange for those products or services, as below:

a) Revenue from sale of products:

Revenue is recognised at transaction price on
transfer of control, being on dispatch of goods or
upon delivery to customer, in accordance with the
terms of sale.

b) Income from Royalty and Contract
manufacturing

I ncome from royalties and contract manufacturing
are recognised on an accrual basis in accordance
with the substance of relevant agreement.

c) Revenue from manufacture and sale of
products from tie-up manufacturing
arrangements:

The Company has entered into arrangements with
Tie-up Manufacturing Units (TMUs), wherein TMUs
manufacture and sell beverage alcohol on behalf
of the Company. Under such arrangements, the
Company has exposure to significant risks and
rewards associated with the sale of products
i.e. it has the primary responsibility for providing
goods to the customer, has pricing latitude and
is also exposed to inventory and credit risks.
Accordingly, the transactions of the TMUs under
such arrangements have been recorded as gross
revenue, excise duty and expenses as if they were
transactions of the Company. The Company also
presents inventory under such arrangements as its
own inventory. The net receivables from / payable
to TMUs are recognised under other financial assets/
other financial liabilities respectively.

d) Interest

I nterest income is recognized using the effective
interest rate method. The effective interest rate
is the rate that discounts estimated future cash
receipts through the expected life of the financial
asset to the gross carrying amount of the financial
asset. Interest income is included under the head
"Other income" in the statement of profit and loss.

e) Dividend

Dividend income is recognized when the Company''s
right to receive the payment is established, which
is generally when the shareholders approve
the dividend.

xii) Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the
grant relates to revenue, it is recognised in the statement
of profit and loss on a systematic basis over the periods
to which they relate. When the grant relates to an asset,
it is treated as deferred income and recognised in the
statement of profit and loss on a systematic basis over
the useful life of the asset.

xiii) Income tax

Income tax expense comprises current tax expenses and
net change in the deferred tax assets or liabilities during
the period. Current and deferred taxes are recognised

in the Statement of profit and loss, except when they
relate to item that are recognised in other comprehensive
income or directly in equity, in which case, the current and
deferred tax are also recognised in other comprehensive
income or directly in equity respectively.

a) Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount
expected to be paid or received after considering
the uncertainty, if any related to income taxes. It is
measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

b) Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.
Deferred tax is also recognised in respect of carried
forward tax losses and tax credits.Deferred tax
assets are recognised to the extent that it is probable
that future taxable profits will be available against
which they can be used.

Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will be
available against which they can be used.

Deferred tax assets recognised or unrecognised are
reviewed at each reporting date and are recognised
/ reduced to the extent that it is probable / no longer
probable respectively that the related tax benefit will
be realised.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is
realised or the liability is settled, based on the laws
that have been enacted or substantively enacted by
the reporting date.

The measurement of deferred tax reflects the tax
consequences that would follow from the manner in
which the Company expects, at the reporting date,
to recover or settle the carrying amount of its assets
and liabilities.

The Company offsets the current tax assets and
liabilities (on a year on year basis) and deferred

tax assets and liabilities, where it has a legally
enforceable right and where it intends to settle such
assets and liabilities on a net basis.

xiv) Earnings per share

The Company presents basic and diluted earnings
per share (EPS) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss after tax
attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined
by adjusting the profit or loss after tax attributable to
ordinary shareholders and the weighted average number
of ordinary shares outstanding after adjusting for the
effects of all potential dilutive ordinary shares.

xv) Statement of Cash flow

Cash flows are reported using the indirect method,
whereby profit / (loss ) for the period is adjusted for the
effects of transactions of a non-cash nature, any deferrals
or accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated. Cash and cash equivalents are
cash, balances with bank and short-term (three months or
less from the date of placement), highly liquid investments
that are readily convertible into cash and which are
subject to an insignificant risk of changes in value.

Amendment to Ind AS 7

Effective April 1, 2017, the Company adopted the
amendment to Ind AS 7, which require the entities
to provide disclosures that enable users of financial
statements to evaluate changes in liabilities arising from
financing activities, including both changes arising from
cash flows and non-cash changes, suggesting inclusion
of a reconciliation between the opening and closing
balances in the Balance Sheet for liabilities arising from
financing activities, to meet the disclosure requirement.
The adoption of amendment did not have any material
impact on the financial statements.

xvi) Share based payments

The cost of equity-settled transactions is determined by
the fair value at the date when the grant is made using
an appropriate valuation model. That cost is recognised,
together with a corresponding increase in share-based
payment (SBP) reserves in equity, over the period in
which the performance and / or service conditions are
fulfilled in employee benefits expense. The dilutive effect

of outstanding options is reflected as additional share
dilution in the computation of diluted earnings per share.

xvii) Financial instruments

a) Recognition and initial measurement

The Company initially recognises financial assets
and financial liabilities when it becomes a party to
the contractual provisions of the instrument. All
financial assets and liabilities are measured at fair
value on initial recognition. Transaction costs that
are directly attributable to the acquisition or issue
of financial assets and financial liabilities that are
not at fair value through profit or loss are added
to the fair value on initial recognition. Regular way
purchase and sale of financial assets are accounted
for at trade date.

b) Classification and subsequent measurement
Financial assets

Financial assets carried at amortised cost

A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to collect
contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at fair value through other
comprehensive income

A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange
gains and losses which are recognised in the
Statement of Profit and Loss.

Financial assets at fair value through profit or
loss

A financial asset which is not classified in any of
the above categories are subsequently fair valued
through profit or loss.

Investment in subsidiary and associate
companies

The Company has elected to recognize its
investments in subsidiary and associate companies
at cost in accordance with the option available in Ind
AS 27, ''Separate Financial Statements''. The details
of such investments are given in Note 3. Where
an indication of impairment exists, the carrying
amount of the investment is assessed and written
down immediately to its recoverable amount. The
recoverable amount is the higher of an asset''s fair
value less costs of disposal and value in use. On
disposal of investments in subsidiary and associates
the difference between net disposal proceeds
and the carrying amounts are recognised in the
Statement of profit and loss.

Financial liabilities

Financial liabilities are subsequently carried at
amortised cost using the effective interest method.
For trade and other payables maturing within one
year from the balance sheet date, the carrying
amounts approximate fair value due to the short
maturity of these instruments.

In case, the fair value of a financial asset or financial
liability, at initial recognition, differs from the
transaction price, the difference between the fair
value at initial recognition and the transaction price -

(i) i s recognised as a gain or loss if that fair value
is evidenced by a quoted price in an active
market for an identical asset or liability (i.e. a
Level 1 input) or based on a valuation.

(ii) i s deferred and is recognised as a gain or
loss only to the extent that it arises from a
change in a factor (including time) that market
participants would take into account when
pricing the asset or liability. The unamortised
portion of the deferred fair value gain / loss
difference as on reporting date, is disclosed
under other current / non-current assets /
liabilities as the case may be.

c) Derecognition
Financial assets

The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the right to
receive the contractual cash flows in a transaction

in which substantially all of the risks and rewards
of ownership of the financial assets are transferred
or in which the Company neither transfers nor
retains substantially all of the risks and rewards
of ownership and does not retain control of the
financial asset.

I f the Company enters into transactions whereby it
transfers assets recognised on its balance sheet but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred
assets are not derecognised.

If the Company neither transfers nor retains
substantially all the risks and rewards of ownership
and continues to control the transferred asset, the
Company recognizes its retained interest in the
assets and an associated liability for amounts it may
have to pay. If the Company retains substantially all
the risks and rewards of ownership of a transferred
financial asset, the Company continues to recognise
the financial asset and also recognises a collateralised
borrowing for the proceeds received.

Financial liabilities

The Company derecognises a financial liability
when its contractual obligations are discharged or
cancelled or expired.

The Company also derecognises a financial liability
when its terms are modified and the cash flows
under the modified terms are substantially different.
In this case, a new financial liability based on the
modified terms is recognised at fair value. The
difference between the carrying amount of the
financial liability extinguished and a new financial
liability with modified terms is recognised in the
statement of profit and loss.

d) Impairment of Financial Assets

The Company assesses impairment based on
expected credit losses (ECL) model at an amount
equal to:-

• 12 months expected credit losses, or

• Lifetime expected credit losses

depending upon whether there has been a
significant increase in credit risk since initial
recognition. However, for trade receivables, the
company does not track the changes in credit risk.
Rather, it recognizes impairment loss allowance
based on lifetime ECLs at each reporting date, right
from its initial recognition.

e) Offsetting

Financial assets and financial liabilities are offset
and the net amount presented in the balance sheet
when, and only when, the Company currently has a
legally enforceable right to set off the amounts and it
intends either to settle them on a net basis or realise
the asset and settle the liability simultaneously.

xviii) Exceptional items

When an item of income or expense within Statement of
profit and loss from ordinary activity is of such size, nature
or incidence that its disclosure is relevant to explain more
meaningfully the performance of the Company for the
period, the nature and amount of such items is disclosed
as exceptional items.

xix) Recent amendments to Indian Accounting
Standards:

The Ministry of Corporate Affairs ("MCA") notifies new
standards or amendment to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time. For the year ended March 31, 2025,
MCA has notified Ind AS - 117 Insurance contracts and
amendments to Ind AS 116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f. April 1, 2024. The Company has reviewed the
new pronouncements based on its evaluation has
determined that it does not have any significant impact
in its financial statements.

d) Amount received against warrants.

e) Retained earnings are the profits that Company has earned till date less transfers to general reserve dividends or other
distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans (net
of taxes) that will not be reclassified to the Statement of Profit and Loss. Retained earnings is a free reserve available
to the Company.

f) This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at
fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets
have been disposed off.

Footnotes:

a) The amount received in excess of face value of the equity shares is recognised in Securities Premium. In case of equity-
settled share based payment transactions, the difference between fair value on grant date and nominal value of share
is accounted as securities premium. It is utilised in accordance with the provisions of section 52 of the Companies
Act,2013.

b) The general reserve represents amounts appropriated out of retained earnings based on the provisions of the Act prior
to its amendment.

c) The fair value of the equity-settled share based payment transactions with employees is recognised in Statement of
Profit and Loss with corresponding credit to Employee Stock Grants Outstanding Account. The expenses in respect of
the Company''s ESOP scheme will be charged against the Reserve for employee compensation expense as per Scheme.

1 Term Loan

The Term loans availed from Kotak Mahindra Bank were:

FY 2023-24

a) Secured against all tangible / intangible assets and current assets of the Company, both present and future.

b) Secured against all the fixed assets, both present and future of the wholly owned subsidiary companies i.e. Vahni
Distilleries Private Limited and PunjabExpo Breweries Private Limited.

c) Secured with the Corporate guarantee given by the wholly owned subsidiary companies i,e, Vahini Distilleries
Private Limited and PunjabExpo Breweries Private Limited.

d) Backed by personal guarantee of Chairman & Managing Director of the Company.

FY 2024-25

a) During 2024-2025, the outstanding term loan of '' 6,642 lacs as on March 31, 2024 was repaid in full and the
security provided for the loan stands withdrawn.

2 Cash Credit (including Working Capital Demand Loan)

a) During 2023-2024, working capital limits with Kotak Bank Limited were sanctioned for '' 2,500 lacs which was
enhanced to '' 12,000 lacs during 2024-2025. As at March 31, 2025 there is no amount outstanding against these
facilities. The no dues certificate from Kotak Bank Ltd was subsequently received in FY 2025-26.

24 Financial Instruments - Accounting classification and fair value measurements

a) The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in forced or liquidation sale.

b) The following methods and assumptions were used to estimate the fair value:

1) Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current
liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due
to the short term maturities of these instruments.

2) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such
as interest rate and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken
to account for the expected losses of these receivables.

c) The company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation techniques:

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

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

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

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their
levels in the fair value hierarchy:

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities and from its financing activities,
including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The
company generally doesn''t have collateral.

25 Financial risk management
Objectives and policies
Risk management framework

The Company''s management has overall responsibility for the establishment and oversight of the Company''s risk
management framework.

The Company conducts yearly risk assessment activities to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management systems are reviewed
regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and
management standards and procedures, aims to maintain a disciplined and constructive control environment in which all
employees understand their roles and obligations.

The Company has a system in place to ensure risk identification and ongoing periodic risk assessment is carried out. The
Board of directors periodically monitors the risk assessment.

The Company has exposure to the following risks arising from financial instruments :

- Credit risk

- Liquidity risk

- Market risk

- Interest risk

Trade receivables

Customer credit risk is managed as per Company''s established policy, procedures and control relating to customer credit
risk management. Credit risk has always been managed by the Company through credit approvals, establishing credit limits
and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal
course of business.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition,
a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The
calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of
each class of financial assets. The company evaluates the concentration of risk with respect to trade receivables as low, as
its customers are located in several jurisdictions and operate in largely independent markets.

Bank balances and deposits with banks

Credit risk from balances with banks is managed by the company''s finance department as per Company''s policy. Investment
of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.
Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated
throughout the year subject to approval of the Company''s Board of directors. The limits are set to minimise the concentration
of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price of a financial
instrument. These include change as a result of changes in the interest rates, foreign currency exchange rates, equity prices
and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive
financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowing.

The company manages market risk through a risk management committee engaged in, inter alia, evaluation and identification
of risk factors with the object of governing / mitigation them accordingly to company''s objectives and declared policies in
specific context of impact thereof on various segments of financial instruments.

Currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which sales,
purchase are denominated and the respective functional currencies of Company. The Company has export sales primarily
denominated in US dollars.

28 Capital Management

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves
attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital
is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.

Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve
an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business
based on its long term financial plans.

Contingent liabilities above represent estimates made mainly for probable claims arising out of litigation and disputes pending
with tax authorities. The probability and timing of outflow with regard to these matters depend on the final outcome of
litigations / disputes. Hence the Company is not able to reasonably ascertain the timing of the outflow.

I n addition to above, the Company is also subject to legal proceedings and claims which arise in the ordinary course of
business. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where
provisions are required and disclosed as contingent liability, where applicable. The management does not reasonably
expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the
Company''s operations or financial condition.

30 Operating Lease:

a) The company has taken certain office premises and warehouse under cancellable operating leases. In the rent agreements
there are no terms for purchase option or any restriction such as those concerning dividend and additional debts. Lease
agreements of the company do not contain any variable lease payment or any residual value guarantees.

31 The disclosure of Ind AS 19 “Employee Benefits” is as follows:

Defined Contribution Plans

The Company has charged in the Statement of Profit and Loss during the financial year an amount of '' 211.32 lacs (P.Y.
'' 175.11 lacs) under defined contribution plan as employer''s contribution to Provident Fund.

Defined Benefit Plans

The Employees'' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined
based on actuarial valuation using the Projected Unit Credit Method (PUCM), which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final
obligation.The obligation for leave encashment is recognized in the same manner as gratuity

33 Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its
related products which constitute a single business segment. This is the only activity performed and is thus also the main
source of risks and returns. Accordingly there is no other separate segment as per Indian Accounting Standard 108 dealing
with "Operating Segment". The geographical segmentation is insignificant as the export turnover is less than 10% of the
total turnover and also company''s Non Current assets (other than Financial Instrument, deferred tax, post employment
benefits and rights arising under insurance contracts) are located in India.

Revenue of '' 2,56,757 lacs is derived from the three external customers (P.Y.? 2,46,006 lacs) that individually contributed
more than 10% of the total revenue.

42 The Company expects to restart the grain distillery plant post incurring of relevant capital expenditure. In view of this, the
management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA
Plant is not required to be estimated.

43 a) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming approximately '' 731.10

lacs towards refund of security deposit and other dues. The Hon''ble Court vide its Order dated December 22, 2007
dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter
claim for the sum of approximately '' 1,193.00 lacs against Anupama Wine Distributors and the matter is pending
before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors and the
cross examination is underway.

b) A body corporate has filed a suit in Bombay High Court in 2009 regarding ownership of one of the brands owned by
the Company, and the Company has filed a counter claim in this regard. The Court in its order dated December 22,
2011 has adjudicated in favor of the Company and allowed unrestricted usage of the concerned brand throughout
India by the Company. An appeal has been filed by the body corporate against the order dated December 22, 2011,
however, no stay has been granted, and the order is subsisting till date.

I n a separate application filed in the counter claim, the Court in its order dated February 7, 2025 has given approval
to the assignee of the body corporate to also use the name of the concerned brand in West Bengal. The Company
believes it has strong case in its favor and has filed an appeal with the Division Bench of Bombay High Court against
the said order. The Bombay High Court has put a stay on the order dated February 7, 2025, and subsequently an
undertaking has been given by the assignee of body corporate that it will not act upon the order dated February 7,
2025. The matter is sub-judice.

The Company continues its uninterrupted exclusive use and sale of the goods under the said brand.

45 Exceptional Items in the year ended March 31, 2025 includes :

Over the years, the net worth of PunjabExpo Breweries Private Ltd" a wholly owned subsidiary (referred as PE) had been
fully eroded despite attempts to rationalize its administrative overheads. In the year 2022-2023 the company had assessed
the situation and concluded that there is no sufficient visibility on PE northern business and return on investments. The
company accordingly provided for impairment of the equity investments in PE of '' 2,680.39 lacs in its books of accounts
under exceptional items for the year ended March 31, 2023. In the following years, the management of PE increased /
rationalised the capacity utilisation and contract manufacturing rates for bottling carried on for the holding company.
Consequent to the financial restructuring and steps taken by PE, efficiency has improved resulting in profit during the year
and positive networth at the year end. The company reassessed the value of its equity investment through an independent
valuation exercise at '' 1,002.24 lacs. The excess provision created in 2022-2023 was thus written back for '' 1,002.24 under
exceptional items for year ended March 31, 2025.

46 During the year ended March 31, 2025, The Deputy Commissioner of Income tax (DCIT) has reassessed the income pursuant
to the search conducted in February 2024, and has passed the assessment orders from AY 2016-17 to AY 2024-25 as per the
applicable provisions of the Income tax Act, 1961. Certain additions / disallowances were made to the returned income of the
company. The Income tax department has set off the brought forward losses of the company against the assessed income.
Overall, there is no demand raised for the said years except '' 0.03 lacs for AY 2023-24 while refunds of '' 138.43 lacs and
'' 343 lacs for AY 2021-2022 and AY 2024-2025 respectively have been granted. Based on the Company''s riskassessment
process and applicable laws, there is no material impact on the financial position, operation or other activities of the
Company. The company has filed further appeals against the above assessment orders and expects a favourable outcome.

47 The Revenue from Operations includes '' 2,901.09 lacs for the year ended March 31, 2025 (P.Y. '' Nil Lacs) received as partial
Subsidy from Government of Maharashtra under Package Scheme of Incentives, 2007, relating to past investments.

48 During the financial year 2024-2025, the Finance Committee of the Board of Directors approved a follow-on investment
of '' 1,315 lacs in Spaceman Spirits Lab Private Limited ("SSL"), makers of premium Indian craft gin Samsara and craft rum
Sitara. The Company shall invest '' 1,315 lacs across 3 tranches over an 18 month period by subscribing to (a) 2,546 Equity
Shares and (b) 16,890 Compulsory Convertible Preference Shares ("CCPS"). Earlier, the Company had executed a Share
Subscription and Investment Agreement on March 27, 2023, against which the Company had subscribed to 6,636 Equity
Shares and 7,374 CCPS of SSL equivalent to 10% of share capital on a fully diluted basis for '' 975 lacs. The total shareholding
percentage of the Company in SSL after the proposed investment shall stand increased to 20.02% (on a fully diluted basis).
The first tranche of investment of '' 399.99 lacs was made in 2024-2025 .

49 During the financial year 2024-2025, the Finance Committee of the Board of Directors approved an investment of '' 802.85
lacs in Round the Cocktails Private Limited ("Bartisans") which is a ''ready to pour'' beverage company, engaged in the
business of developing, producing, marketing and selling non-alcoholic beverages which can be mixed with alcohol to create
cocktails, and can also be consumed on their own as mocktails. The Company has invested '' 802.85 lacs by (a) Subscribing
to 2,352 Compulsory Convertible Preference Shares (""CCPS"") and 1 equity share of Bartisans equivalent to 13.52% of
share capital on a fully diluted basis for '' 300 lacs; and (b) Purchasing from existing shareholders, 163 equity shares and
3,781 CCPS of Bartisans equivalent to 22.65% of share capital on a fully diluted basis for '' 502.85 lacs. In aggregate, the
Company now owns 36.17% of the share capital of Bartisans on a fully diluted basis post its investment.

50 a) The Board of Directors recommended payment of Dividend of '' 1 per equity share of '' 10/- each for the financial year

ended March 31, 2025 subject to the approval of the Members at the ensuing Annual General Meeting.

b) During the financial year 2024-25, the Company has paid dividend of '' 964.78 lacs ('' 0.50 per share) against the
dividend declared for the financial year 2023-24.

54 The Company has used accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.
With respect to changes made by certain privileged access rights to the SAP application and / or the underlying database
audit trail feature is not enabled. The Company does have a privileged access monitoring tool that monitors these access
rights and the Company is in the process of further strengthening this feature with adequate logs to be maintained. Further
no instance of audit trail feature being tampered with was noted in respect of the software. Additionally, the audit trail of
previous year has been preserved by the Company as per the statutory requirements for record retention to the extent it
was enabled and recorded in the previous year.

55 Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

As per our Report of even date annexed. For and on behalf of the Board of Directors

For Harshil Shah & Company Amit Dahanukar Aparna Chaturvedi

Chartered Accountants Chairman & Managing Director Director

Firm Registration No.141179W (DIN:00305636) (DIN: 00028647)

Himmat Sharma Abhinav Gupta Minuzeer Bamboat

Partner Chief Financial Officer Company Secretary

Membership No.156501

Place : Mumbai

Date : May 14, 2025

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Mar 31, 2024

b) Terms / rights attached to equity shares

Each holder of equity share is entitled to one vote per share with a right to receive per share dividend by the Company, when declared. In the event of liquidation, the equity shareholders will be entitled to receive remaining assets of the Company after distribution of all preferential amounts in the proportion to the number of equity shares held by them.

a) The amount received in excess of face value of the equity shares is recognised in Securities Premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. It is utilised in accordance with the provisions of section 52 of the Companies Act, 2013.

b) The general reserve represents amounts appropriated out of retained earnings based on the provisions of the Act prior to its amendment.

c) The fair value of the equity-settled share based payment transactions with employees is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Grants Outstanding Account.

The expenses in respect of the Company''s ESOP scheme will be charged against the Reserve for employee compensation expense as per Scheme.

d) Amount received against warrants.

e) Retained earnings are the profits that Company has earned till date less transfers to general reserve dividends or other distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans (net of taxes) that will not be reclassified to the Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.

a) The loans from Kotak Mahindra Bank ("term loans") are secured against all the tangible / intangible assets and current assets of the Company, both present and future.

b) The term loans are also secured against all the fixed assets, both present and future of the wholly owned subsidiary companies i.e. Vahni Distilleries Private Limited and PunjabExpo Breweries Private Limited.

c) The term loans outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

d) The term loans are also secured with the corporate guarantee given by the wholly owned subsidiary companies i,e, Vahini Distilleries Private Limited and PunjabExpo Breweries Private Limited.

e) The term loans from Kotak Mahindra Bank are repayable by July 30, 2027 as per the repayment schedule provided by Kotak Bank. Interest is payable on monthly basis @ 13.05% .

f) Term Loan Maturity Schedule

24 Financial Instruments - Accounting classification and fair value measurements

a) The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.

b) The following methods and assumptions were used to estimate the fair value:

1) Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

2) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rate and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

c) The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:

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

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

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

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their levels in the fair value hierarchy :

25 Financial risk management Objectives and policies Risk management framework

The Company''s management has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company conducts yearly risk assessment activities to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has a system in place to ensure risk identification and ongoing periodic risk assessment is carried out. The Board of directors periodically monitors the risk assessment.

The Company has exposure to the following risks arising from financial instruments :

- Credit risk

- Liquidity risk

- Market risk

- Interest risk

a) Credit risk

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The company generally doesn''t have collateral.

Trade receivables

Customer credit risk is managed as per Company''s established policy, procedures and control relating to customer credit risk management. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets.

Bank balances and deposits with banks

Credit risk from balances with banks is managed by the company''s finance department as per Company''s policy. Investment of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s Board of directors. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price of a financial instrument. These include change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowing.

The company manages market risk through a risk management committee engaged in, inter alia, evaluation and identification of risk factors with the object of governing / mitigation them accordingly to company''s objectives and declared policies in specific context of impact thereof on various segments of financial instruments.

Currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which sales, purchase are denominated and the respective functional currencies of Company. The Company has export sales primarily denominated in US dollars.

d) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The entity''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

26.1 Deferred tax asset on unabsorbed depreciation under Income Tax Act, has been recognised to the extent it is probable that future taxable income will be available against which these can be utilised. Accordingly, deferred tax assets have not been created on carried forward business losses and unabsorbed depreciation and of H 25,807.02 lacs as on March 31, 20224 (P.Y. H 16,707.65 lacs)

28 Capital Management

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.

Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

Contingent liabilities above represent estimates made mainly for probable claims arising out of litigation and disputes pending with tax authorities. The probability and timing of outflow with regard to these matters depend on the final outcome of litigations / disputes. Hence the Company is not able to reasonably ascertain the timing of the outflow.

In addition to above, the Company is also subject to legal proceedings and claims which arise in the ordinary course of business. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liability, where applicable. The management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s operations or financial condition.

30 Operating Lease:

a) The company has taken certain office premises and warehouse under cancellable operating leases. In the rent agreements there are no terms for purchase option or any restriction such as those concerning dividend and additional debts. Lease agreements of the company do not contain any variable lease payment or any residual value guarantees.

b) Lease rentals of H 22.12 lacs (P.Y.H 29.21 lacs) in respect of short term lease have been recognised in the statement of profit and loss as rent expense.

c) The Company has taken bottling units under short term cancellable operating lease at various locations and during the financial year H 155.45 lacs (P.Y H 91.44 lacs) paid towards lease rentals has been charged to Statement of Profit and Loss under Contract manufacturing cost.

31 The disclosure of Ind AS 19 “Employee Benefits" is as follows:Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of H 175.11 lacs (P.Y. H 143.65 lacs) under defined contribution plan as employer''s contribution to Provident Fund.

Defined Benefit Plan

The Employees'' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method (PUCM), which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

32 Employee Stock Option Scheme

a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010 respectively and also approved Employee Stock Option Scheme (ESOP) 2012 on May 24, 2012 by way of Postal Ballot.

33 Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

During the year ended March 31,2024, three customers contributed 10% or more than to the Company''s revenue.

35 I n accordance with proviso to Section 129(3) read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company.

Nature of CSR activities : Animal welfare, Heathcare and sanitation , Literacy, promoting Sports and Fitness, solid waste management

* The Company has transferred Rs. 72 lacs in Unspent CSR Account as per Section 135(6) of the Companies Act, 2013 for FY 2022-23 with respect to the ongoing CSR projects of the Company at Shrirampur. The Company shall spend the amounts over three years for the said projects as per the details mentioned in the Corporate Social Responsibiltiy Report.

41 The Company has entered into arrangements with Tie-up Manufacturing Units (TMUs) and its wholly owned Subsidiaries (referred as Subsidiaries), wherein TMUs and Subsidiaries manufacture and sell beverage alcohol on behalf of the Company. Under such arrangements, the Company has exposure to significant risks and rewards associated with the sale of products i.e. it has the primary responsibility for providing goods to the customer, has pricing latitude and is also exposed to inventory and credit risks. Accordingly, the transactions of the TMUs and Subsidiaries under such arrangements have been recorded as gross revenue, excise duty and expenses as if they were transactions of the Company. The Company also presents inventory under such arrangements as its own inventory. The net receivables from / payable to TMUs and Subsidiaries are recognised under other financial assets / other financial liabilities respectively.

42 The Company expects to restart the grain distillery plant post incurring of relevant capital expenditure. In view of this, the management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA Plant is not required to be estimated.

43 a) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming approximately H 731.10

lacs towards refund of security deposit and other dues. The Hon''ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for the sum of approximately H 1,193.00 lacs against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors. b) A body corporate has filed a legal suit on the Company to obtain restraining order on the use of certain trademarks owned by the Company. An interim order was passed by the Bombay High Court upholding the ownership of the Company in the aforesaid trade marks and allowing the Company continuous and uninterrupted use of the said trademarks without any restraint. The interim order continues and the appeal filed by the body corporate against the Company is pending. The Company has filed Interim Application to restrain the Body Corporate from manufacturing said Trademarks owned by the Company. The said Interim Application is being heard before Hon''ble Bombay High Court.

45 During the year ended March 31 2024, the Company has alloted the following equity shares on preferential basis

a) 41,82,390 equity shares of face value of H 10/- each to promoters / promoter group at an issue price of H 53/- per equity share including a premium of H 43/- per share.

b) 18,05,556 equity shares of face value of H 10/- each to entities at an issue price of H 72/- per equity share including a premium of H 62/- per share.

46 The Hon''ble National Company Law Tribunal (NCLT), Mumbai has approved the scheme under Section 230-232 of the Companies Act, 2013 vide order dated May 17, 2023 in the matter of Scheme of Amalgamation (Merger by Absorption) of Kesarval Springs Distillers Private Limited ("KSDPL" or the "Transferor Company 1"), Mykingdom Ventures Private Limited ("MVPL" or the "Transferor Company 2"), Srirampur Grains Private Limited ("SGPL" or the "Transferor Company 3") and Studd Projects Private Limited ("SPPL" or the "Transferor Company 4") with and into Tilaknagar Industries Ltd. ("TI" or the "Transferee Company") and their respective shareholders. The Company has filed INC-28 with Ministry of Corporate Affairs on June 08, 2023. Consequent to the filing of INC-28, the said Scheme has been accounted from the appointed date i.e. April 01 , 2022 under common control as per Ind AS 103 - Business Combination, based on which the carrying value of assets amounting to H 5.67 lacs, liabilities amounting to H 2.25 lacs and retained earnings amounting to H (52.52) lacs have been amalgamated with and be vested in transferee company. Consequently, amalgamation reserve of H (19.00) lacs has been recorded on merger in the books of the transferee Company. Accordingly the figures in the statement for the year ended March 31, 2023 have been restated to include the effect of Scheme of Amalgamation (Merger by Absorption).

47 The Income-Tax authorities (''the department'') had conducted search activity during the month of February 2024 at some of the premises, plants and residences of Director of the Company. The Company extended full cooperation to the Income-tax officials during the search and provided required details, clarifications, and documents. As on the date of issuance of year ended March 31, 2024 financial statements, the Company has not received any written communication from the department regarding the outcome of the search, therefore, the consequent impact on the year ended March 31, 2024 financial statements, if any, is not ascertainable.

The Management, after considering all available records and facts known to it, is of the view that there is no material adverse impact on the financial position of the Company and no material adjustments are required to these financial statements for the year ended March 31, 2024 in this regard.

48 a) The Board of Directors recommended payment of Dividend of H 0.50 per equity share of H 10/- each for the financial

year ended March 31, 2024 subject to the approval of the Members at the ensuing Annual General Meeting. b) The Company has paid dividend for the financial year 2022-23 of H 479.32 lacs (H 0.25 per share) during the financial year 2023-24.

51 Other Statutory Information:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company does not have any immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the Company.

iii) The Company does not have any transactions with the struck off Companies.

iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

v) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:-

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:-

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or;

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

viii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

ix) The Company has not been declared as a wilful defaulter.

x) The Company was sanctioned H 2,500 lacs working capital limits from Kotak Mahindra Bank during the year.

52 The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. With respect to changes made by certain privileged access rights to the SAP application and / or the underlying database audit trail feature is not enabled. The Company does have a privileged access monitoring tool that monitors these access rights and the Company is in the process of further strengthening this feature with adequate logs to be maintained. Further no instance of audit trail feature being tampered with was noted in respect of the software.

53 Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2023

Terms / rights attached to equity shares

Each holder of equity share is entitled to one vote per share with a right to receive per share dividend by the Company, when declared. In the event of liquidation, the equity shareholders will be entitled to receive remaining assets of the Company after distribution of all preferential amounts in the proportion to the number of equity shares held by them.

a) The amount received in excess of face value of the equity shares is recognised in Securities Premium. Incase of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. It is utilised in accordance with the provisions of section 52 of the Companies Act,2013.

b) The general reserve represents amounts appropriated out of retained earnings based on the provisions of the Act prior to its amendment.

c) The fair value of the equity-settled share based payment transactions with employees is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Grants Outstanding Account.

The expenses in respect of the Company''s ESOP scheme will be charged against the Reserve for employee compensation expense as per court Scheme.

d) Amount received against warrants.

e) Retained earnings are the profits that Company has earned till date less transfers to general reserve dividends or other distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans (net of taxes) that will not be reclassified to the Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.

a) The loans from Asset Reconstruction Company ("term loans") are secured against all the tangible / intangible assets and current assets of the Company, both present and future.

b) The term loans are also secured against all the fixed assets and current assets, both present and future of the wholly owned subsidiary companies i.e. Vahni Distilleries Private Limited and PunjabExpo Breweries Private Limited. The said security creation is pending.

c) The term loans are further secured by way of first charge of unpledged shareholding of the Company held by the Promoter, second charge by way of pledge of already pledged shareholding of the Company held by the Promoter and pledge of 100% shareholding of the Subsidiary Companies. The said security creation is pending.

d) The term loans outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

e) Subsidiary Companies i.e. Vahini Distilleries Private Limited and PunjabExpo Breweries Private Limited are the Corporate Obligor to the term loans from Edelweiss Asset Reconstruction Company (EARC).

24 FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATION AND FAIR VALUE MEASUREMENTS

a) The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current

transaction between willing parties, other than in forced or liquidation sale.

b) The following methods and assumptions were used to estimate the fair value:

1) Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

2) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rate and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

c) The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:

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

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

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

25 FINANCIAL RISK MANAGEMENT Objectives and policies

Risk management framework

The Company''s management has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company conducts yearly risk assessment activities to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has a system in place to ensure risk identification and ongoing periodic risk assessment is carried out. The Board of directors periodically monitors the risk assessment.

The Company has exposure to the following risks arising from financial instruments :

- Credit risk

- Liquidity risk

- Market risk

- Interest risk

a) Credit risk

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The company generally doesn''t have collateral.

Trade receivables

Customer credit risk is managed as per Company''s established policy, procedures and control relating to customer credit risk management. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets.

Bank balances and deposits with banks

Credit risk from balances with banks is managed by the company''s finance department as per Company''s policy. Investment of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s Board of directors. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price of a financial instrument. These include change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowing.

The company manages market risk through a risk management committee engaged in, inter alia, evaluation and identification of risk factors with the object of governing / mitigation them accordingly to company''s objectives and declared policies in specific context of impact thereof on various segments of financial instruments.

Currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which sales, purchase are denominated and the respective functional currencies of Company. The Company has export sales primarily denominated in US dollars.

A 1% decrease in foreign exchange rates at the reporting date would have had equal but opposite effect on the amounts shown above, on the basis that all other variable remain constant.

d) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The entity''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

26.1 Deferred tax asset on unabsorbed depreciation under Income Tax Act, has been recognised to the extent it is probable that future taxable income will be available against which these can be utilised. Accordingly, deferred tax assets have not been created on carried forward business losses and unabsorbed depreciation and of '' 16,707.65 lacs as on March 31, 2023 (P.Y. '' 26,201.37 lacs)

28 CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.

Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

Contingent liabilities above represent estimates made mainly for probable claims arising out of litigation and disputes pending with tax authorities. The probability and timing of outflow with regard to these matters depend on the final outcome of litigations / disputes. Hence the Company is not able to reasonably ascertain the timing of the outflow.

In addition to above, the Company is also subject to legal proceedings and claims which arise in the ordinary course of business. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liability, where applicable. The management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s operations or financial condition.

30 OPERATING LEASE:

a) The company has taken certain office premises and warehouse under cancellable operating leases. In the rent agreements there are no terms for purchase option or any restriction such as those concerning dividend and additional debts. Lease agreements of the company do not contain any variable lease payment or any residual value guarantees.

b) Lease rentals of '' 29.21 lacs (P.Y.? 12.69 lacs) in respect of short term lease have been recognised in the statement of profit and loss as rent expense.

c) The Company has taken bottling units under short term cancellable operating lease at various locations and during the financial year '' 91.44 lacs ('' Nil) paid towards lease rentals has been charged to Statement of Profit and Loss under Contract manufacturing cost.

31 THE DISCLOSURE OF IND AS 19 “EMPLOYEE BENEFITS” IS AS FOLLOWS:Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of '' 143.65 lacs (P.Y. '' 87.94 lacs) under defined contribution plan as employer''s contribution to Provident Fund.

32 EMPLOYEE STOCK OPTION SCHEME

a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010 respectively and also approved Employee Stock Option Scheme (ESOP) 2012 on May 24, 2012 by way of Postal Ballot.

33 SEGMENT REPORTING:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

During the year ended March 31,2023, three customers contributed 10% or more than to the Company''s revenue.

41 The Company has entered into arrangements with Tie-up Manufacturing Units (TMUs) and its wholly owned Subsidiaries (referred as Subsidiaries), wherein TMUs and Subsidiaries manufacture and sell beverage alcohol on behalf of the Company. Under such arrangements, the Company has exposure to significant risks and rewards associated with the sale of products i.e. it has the primary responsibility for providing goods to the customer, has pricing latitude and is also exposed to inventory and credit risks. Accordingly, the transactions of the TMUs and Subsidiaries under such arrangements have been recorded as gross revenue, excise duty and expenses as if they were transactions of the Company. The Company also presents inventory under such arrangements as its own inventory. The net receivables from / payable to TMUs and Subsidiaries are recognised under other financial assets / other financial liabilities respectively.

42 The Company expects to restart the grain distillery plant during the financial year 2023-24 and has also received the permission for operating the fermentation section till March 31,2024. It is expected that permission for operating the distillation section also will be received soon. In view of this, the management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA Plant is not required to be estimated.

43 a) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming approximately '' 731.10 lacs

towards refund of security deposit and other dues. The Hon''ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for the sum of approximately ''1,193.00 lacs against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors. The Company has filed an application to club both the matters related to Anupama Wine Distributors and Anupama Distributors as the evidences are the same and also an application to transfer both the suits in same court. The application for transfer of both the suits in same Court has been allowed and now both the suits are heard in the same Court. Examination in chief and cross examination of both the parties has been completed in the suit no. 8311. The concerned suit has been stayed because of order in writ petition filed by Anupama against an order rejecting their prayer for filing their evidence in the counter claim filed by Tilaknagar Industries Ltd.

b) A body corporate has filed a legal suit on the Company to obtain restraining order on the use of certain trademarks owned by the Company. An interim order was passed by the Bombay High Court upholding the ownership of the Company in the aforesaid trade marks and allowing the Company continuous and uninterrupted use of the said trademarks without any restraint. The interim order continues and the appeal filed by the body corporate against the Company is pending. Whereas the body corporate has been restrained by an order of Bombay High Court from launching the concerned trade marks before obtaining the leave of the Court.

45 During the year 2022-2023, after the requisite Board and shareholders'' approval, the Company has alloted the

following equity shares :-

a) 50,62,893 equity shares of face value of '' 10/- each to promoters / promoter group at an issue price of '' 53/- per equity share including a premium of '' 43/- per share

b) 99,99,988 equity shares of face value of '' 10/- each to entities at an issue price of '' 72/- per equity share including a premium of '' 62/- per share,

c) 1,05,26,315 equity shares of face value of '' 10/- each to an entity at an issue price of '' 95/- per equity share including a premium of '' 85/- per share.

Further, the following warrants are outstanding as on March 31, 2023 :

a) 41,82,390 warrants issued to promoter group on a preferential basis at an issue price of '' 53/- per warrant including a premium of '' 43/- per warrant.

b) 18,05,556 warrants issued to non-promoter group on a preferential basis at an issue price of '' 72/- per warrant including a premium of '' 62/- per warrant.

46 The Board of Directors of Tilaknagar Industries Limited ("TI" or the Transferee Company") at their Board Meeting held on May 30, 2022, have inter alia, approved the Composite Scheme of Amalgamation ("the scheme") under Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with relevant rules & regulations framed thereunder.The Scheme, inter alia, provides for amalgamation by way of absorption and vesting of four wholly-owned subsidiaries of the Company, viz. (i) Kesarval Springs Distillers Private Limited ("KSDPL"); (ii) Mykingdom Ventures Private Limited ("MVPL"); (iii) Srirampur Grains Private Limited ("SGPL"); and (iv) Studd Projects Private Limited ("SPPL") [hereinafter collectively referred to as the "Transferor Companies" and individually referred to as the "Transferor Company"] with and into TI.

The "appointed date" as per the scheme is the 1^st day of April, 2022 or such other date as may be approved by the Honourable National Company Law Tribunal(s), for the purposes of this Scheme. The Scheme as aforesaid shall be subject to necessary approvals by the Shareholders, Creditors, Jurisdictional Bench of National Company Law Tribunal ("NCLT") and such other statutory and regulatory approvals as may be required. Pending such approvals, the financial have been prepared without giving any effect to the said Scheme.

47 The Board of Directors at its meeting held on May 16, 2023 has proposed a final dividend of ''0.25 per equity share of Face value '' 10/- each for the financial year ended March 31, 2023.

50 OTHER STATUTORY INFORMATION:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company does not have any immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the Company.

iii) The Company does not have any transactions with the struck off Companies.

iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

v) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:-

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or"

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:-

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or;"

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

viii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

ix) The company has not been declared as a wilful defaulter.

x) The Company did not have sanctioned working capital limits during the year from any banks / lenders.

51 Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2021

a) The loans from Asset Reconstruction Company ("term loans") are secured against all the tangible / intangible assets and current assets of the Company, both present and future.

b) The term loans are also secured against all the fixed assets and current assets, both present and future of the wholly owned subsidiary companies i.e. Vahni Distilleries Private Limited and PunjabExpo Breweries Private Limited. The said security creation is pending.

c) The term loans are further secured by way of first charge of unpledged shareholding of the Company held by the Promoter, second charge by way of pledge of already pledged shareholding of the Company held by the Promoter and pledge of 100% shareholding of the Subsidiary Companies. The said security creation is pending.

d) The term loans outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

e) Subsidiary Companies i.e. Vahini Distilleries Private Limited and PunjabExpo Breweries Private Limited are the Corporate Obligor to the term loans from Edelweiss Asset Reconstruction Company (EARC).

f) The term loans from Edelweiss Asset Reconstruction Company (EARC) are repayable by March 31, 2024 as per the repayment schedule provided by EARC. Interest is payable on Quarterly basis @ 9.00% (compounded quarterly).

g) Other debts of '' 3,386.75 lacs from Asset Reconstruction Company (EARC) has been converted into equity shares of 139.04 lacs which have been alloted to EARC on April 24, 2021.

h) Maturity profile of term loans from Edelweiss Asset Reconstruction Company (EARC) are as set out below:

24*| FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATION AND FAIR VALUE MEASUREMENTS

a) The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.

b) The following methods and assumptions were used to estimate the fair value:

1) Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

2) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rate and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

c) the company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:

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

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

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

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their levels in the fair value hierarchy :

Objectives and policies Risk management framework

The Company’s management has overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company conducts yearly risk assessment activities to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has a system in place to ensure risk identification and ongoing periodic risk assessment is carried out. The Board of directors periodically monitors the risk assessment.

The Company has exposure to the following risks arising from financial instruments :

- Credit risk

- Liquidity risk

- Market risk

- Interest risk

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The company generally doesn’t have collateral.

Trade receivables

Customer credit risk is managed as per Company’s established policy, procedures and control relating to customer credit risk management. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets..

Bank balances and deposits with banks

Credit risk from balances with banks is managed by the company’s finance department as per Company’s policy. Investment of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Board of directors. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price of a financial instrument. These include change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowing.

The company manages market risk through a risk management committee engaged in, inter alia, evaluation and identification of risk factors with the object of governing / mitigation them accordingly to company’s objectives and declared policies in specific context of impact thereof on various segments of financial instruments.

Currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which sales, purchase are denominated and the respective functional currencies of Company. The Company has export sales primarily denominated in US dollars.

28*| CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value.

Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

Developments during the current reporting year

Subsequent to the modification and restructuring the loans during the previous year (as summarised below), the Company has been regular in repayment of the interest and instalments due as per the restructured schedule.

Unwinding of discount and corresponding amortisation of deferred fair gain in the Statement of Profit and Loss for the year, in respect of the Balance debt, was '' 1,133.96 lacs. Accordingly, net impact of the above entries on the loss for the year was Nil.

Refer Note 12 for trust-wise carrying amounts of the aforesaid term loans and the carrying amount of the Balance debt as on March 31,2021.

In the month of April 2021, the Company has completed the allotment of equity shares having face value '' 10 each, on a fully diluted basis, to the lender trusts as per the terms of the restructuring agreement, as follows:

Summary of modification and restructuring of loans

During the previous year, as a result of the substantial modification in the terms of existing loans due to the restructuring package, the Company had de-recognised the existing loans and has recognised the new loans with revised terms with effect from April 01,2019. The difference between the carrying amounts of the existing loans and the new loans has been recognised in the profit and loss under the head ''exceptional items’. The terms of the restructuring package are summarised as follows:

Contingent liabilities above represent estimates made mainly for probable claims arising out of litigation and disputes pending with tax authorities. The probability and timing of outflow with regard to these matters depend on the final outcome of litigations / disputes. Hence the Company is not able to reasonably ascertain the timing of the outflow.

In addition to above, the Company is also subject to legal proceedings and claims which arise in the ordinary course of business. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liability, where applicable. The management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company’s operations or financial condition.

a) The company has taken certain office premises and warehouse under cancellable operating leases. In the rent agreements there are no terms for purchase option or any restriction such as those concerning dividend and additional debts. Lease agreements of the company do not contain any variable lease payment or any residual value guarantees. Information in respect of leases for which right-of-use assets and corresponding lease liabilities have been recognised are as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of '' 84.95 lacs (P.Y. '' 96.87 lacs) under defined contribution plan as employer''s contribution to Provident Fund.

Defined Benefit Plan

The Employees'' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method (PUCM), which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

a) During 2017-2018, the Company had entered into a One Time Settlement (OTS) with Bank of India at '' 9,500.00 lacs in full and final settlement of its dues payable over a period of three years. The Company has paid '' 3,000.00 lacs during the year ended March 31,2020 in compliance with the payment schedule of the OTS. Until the payment of last instalment, the Company continued to provide interest in books of accounts on the principal outstanding at original contracted rates. Consequent to the full and final payment to Bank of India, during 2019-20 the Company has written back '' 22,623.77 lacs being the difference between the OTS amounts paid and the total dues to Bank of India of '' 32,123.77 lacs, including interest accounted in books of accounts.

b) During 2019-20, Company entered into a One Time Settlement (OTS) with State Bank of India at '' 10,200.00 lacs in full and final settlement of its outstanding Working Capital dues of '' 29,727.26 lacs as per its books of accounts including interest at original contracted rates, pursuant to which the entire settlement amount has been paid before March 31,2020 in accordance with the terms and conditions of the OTS. Consequent to the full and final payment to State Bank of India,during 2019-20 the Company has written back '' 19,527.26 lacs being the difference between the OTS amounts paid and the total dues to State Bank of India including interest in books of accounts.

c) During 2019-20, the Company entered into a One Time Settlement (OTS) with IDBI Ltd. at '' 1,603.83 lacs in full and final settlement of its outstanding Working Capital dues of '' 4,971.15 lacs including interest at original contracted rates, pursuant to which the entire settlement amount has been paid before March 31,2020 in accordance with the terms and conditions of the OTS. Consequent to the full and final payments to IDBI Ltd., during 2019-20 the Company has written back '' 3,367.32 lacs being the difference between the OTS amounts paid and the total dues to IDBI Ltd. including interest in books of accounts.

Consequent to the full and final payments to the banks with respect to the above Compromise Settlements with the banks, during 2019-20 the Company has written back in aggregate '' 45,518.35 lacs being the difference between the OTS amounts paid and the total dues to the various banks including interest in books of accounts on the principal outstanding at original contracted rates.

The amounts written back of '' 45,518.35 lacs includes interest of '' 6,043.97 lacs pertaining to the period April 2019 to December 2019.

44. The Company had applied to the State Government authorities for dual feed permission for manufacture of ENA through molasses as well as grain at one of its ENA Plants. Permission has been received for operating the fermentation section till September 02, 2021. It is expected that permission for operating the distillation section also will be received soon. In view of this, the management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA Plant is not required to be estimated.

45. In lieu of advances given to certain body corporates amounting to '' 6,074.08 lacs, the Company had received land from their holding company. The land received has been registered in the name of the Company. The advances have not been adjusted against the dues to the said holding company pending completion of the merger formalities of the said body corporates with their holding company. In view of this, the management believes that no provision is considered necessary in the books of accounts.

46. The erosion of the net worth of the Company has been substantially recovered in the financial year 2019-20 and the negative networth stands at '' 5,236.78 lacs as at March 31, 2021. This is due to major reduction in debt resulting from compromise settlements with banks and entering into agreement, during the financial year 2019-20 with Edelweiss Asset Reconstruction Company Ltd. ("EARC") acting as Trustee on behalf of Trusts in favour of whom some of the lender banks and financial institution have assigned all the rights, title and interests in financial assistances granted by them to the Company with respect to restructuring of the debts owed to it by the Company. The compromise settlements and restructuring agreement have significantly reduced the debt burden and consequential finance cost thereon, the benefit whereof will continue to accrue in the years to come. The Company has initiated the process of cost reduction, changes in business strategy and rationalisation of manpower which will strengthen its financial position.

In spite of the country wide lockdown due to the global pandemic affecting the operations in the first two months of the financial year 2020-21, ever since the staggered resumption of operations, sales have started stabilising across the country with certain southern states showing substantial growth resulting in improved operational performance of the business in terms of sales, market share and margins.

The Board of Directors have assessed the above conditions and indicators and have come to the conclusion that no material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern taking into account the plans management has put in place and the other mitigating factors described above.

47. a) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming approximately '' 731.10

lacs towards refund of security deposit and other dues. The Hon’ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for the sum of approximately '' 1,193.00 lacs against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors. The Company has filed an application to club both the matters related to Anupama Wine Distributors and Anupama Distributors as the evidences are the same. This clubbing application has been allowed. b) A body corporate has filed a legal suit on the Company to obtain restraining order on the use of certain trademarks owned by the Company. An interim order was passed by the Bombay High Court upholding the ownership of the Company in the aforesaid trade marks and allowing the Company continuous and uninterrupted use of the said trademarks without any restraint.

48. The net worth of PunjabExpo Breweries Private Limited ("PunjabExpo"), a wholly owned subsidiary of the Company, has been eroded and has incurred net loss during the year. However, the Company is actively exploring the possibility of entering into northern markets where PunjabExpo will be one of the major sources of supply. It is also in talks with other brand owners to enter into bottling arrangements. This would significantly improve the capacity utilisation and have favourable impact on the profitability of PunjabExpo. Moreover, PunjabExpo is also in the process of rationalisation of its administrative overheads. In order to repose faith in PunjabExpo, the Company has subscribed to rights issue of 69,99,300 shares of '' 10 each of PunjabExpo in the month of April 2021, thereby further improving the net worth of PunjabExpo. The Board of Directors have assessed the above conditions and indicators and have come to the conclusion that no material uncertainty exists that may cast significant doubt on PunjabExpo’s ability to continue as a going concern taking into account the plans management has put in place and the other mitigating factors described above. Hence, the management believes that no provision for impairment in equity investment and loans and advances given is required..

49. The National Company Law Tribunal ("NCLT") has ordered for liquidation of Prag Distillery (P) Ltd. ("Prag"), wholly owned subsidiary of the Company, vide its order No. MA 309/2018 in CP1067/ 2017 dated July 26, 2018, as a going concern. A liquidator has been appointed to manage the affairs of Prag and complete the liquidation process. The Company has submitted a formal proposal to the two financial lenders for full and final settlement of all their claims. The settlement agreement with Standard Chartered Bank, one of the financial lender has been entered and a sum of USD 11,00,000/- has been paid to them. The agreement with DCB bank is yet to be entered. The impairment, if any, of the equity investment in Prag will be considered on completion of the liquidation process / final settlement as the case may be.

51*| IMPACT OF COVID-19:

The COVID-19 pandemic has brought economies, businesses and lives around the world to a standstill, and our country is no exception. Based on the directives and advisories issued by central and state governments and other relevant authorities during the lock down, our operations at factory / states was affected partially. Considering the unprecedented and ever evolving situation, the Company had made assessment of recoverability and carrying value of its assets comprising of tangible assets, inventories and other current assets as at March 31,2021 and made appropriate provisions. However, the impact assessment of COVID-19 is a continuous process, given the uncertainties associated with its nature and duration. The Company will continue to closely monitor any material changes to future economic conditions. The management has taken into account the impact of COVID-19 on the business for the foreseeable future and have concluded that the Company has sufficient resources to continue as a going concern.

52. Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2018

1 Reporting Entity

Tilaknagar Industries Ltd. (‘TI’ or ‘the ‘Company’) is a Company domiciled in India, with its registered office situated at PO Tilaknagar, Tal Shrirampur, Dist. Ahmednagar, Maharashtra - 413720. The Company has been incorporated under the provisions of Indian Companies Act and its equity is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The Company is primarily involved in manufacturing and sale of Indian Made Foreign Liquor (IMFL). The Company has a strong and diverse portfolio of brands in various liquor categories including brandy, whisky, vodka, gin, and rum.

2 Basis of preparation

a) Statement of compliance

These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The Company’s financial statements up to and for the year ended March 31, 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, Firsttime Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 26.

The financial statements were authorized for issue by the Company’s Board of Directors on June 14, 2018.

Details of the Company’s accounting policies are included in Note 3.

b) Functional and presentation currency

These financial statements are presented in Indian Rupees (‘), which is also the Company’s functional currency. All amounts have been rounded off to two decimal places to the nearest Lacs, unless otherwise indicated.

c) Basis of measurement

The financial statements have been prepared on the historical cost basis, except for certain financial assets and liabilities and defined benefit plan assets / liabilities measured at fair value.

d) Use of estimates and judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

1) Useful life of Property, plant and equipment.

2) Useful life of Intangible Assets

3) Employee benefit plans

4) Provisions and contingent liabilities

5) Lease classification

6) Income tax

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending March 31, 2018 is included in the following notes:

Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.

e) Measurement at fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

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

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

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

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

b) Terms / rights attached to equity shares

Each holder of equity share is entitled to one vote per share with a right to receive per share dividend by the Company, when declared. In the event of liquidation, the equity shareholders will be entitled to receive remaining assets of the Company after distribution of all preferential amounts in the proportion to the number of equity shares held by them.

a) The term loans are secured against first pari passu charge on all the fixed assets of the Company, both present and future excluding land and building on non plant area situated at Shrirampur, Dist. Ahmednagar and pari passu second charge on all current assets both present and future.

b) Foreign Currency term loans from banks carry interest @ Libor plus 3.45% . The loans are repayable in monthly / quarterly instalments each along with interest from the date of the loan.

c) Secured loans from banks outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

d) Loan taken from financial insitution is repayable in eighteen quarterly instalments after a moratorium of twenty one months from the commencement of the loan viz March 31, 2015. Interest is payable on monthly basis from the commencement of the loan and carry interest @ 13.05%.

e) Punjab National Bank, IFCI and Axis Bank Limited (only working capital) have assigned all the rights and interests in financial assistances granted to the Company in favour of Edelweiss Asset Reconstruction Company Limited (the “EARC”) acting in its capacity as Trustee of EARC Trust vide assignment agreement executed in favour of EARC of March 30, 2017. Pursuant to the above, EARC has become the secured lender and all the rights, title and interest of above Banks have vested in EARC in respect of the above financial assistances. The Company is in active discussion with EARC for debt restructuring.

f) The Company entered into a One Time Settlement (OTS) with Bank of India at Rs. 9,500 Lacs in full and final settlement of its outstanding amount of Rs. 21,226 Lacs. The Company has paid Rs. 3,500 Lacs before March 31, 2018 in compliance with the payment schedule of the OTS. The Company continues to provide interest in books of accounts on the principal outstanding at original contracted rates.

g) The Company has defaulted in repayment of principal dues of loans as well as interest payable to banks and financial institutions except for making certain on account payments to banks and Edelweiss Asset Reconstruction Company Limited. The Company is in active discussion with all the lenders for debt restructuring / one time settlement. However, interest has been provided in books of accounts on the principal outstanding at original contracted rates.

The defaults in repayment of loans to banks and financial institutions included in borrowings and current maturities of term loans are as under:

3 Financial Instruments - Accounting classification and fair value measurements

a) The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.

b) The following methods and assumptions were used to estimate the fair value:

1) Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilties, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

2) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rate and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

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

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

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

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

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their levels in the fair value hierarchy :

The Company has not disclosed the fair values for financial instruments such as investments, trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, borrowings, trade payables and financial liabilities because their carrying amounts are a reasonable approximation of fair value.

The Company has not disclosed the fair values for financial instruments such as investments, trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, borrowings, trade payables and financial liabilities because their carrying amounts are a reasonable approximation of fair value.

The Company has not disclosed the fair values for financial instruments such as investments, trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, borrowings, trade payables and financial liabilities because their carrying amounts are a reasonable approximation of fair value.

4 Financial risk management Objectives and policies Risk management framework

The Company’s management has overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company conducts yearly risk assessment activities to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has a system in place to ensure risk identification and ongoing periodic risk assessment is carried out. The Board of directors periodically monitors the risk assessment.

The Company has exposure to the following risks arising from financial instruments :

- Credit risk

- Liquidity risk

- Market risk

- Interest risk

a) Credit risk

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The Company generally doesn’t have collateral.

The carrying amounts of financial assets represent the maximum credit risk exposure. The maximum exposure to credit risk at the reporting date is as follows :-

Trade receivables

Customer credit risk is managed as per Company’s established policy, procedures and control relating to customer credit risk management. Credit risk has always been managed by the Company through credit approvals, estabilishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets.

Bank balances and deposits with bank

Credit risk from balances with banks is managed by the Company’s finance department as per Company’s policy. Investment of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Board of directors. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price of a financial instrument. These include change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowing.

The Company manages market risk through a risk management committee engaged in, inter alia, evaluation and identification of risk factors with the object of governing / mitigation them accordingly to Company’s objectives and declared policies in specific context of impact thereof on various segments of financial instruments.

Currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which sales, purchase are denominated and the respective functional currencies of Company. The Company has export sales primarily denominated in US dollars.

Exposure to currency risk

The Company’s exposure to currency risk as reported to the management is as follows:

A 1% increase in foreign exchange rates at the reporting date would have had equal but opposite effect on the amounts shown above, on the basis that all other variable remain constant.

d) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The entity’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments is as follows:

Cash flow sensitivity analysis for variable-rate instruments

An increase of 100 basis points in interest rates at the reporting date would have decreased gain as at year end by the amounts shown below. This analysis assumes that all other variables remain constant.

5 Explanation of transition to Ind AS

The Company has prepared its first financial statements in accordance with Ind AS. For the year ended March 31, 2016, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

The accounting policies set out in Note 3 have been applied in preparing the financial statements for the year ended March 31, 2018 including the comparative information for the year ended March 31, 2017 and the opening Ind AS balance sheet on the date of transition i.e. April 01, 2016.

In preparing its Ind AS balance sheet as at April 01, 2016 and in presenting the comparative information for the year ended March 31, 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cashflows.

There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

A) Exemptions availed

Ind AS 101 allows first time adopters certain mandatory and voluntary exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Property, plant and equipment and intangible assets

As per Ind AS 101 carrying values of all its property, plant and equipment and intangible assets as at the date of transition to Ind AS, measured as per previous GAAP have been treated as their deemed costs as at the date of transition.

b) Investment in subsidiaries and associates

As permitted by Ind AS 101, the Company has elected to carry all investments in subsidiaries and associates at cost less impairment as determined in accordance with Ind AS 27.

B) Principal adjustments

a) Sale of goods

Under Indian GAAP sale of products was presented as net of excise duty and differential excise duty on opening and closing stock of manufactured goods is adjusted from (Increase) / decrease in stock. However, under Ind AS, sale of goods includes excise duty and excise duty is separately presented on the face of statement of profit and loss.

b) Cash Discount

Under previous GAAP the discount given on sales for early payment was recognized as an expense in the statement of profit and loss. However as per Ind AS, if the discount is known at time of transfer of risk and reward then the same needs to be adjusted through revenue.

c) Income from tie up units

The Company has entered into arrangements with certain distilleries and bottling units (tie up units) for manufacture and marketing of its own brands. The tie up units have necessary license and regulatory permits to manufacture alcohol. Under the previous GAAP the Company had recognized net surplus (total revenue over total expenses) from the operation through these tie up units under Revenue from operations. However, under Ind AS 18, the Company has aggregated the below mentioned amounts in its Statement of Profit and Loss with respect to these tie up units. Consequent to these changes, there is no impact on the total profit. For details, refer Note 43.

d) Revaluation Reserve

Under Indian GAAP the Company had revalued property, plant and equipment and was carrying the revaluation reserve in the financial statements. During the transition to Ind AS, the Company has elected to transfer the revaluation reserve to retained earnings.

Notes to reconciliation

a) Processing fees

Under previous GAAP, transaction cost (processing fee) for borrowings taken for fixed asset were capitalized and amortized over useful life of the fixed asset. Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

b) Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP In addition, various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. The Company has recognized deferred tax assets on unabsorbed depreciation and business losses under income tax only to the extent there are deferred tax liabilities.

c) Expected Credit Loss

Under previous GAAP provision is made for all the trade receivables aged beyond three years and in case of trade receivables aged below three years, provision is made for cases like bankruptcy, terminated agents. Under Ind AS 109 , the Company is required to apply expected credit loss model for recognising the allowances for doubtful debts. The Company has applied the simplified approach as a practical expedient to measure expected credit losses on its portfolio of trade receivables.

d) Share based payment

Under the previous GAAP the cost of equity settled employee share based plan were recognized using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognized based on the fair value of the options as at the grant date. There is no impact on total equity.

e) Remeasurements of post employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in Other Comprehensive Income instead of profit or loss. Under the previous GAAP these remeasurements were forming part of the profit or loss for the year.

6 Capital Management

For the purpose of the Group’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Group. The primary objective of the Group when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.

Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Group allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

The Group monitors capital based on the following ratio :-

7 Estimated amount of contracts remaining to be executed on capital accounts and not provided for is Rs. Nil (P.Y. Rs. Nil).

8 Operating Lease:

a) The Company has taken bottling units under cancellable operating lease at various locations and during the financial year Rs. Nil (P.Y. Rs. 22.00 Lacs ) paid towards lease rentals has been charged to Statement of Profit and Loss.

b) The Company has taken various residential / commercial premises under cancellable operating lease. Lease rental expenses included in the Statement of Profit and Loss for the financial year is Rs. 105.57 Lacs (P.Y. Rs. 216.14 Lacs).

c) Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

d) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

9 The disclosure of Ind AS 19 “Employee Benefits” is as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of Rs. 94.57 Lacs (P.Y. Rs. 142.01 Lacs ) under defined contribution plan as employer’s contribution to Provident Fund.

Defined Benefit Plan

The Employees’ gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

10 Employee Stock Option Scheme

a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010 respectively and also approved Employee Stock Option Scheme (ESOP) 2012 on May 24, 2012 by way of Postal Ballot.

b) During the financial year ended March 31, 2018, the following schemes were in operation :

11 Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

**Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognized as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above.

12 In accordance with proviso to Section 129(3) read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company’s subsidiaries in Form AOC-1 is attached to the financial statements of the Company.

13 Provision of excise duty on finished goods manufactured but yet to be cleared from the factory as at March 31, 2018 estimated at Rs. 402.18 Lacs (P.Y. Rs. 205.48 Lacs) has been provided in the books and also been considered in valuation of closing stock of finished goods. Provision for excise duty on finished goods charged in the Statement of Profit and Loss for the financial year is as follows:

14 There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

15 Micro, Small and Medium enterprises have been identified by the Company on the basis of the information available. Total outstanding dues of Micro and Small enterprises, which are outstanding for more than the stipulated period are given below :

16 The Company has entered into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes. The foreign currency exposure not hedged as at March 31, 2018 are as under:

17 The Company has entered into arrangements with certain distilleries and bottling units (tie up units) for manufacture and marketing of its own brands. The tie up units have necessary license and regulatory permits to manufacture alcohol. Under the previous GAAP the Company had recognized net surplus (total revenue over total expenses) from the operation through these tie up units under Revenue from operations. However, under Ind AS 18, the Company has aggregated the below mentioned amounts in its Statement of Profit and Loss with respect to these tie up units. Consequent to these changes, there is no impact on the total profit.

18 The Company entered into a One Time Settlement (OTS) with Bank of India at Rs. 9,500 Lacs in full and final settlement of its outstanding amount of Rs. 21,226 Lacs. The Company has paid Rs. 3,500 Lacs before March 31, 2018 in compliance with the payment schedule of the OTS. The Company continues to provide interest in books of accounts on the principal outstanding at original contracted rates.

19 The Company had applied to the State government authorities for dual feed permission for manufacture of ENA through molasses as well as grain at one of its ENA Plants. Permission has been received for operating the fermentation section for one year. It is expected that permission for operating the distillation section also will be received soon. In view of this the management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA Plant is not required to be estimated.

20 In lieu of advances given to certain parties amounting to Rs. 6,074.08 Lacs, the Company had received land from one of the group concerns of the parties. The land received has been registered in the name of the Company. The advances have not been adjusted pending certain formalities to be completed on the part of the said parties. In view of this, the management believes that no provision is considered necessary in the books of accounts.

21 Other operating income for the year ended March 31, 2018 includes Rs. 4,737.47 Lacs (P.Y. Rs. Nil) on account of entitlement of MVAT and CST refund).

22 The Company entered into a One Time Settlement (OTS) with Axis Bank Ltd at Rs. 2,500 Lacs in full and final settlement of its outstanding External Commercial Borrowing (ECB) of Rs. 5,276.43 Lacs pursuant to which the entire settlement amount has been paid before March 31, 2018 in accordance with the terms and conditions of the OTS. Hence, the Company has written back Rs. 2,776.43 Lacs in Other Income.

23 Other significant notes

a) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs. 731.10 Lacs towards refund of security deposit and other dues. The Hon’ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs. 1,193.00 Lacs against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors. The Company has filed a transfer petition to club both the matters related to Anupama Wine Distributors and Anupama Distributors as the evidences are the same.

b) A body corporate has filed a legal suit on the Company to obtain restraining order on the use of certain trademarks owned by the Company. An interim order was passed by the Bombay High Court upholding the ownership of the Company in the aforesaid trade marks and allowing the Company continuous and uninterrupted use of the said trademarks without any restraint.

24 Prag Distillery, wholly owned subsidiary of the Company had been referred to National Company Law Tribunal (“NCLT”) for Corporate Insolvency Resolution Process (CIRP) under the provisions of the Insolvency and Bankruptcy Code, 2016(“the Code”) and accordingly a Resolution Professional (RP) was appointed. An application for liquidation under Section 33 of the Insolvency & Bankruptcy Code, 2016 has been filed by the Resolution Professional (RP) before The National Company Law Tribunal, Mumbai Bench seeking order requiring Prag Distillery (P) Ltd., to be liquidated “on going concern basis” in the manner laid down under Section 33 of the Code on April 06, 2018. However, a resolution proposal has since been submitted by a third party for approval of the creditors subject to the directions/orders to be given by The National Company Law Tribunal, Mumbai Bench. In view of this, the management believes that no impairment for the diminution in the value of investments in Prag Distillery (P) Ltd. is required pending the completion of the resolution process under the IBC code.

25 Disclosure required under Section 186 (4) of the Company’s Act, 2013 for advances and guarantees :

26 The Company’s net worth has eroded. However, there is an improvement in operational performance of the liquor business in terms of higher sales, market share and margins in the southern states. The Company is also in active discussion with the lenders on debt restructuring. Hence, the accounts are prepared on going concern basis.

27 Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

28 The standalone financial statements of the Company for the year ended March 31, 2017 and the transition date opening Balance Sheet as at April 01, 2016 were audited by another firm of Chartered Accountants.

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Mar 31, 2016

1) Impairment of Assets :

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors.

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the Statement of Profit and Loss and the carrying amount of the said asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

2) Investments :

a) Long Term Investments are valued at cost. Provision for diminution in value is made only if in the opinion of management such a decline is other than temporary.

b) Current Investments are valued at cost / fair value whichever is lower.

3) Foreign Currency Transactions :

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. Exchange rate difference arising on the settlement of foreign currency transactions are recognized in the Statement of Profit and Loss. Foreign currency denominated monetary items as at the Balance Sheet date are translated at the rate prevailing on the date of Balance Sheet and the resultant exchange difference is recognized in the Statement of Profit and Loss.

4) Provisions and Contingencies :

Provision is recognized when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure on contingent liability is made when there is a possible obligation or present obligation that probably will not require an outflow of resources or where reliable estimate of the amount of the obligation cannot be made. However contingent assets are neither provided for nor disclosed.

5) Government Incentives :

The Company is entitled to various incentives from state government authorities in respect of its manufacturing unit. The Company accounts for its entitlement as income on accrual basis.

6) Borrowing Cost:

Borrowing costs attributed to the acquisition of fixed assets are capitalized as a part of the cost of asset up to the date the asset is put to use. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which these are incurred.

7) Employee Benefits:

a) Defined Contribution Plan:

Employee benefits in the form of contribution to Provident Fund managed by Government Authorities, Employees State Insurance Corporation and Labour Welfare Fund are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. The same is charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.

b) Defined Benefit Plan:

Retirement benefits in the form of gratuity are considered as defined benefit obligations and are provided at the present value of the amounts payable as on that date of the Balance Sheet, determined by using actuarial valuation techniques. Actuarial gains / losses, if any, are recognized in the Statement of Profit and Loss.

8) Employee Stock Compensation Cost:

The Company measures compensation cost relating to employee stock option using the ''intrinsic value method'' Compensation cost for stock option represent the excess of the market price over the exercise price of the shares granted under "Employee Stock Option Scheme" is amortized in accordance with guidelines issued by Securities and Exchange Board of India (SEBI), in this regard.

9) Taxation:

a) Provision for Income Tax is determined on the basis of the estimated taxable income and amount expected to be paid to the tax authorities in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred Tax is recognized in respect of deferred tax assets (subject to the consideration of prudence) and to the extent there is virtual certainty that the asset will be realized in future and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in subsequent years.

10) Earnings Per Share:

Basic Earnings Per Share are calculated by dividing the net profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating the diluted earnings per share the net profit for the year attributable to equity share holders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

11) Lease Accounting :

Leasing of assets whereby the lessor essentially remains the owner of the asset are classified as operating leases.

The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. Any compensation, according to agreement, that the lessee is obliged to pay to the lessor if the leasing contract is terminated prematurely is expensed during the period in which the contract is terminated.

12) Cash and Cash Equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

iii) Operating Lease:

a) The Company has taken bottling units under cancellable operating lease at various locations and during the financial year Rs. 4.30 million (P.Y. Rs. 15.25 million) paid towards lease rentals has been charged to Statement of Profit and Loss.

b) The Company has taken various residential / commercial premises under cancellable operating lease. Lease rental expenses included in the Statement of Profit and Loss for the financial year is Rs. 20.91 million (P.Y.Rs.15.39 million).

c) Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

d) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

iv) The disclosure of Accounting Standard 15 "Employee Benefits" is as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of Rs.15.40 million (P.Y. Rs. 24.99 million) under defined contribution plan as employer''s contribution to Provident Fund.

13) The Company had applied to the state government authorities for dual feed permission for manufacture of ENA through molasses as well as grain at one of its unit and permission is expected soon. In view of this, the management believes that there is no impairment in value of its unit and hence the recoverable amount of the unit is not required to be estimated.

14) Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by the Department in the month of March 2013, the Company had filed an application before the Income Tax Settlement Commission for Assessment Years 2012-13 and 2013-14. During the financial year, the Settlement Commission has passed the order directing the Assessing Officer to recomputed the tax liability based on its findings. The Company is awaiting the order from the Assessing Officer for the recomputed income tax liability. The estimated Income Tax liability arising thereof had been provided for in the accounts for the year ended March 31, 2014.

15) Other operating income for the year ended March 31, 2016 includes Rs. 258.92 million on account of entitlement of MVAT and CST refund as compared to Rs. 1,152.90 million included in the year ended March 31, 2015. The Company is awaiting disbursement of Rs. 1,269.11 million of MVAT and CST refund for the year 2012-13 onwards.

16) Other significant notes

a) The Company''s glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd. (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to Rs. 76.20 million. As on date, the Honourable Court has ordered for dismissal of the Company''s suit on the grounds on non-joinder of RGCPL as a party to the said suit.

b) The Company''s distributor Ding Dong Liquors had filed a suit pursuant to the Division Bench order of Bombay High Court for recovery of '' 41.20 million after their termination. The Company had filed a suit for recovery of Rs. 39.00 million for the sales proceeds not remitted by Ding Dong Liquors and also towards amount charges wrongly claimed by them. The Company entered into a settlement with Ding Dong vide an agreement dated October 12, 2015 pursuant to which Rs. 11.53 million was remitted to the Company from the deposit made with the Court.

c) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs. 73.11 million towards refund of security deposit and other dues. The Hon''ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs. 119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors. The Company has filed a transfer petition to club both the matters related to Anupama Wine Distributors and Anupama Distributors as the evidences are the same.

d) The Company had filed a winding up petition against its bottler and manufacturer Rhizome Distilleries Pvt. Ltd., Hyderabad at Hyderabad High Court for the recovery of its pending dues of Rs. 69.00 million against the sales proceeds received by them against Company''s products which they have failed to provide to the Company and Rs. 9.00 million towards Earnest Money Deposit. The Company had also filed a separate civil suit against Rhizome Distilleries Pvt. Ltd. for the recovery. The complaints against the Rhizome Distillery Pvt. Ltd.''s directors under section 138 of Negotiable Instruments Act had also been filed regarding the bouncing of cheques which they had provided against our sales proceeds. The Company has entered into a settlement proposal with Rhizome Distilleries Pvt Ltd. on February 24, 2016 under which Rhizome has agreed to make a full and final payment of Rs. 20.00 million and provide the Company with all the pending C Forms. Accordingly, the Company has transferred the balance irrecoverable amount of Rs. 58.00 million to Bad Debts.

e) A body corporate has filed a legal suit on the Company to obtain restraining order on the use of certain trademarks owned by the Company. An interim order was passed by the Bombay High Court upholding the ownership of the Company in the aforesaid trademarks and allowing the Company continuous and uninterrupted use of the said trademarks without any restraint.

17) Consequent to the financial difficulties faced by the major tie up unit of the Company in Tamilnadu, the Company has temporarily suspended its operations from the said tie up unit in Tamilnadu resulting in drop in sales turnover and adversely affecting the profitability. The Company is negotiating various options including third party equity participation and / or filing a legal suit for recovery and is confident that the major tie up unit shall commence its operations in the near future and that it will be able to recover its legitimate dues. The Company has outstanding advances in the normal course of business amounting to Rs. 463.00 million from all the tie up units of Tamilnadu. In view of the above facts, the advances have been considered good and recoverable and hence no provision is considered necessary in the books of accounts.

18) Disclosure required under Section 186 (4) of the Company''s Act, 2013 for loans and advances and guarantees :

19) The group has made a provision for diminution for value of investments in the associate Company Mason & Summers Marketing Services Pvt. Ltd. (MSMSPL) of Rs. 16.90 million due to losses made by the associate.

20) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2015

I) Estimated amount of contracts remaining to be executed on capital accounts and not provided for is Rs. 50 million (net of advances) (P.Y. Rs. 200 million )

ii) Operating Lease:

a) The Company has taken bottling units under cancellable operating lease at various locations and during the financial year Rs. 15.25 million (P.Y. Rs. 14.08 million) paid towards lease rentals has been charged to Statement of Profit and Loss.

b) The Company has taken various residential / commercial premises under cancellable operating lease. Lease rental expenses included in the Statement of Profit and Loss for the financial year is Rs. 15.39 million (P.Y. Rs. 15.29 million).

c) Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

d) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

iii) The disclosure of Accounting Standard 15 "Employee Benefits" is as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of Rs. 24.99 million (P.Y. Rs. 24.38 million) under defined contribution plan as employer's contribution to Provident Fund.

Defined Benefit Plan

The Employees gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

iv) Employee Stock Option Scheme

a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010 respectively and also approved Employee Stock Option Scheme (ESOP) 2012 on May 24, 2012 by way of Postal Ballot.

v) Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

vi) Depreciation note

a) During the current year, the Company has revised its accounting policy in respect of depreciation method of its fixed assets where depreciation was provided in the previous years under the 'written down value method'. Based on an evaluation carried out by the management in the current year, fixed assets are now being depreciated on 'straight line method' over the expected useful life of the fixed assets as against written down value method. This change in accounting policy has been made as it would result in a more appropriate presentation of the financial statements. As a result of this change, depreciation has been calculated retrospectively on straight line method and accordingly the Company has recorded reversal of depreciation expense amounting to Rs. 58.75 million pertaining to previous years in the current year's Statement of Profit and Loss.

b) Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), after retaining the residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs. 38.65 million (Net of tax Rs. 19.90 million) against the Statement of Profit and Loss.

c) The depreciation expense in the Statement of Profit and Loss for the year is lower by Rs. 49.84 million consequent to the above change in the method of depreciation and is higher by Rs. 39.79 million due to change in estimates.

vii) Provision of excise duty on finished goods manufactured but yet to be cleared from the factory as at March 31, 2015 estimated at Rs. 35.26 million (P.Y. Rs. 38.67 million) has been provided in the books and also been considered in valuation of closing stock of finished goods. Provision for excise duty on finished goods charged in the Statement of Profit and Loss for the financial year is as follows:

viii) There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

ix) Micro, Small and Medium enterprises has been identified by the Company on the basis of the information available. Total outstanding dues of Micro and Small enterprises, which are outstanding for more than the stipulated period are given below:

Consequent to the losses during the current year in the Company, remuneration paid to the Managerial Personnel and Directors is in excess of the limit prescribed under Companies Act, 2013 by Rs. 40.51 million. The said amount is subject to approval from Central Government and therefore the amount paid is held in trust by the concerned managerial personnel and disclosed as a receivable.

x) The Company prefers to use dual feed technology and has applied accordingly for permission to run this technology on one of its plants and the same is awaited.

xi) Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by the Department in the month of March 2013, the Company has fled an application before the Income Tax Settlement Commission for Assessment Years 2012-13 and 2013-14 which has been admitted for further hearings. The Income Tax liability arising thereof had been provided for in the accounts for the year ended March 31, 2014. The hearings are under process.

xii) Other operating income for the year ended March 31, 2015 includes Rs. 1,152.90 million on account of entitlement of MVAT and CST refund (for the year 2013-14 and 2014-15) as compared to Rs. 123.76 million included in the year ended March 31, 2014 (for the year 2012-13). The Company is awaiting disbursement of the sanctioned amount of Rs. 107.79 million for the year 2012-13.

xiii) Other significant notes

a) The Company's glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd. (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to Rs. 76.20 million. As on date, the Honourable Court has orally pronounced the order for dismissal of our suit on the grounds on non-joiner of RGCPL as a party to the said suit. The Company will file an appeal to the said order after receiving the detailed copy of the order from the Court.

b) The Company's distributor Ding Dong Liquors has fled a suit pursuant to the Division Bench order of Bombay High Court for recovery of Rs. 41.20 million after their termination. They have fled Notice of Motion for interim relief in the suit for withdrawing and / or transferring Security Deposit. The Hon'ble Bombay High Court has agreed with the Company's contention of the issue of limitation and has accordingly framed limitation as the main issue. The matter is posted for hearing for leading evidence of plaintiff on the limitation issue.

The Company has fled a suit for recovery of Rs. 39.00 million for the sales proceeds not remitted by Ding Dong Liquors and also towards amount charges wrongly claimed by them. Defendants did not file written statement and the suit was directed as undefended. Thereafter, the Defendants fled a Notice of Motion for condoning the delay in fling written statement. The Honourable Court has allowed the notice of motion.

c) Anupama Wine Distributors has fled a suit before the City Civil Court, Bangalore claiming Rs. 73.11 million towards refund of security deposit and other dues. The Hon'ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has fled a counter claim for Rs. 119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for fling evidence by Anupama Wine Distributors. The Company has fled a transfer petition to club both the matters related to Anupama Wine Distributors and Anupama Distributors as the evidences are the same.

d) The Company has fled a winding up petition against its bottler and manufacturer Rhizome Distilleries Pvt. Ltd., Hyderabad at Hyderabad High Court for the recovery of its pending dues of Rs. 69.00 million against the sales proceeds received by them against Company's products which they have failed to provide to the Company. The High Court, Hyderbad have passed an order restraining Rhizome Distilleries Pvt. Ltd. from alienating its assets and now the matter is placed for final orders. The Company has also fled a separate civil suit against Rhizome Distilleries Pvt. Ltd. for the recovery. The complaints against the Rhizome Distillery Pvt. Ltd.'s directors under section 138 of Negotiable Instruments Act has also been fled regarding the bouncing of cheques which they had provided against our sales proceeds.

e) A body corporate has fled a legal suit on the Company to obtain restraining order on the use of certain trademarks owned by the Company. An interim order was passed by the Bombay High Court upholding the ownership of the Company in the aforesaid trade marks and allowing the Company continuous and uninterrupted use of the said trademarks without any restraint.

xiv) Consequent to the financial difficulties faced by the principal bottler of the Company in Tamilnadu, the Company was constrained to discontinue its operations from the said bottler in Tamilnadu resulting in considerable drop in sales turnover and adversely affecting the profitability. In order to protect its financial interests from the bottler, the Company negotiated with the bottler and agreed to absorb certain conversion and miscellaneous costs on the condition that the overdues shall be repaid within an agreed and stipulated period. However, the principal bottler has failed to repay the said overdues. The Company is exploring various options including third party equity participation and / or fling a legal suit for recovery and is confident that the principal bottler shall commence its operations in the near future and that it will be able to recover its legitimate dues. The Company has estimated an amount of Rs. 463.00 million receivable on account of outstanding dues from all the bottling units of Tamilnadu which has been considered good and recoverable and hence no provision is made in the books of accounts.

xv) In accordance with proviso to Section 129 (3) read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company.

xvi) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2014

1. SHARE CAPITAL

a) Terms / rights attached to equity shares

Each holder of equity share is entitled to one vote per share with a right to receive per share dividend by the Company, when declared. In the event of liquidation, the equity shareholders will be entitled to receive remaining assets of the Company after distribution of all preferential amounts in the proportion to the number of equity shares held by them.

2. Other Notes to on Accounts

i) Contingent Liability not provided for:

(Rs. in million)

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

a)Corporate guarantees issued to banks 330.55 686.10 on behalf of subsidiary Company

b)Bank guarantees issued on behalf of 150.75 159.40 the Company

c)In respect of disputed Income tax matters, pending before the appropriate Income tax authorities, contested by the Company

A.Y. 2011-2012 253.83 -

A.Y. 2010-2011 1.90 1.90

A.Y. 2009-2010 6.13 6.13

A.Y. 2007-2008 86.07 86.07

d) In respect of disputed Sales tax matters, pending before the appropriate tax authorities, contested by the Company

F.Y. 2008-2009 (TOT- Kerala) 0.11 0.11

F.Y. 2008-2009 (VAT- Kerala) 0.22 0.22

F.Y. 2007-2008 (TOT- Kerala) 0.11 0.11

F.Y. 2007-2008 (VAT- Kerala) 0.55 0.55

F.Y. 2006-2007 (Central Sales Tax) 79.94 -

F.Y. 2004-2005 (Bombay Sales Tax) 4.67 4.67

F.Y. 2004-2005 (Central Sales Tax) 2.03 2.03

F.Y. 2003-2004 (Bombay Sales Tax) 6.28 6.28

F.Y. 2003-2004 (Central Sales Tax) 4.83 4.83

ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for is Rs. 200 million (net of advances) (P.Y. Rs. 250 million).

iii) Operating Lease:

a) The Company has taken Bottling units under cancellable operating lease at various locations and during the financial year Rs. 14.08 million (P.Y. Rs. 28.51 million) paid towards lease rentals has been charged to Statement of Profit and Loss.

b) The Company has taken various residential / commercial premises under cancellable operating lease. Lease rental expenses included in the Statement of Profit and Loss for the financial year is Rs. 15.29 million (P.Y. Rs. 14.90 million).

c) Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

d) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

iv) The disclosure of Accounting Standard 15 "Employee Benefits" is as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of Rs. 24.38 million (P.Y. Rs. 22.07 million) under defined contribution plan as employer's contribution to Provident Fund.

Defined Benefit Plan

The Employees' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

v) Employee Stock Option Scheme

a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010 respectively and also approved Employee Stock Option Scheme (ESOP) 2012 on May 24, 2012 by way of Postal Ballot.

b) The weighted average fair value of stock options granted during the financial year was Rs. 50.74 million (P.Y. Rs. 101.83 million). The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

vi) Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

vii) Related Party Disclosures:

The disclosures pertaining to the related parties as required by the Accounting Standard 18 "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, as applicable, are as under:

a) List of subsidiary companies : Prag Distillery (P) Ltd.

: Vahni Distilleries Private Limited

: Kesarval Springs Distillers Pvt. Ltd.

: Punjab Expo Breweries Private Limited

: Mykingdom Ventures Pvt. Ltd.

: P. P. Caps Private Limited

: Studd Projects P. Ltd.

: Srirampur Grains Private Limited

: Shivprabha Sugars Ltd.

b) Key Managerial Personnel : Mr. Amit Dahanukar

: Mrs. Shivani Amit Dahanukar

c) Company in which Key : M.L. Dahanukar & Co. Pvt. Ltd. Managerial Personnel has substantial interest : Arunoday Investments Pvt. Ltd.

: Maharashtra Sugar Mills Pvt. Ltd.

: Smt. Malati Dahanukar Trust

d) Relative of Key Managerial : Dr. Priyadarshini A. Dahanukar Personnel

viii) Provision of excise duty on finished goods manufactured but yet be cleared from the factory as at March 31, 2014 estimated at Rs. 38.67 million (P.Y. Rs. 47.20 million) has been provided in the books and also been considered in valuation of closing stock of finished goods. Provision for excise duty on finished goods charged in the Statement of Profit and Loss for the financial year is as follows:

ix) There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

x) The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to Micro, Small and Medium Enterprises have not been made.

xi) During February 2014, the Company has acquired the Indian Made Foreign Liquor (IMFL) brands of IFB Agro Industries Ltd., Kolkata vide assignment in perpetuity.

xii) Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by the Department in the month of March 2013, the Company has filed an application before the Income Tax Settlement Commission for Assessment Years 2012-2013 and 2013-2014 which has been admitted for further hearings. The Income Tax liability arising thereof has been provided for in the accounts for the year ended March 31,2014.

xiii) Other operating income for the year ended March 31, 2014 includes Rs. 123.76 million on account of entitlement of MVAT and CST refund for the previous year 2012-2013 as compared to Rs. 109.84 million included in year ended March 31, 2013 for the year 2011-12 pursuant to the grant of Mega Project Status under Package Scheme of Incentives 2007 by the Government of Maharashtra vide its eligibility certificate dated April 11,2012.

xiv) Other significant notes

a) The Company's glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to Rs. 76.20 million.

b) The Company's distributor Ding Dong Liquors has filed a suit pursuant to the Division Bench order of Bombay High Court for recovery of ' 41.20 million after their termination. They have filed Notice of Motion for interim relief in the suit for withdrawing and / or transferring Security Deposit. The Hon'ble Bombay High Court has agreed with the Company's contention of the issue of limitation and has accordingly framed limitation as the main issue. The matter is posted for hearing for leading evidence of plaintiff on the limitation issue.

The Company has filed a suit for recovery of Rs. 39.00 million for the sales proceeds not remitted by Ding Dong Liquors and also towards amount charges wrongly claimed by them. Defendants did not file written statement and the suit was directed as undefended. Thereafter, the Defendants file a Notice of Motion for condoning the delay in filing written statement.

c) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs. 73.11 million towards refund of security deposit and other dues. The Hon'ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs. 119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore. The matter is posted for filing evidence by Anupama Wine Distributors.

d) The Company has filed a winding up petition against its bottler and manufacturer Rhizome Distilleries Pvt. Ltd., Hyderabad at Hyderabad High Court for the recovery of its pending dues of Rs. 69.00 million against the sales proceeds received by them against Company's products which they have failed to provide to the Company. The High Court, Hyderbad have passed an order restraining Rhizome Distilleries Pvt. Ltd. from alienating its assets and now the matter is placed for final orders. The Company has also filed a separate civil suit against Rhizome Distilleries Pvt. Ltd. for the recovery. The complaints against the Rhizome Distillery Pvt. Ltd.'s directors under section 138 of Negotiable Instruments Act has also been filed regarding the bouncing of cheques which they had provided against our sales proceeds.

xv) The Ministry of Corporate affairs, Government of India, vide General Circular No 2 and 3 dated February 08, 2011 and February 21, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

xvi) During the year the Company has sold the entire stake in its wholly owned subsidiary P. P. Caps Private Limited.

xvii) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2013

I) Estimated amount of contracts remaining to be executed on capital accounts and not provided for is approx Rs.250 million (net of advances) (P.Y. Rs.40 million).

ii) Operating Lease:

a) The Company has taken Bottling units under cancellable operating lease at various locations and during the financial year T28.51 million (P.Y. T22.50 million) paid towards lease rentals has been charged to Statement of Profit and Loss.

b) The Company has taken various residential / commercial premises under cancellable operating lease. Lease rental expenses included in the Statement of Profit and Loss for the financial year is T14.90 million (P.Y. T23.25 million).

c) Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

d) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

iii) The disclosure of Accounting Standard 15 "Employee Benefits" is as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of T22.07 million (P.Y. T19.14 million) under defined contribution plan as employer''s contribution to Provident Fund.

Defined Benefit Plan

The Employees'' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

iv) Employee Stock Option Scheme

a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010 respectively and also approved Employee Stock Option Scheme (ESOP) 2012 on May 24, 2012 by way of Postal Ballot.

b) During the financial year ended March 31, 2013, the following schemes were in operation :

v) Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

vi) Related Party Disclosures:

The disclosures pertaining to the related parties as required by the Accounting Standard 18 "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, as applicable, are as under:

a) List of Subsidiary Companies Prag Distillery (P) Ltd.

Vahni Distilleries Private Limited

Kesarval Springs Distillers Pvt. Ltd.

Punjab Expo Breweries Private Limited

Mykingdom Ventures Pvt. Ltd.

P.P. Caps Private Limited

Studd Projects P. Ltd.

Srirampur Grains Private Limited

Shivprabha Sugars Ltd.

b) Key Managerial Personnel Mr. Amit Dahanukar

Mrs. Shivani Amit Dahanukar

c) Company in which Key Managerial M.L. Dahanukar and Co. Pvt. Ltd.

Personnel has substantial interest Arunoday Investments Pvt. Ltd.

d) Relative of Key Managerial Personnel Dr. Priyadarshini A. Dahanukar

vii) Provision of excise duty on finished goods manufactured but yet to be cleared from the factory as at March 31, 2013 estimated atRs.47.20 million (P.Y. T92.05 million) has been provided in the books and also been considered in valuation of closing stock of finished goods. Provision for excise duty on finished goods charged in the Statement of Profit and Loss for the financial year is as follows:

viii) There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

ix) The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to Micro, Small and Medium Enterprises have not been made.

x) The Company has not entered into any forward exchange contracts to hedge against its foreign Currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes. The foreign currency exposure not hedged as at March 31, 2013 are as under:

xi)During October 2012, the Company has acquired 26% stake in Mason & Summers Marketing Services Pvt Ltd (MSMSPL), a Company engaged in the business of sales, marketing and distribution of branded products of IMFL.

xii) During the financial year, the Income tax department conducted survey on the Company. The Company is in the process of submitting all the necessary documents and replies to the Income Tax Department. The Company has not received any notice of demand in consequence of the survey till the date of signing of the financial statements.

xiii) The Company has been granted Mega Project status for its new facilities at Shrirampur Factory under Package Scheme of Incentives (PSI) 2007 by the Government of Maharashtra. With its mega project status, the Company is entitled to monetary benefits which includes Industrial Promotional Subsidy in the form of refunds equivalent to 100% of eligible investment of Rs.2,546.21 million or to the extent of taxes payable under Maharashtra Value Added Tax Act, 2002 and Central Sales Tax Act, 1956 in respect of sale of finished goods eligible for incentives after adjustment of set off or other credit available within a period of seven years whichever is lower.Other operating income for the year includes Rs.109.84 million on account of entitlement of MVAT and CST refund for the previous year 201 1 -2012.

xiv) Other significant notes

a) The Company''s glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to T76.20 million.

b) The Company''s distributor Ding Dong Liquors has filed a winding up petition on the Company in the High Court of Judicature of Bombay for recovery of Security Deposit of T25.00 million. The Company withheld the Security Deposit on the grounds that Ding Dong Liquors had failed to deliver the ''C'' Forms and other amounts due to the Company. The Hon''ble High Court vide its Order directed the Company to deposit a sum of Rs.12.70 million out of the total amount claimed by Ding Dong Liquors. The Company has deposited the above sum with the Court and filed an appeal against the said Order.

Further, the Company has filed a separate suit for recovery of dues of T39.00 million and C-forms against Ding Dong Liquors which has been upheld by the Bombay High court by dismissing the winding up petition and directed Ding Dong Liquors to avail remedy from the Hon''ble Court for recovery of the amount failing which the Company will be entitled to an amount of Rs.12.70 million deposited with the Court.Ding Dong has filed a seperate suit claiming recovery but have failed to get the transfer of the deposited amount in that suit inspite of praying for the same.

c) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs.73.11 million towards refund of security deposit and other dues. The Hon''ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs.119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore.

d) Anupama Wine Distributors has filed a Company petition against the Company before Bombay High Court and against that the Hon''ble Bombay H igh Court has vide order dated March 16 , 2009 directed to the Company to Deposit a security worth Rs.42.10 million. The Company deposited a Bank Guarantee worth the said amount with the High Court, Mumbai and filed an appeal against the said Order which has been upheld the Hon''ble Bombay High Court by dismissing the winding up petition and allowed the Company to discharge the bank guarantee. The said order of Bombay High Court was challenged by Anupama Wine Distributors by filing a Special Leave Application at Hon''ble Supreme Court. The Hon''ble Supreme Court has rejected their Special Leave Application. Accordingly, Company has discharged the said bank guarantee.

e) The Company has filed a winding up petition against its bottler and manufacturer Rhizome Distilleries Pvt. Ltd., Hyderabad at Hyderabad High Court for the recovery of its pending dues of T69.00 million against the sales proceeds received by them against Company''s products which they have failed to provide to the Company. The High Court, Hyderbad have passed an order restraining Rhizome Distilleries Pvt. Ltd. from alienating its assets and now the matter is placed for final orders. The Company has also filed a seperate civil suit against Rhizome Distilleries Pvt. Ltd. for the recovery. The complaints against the Rhizome Distillery Pvt. Ltd.''s directors under section 138 of Negotiable Instruments Act has also been filed regarding the bouncing of cheques which they had provided against our sales proceeds.

xv)The Ministry of Corporate affairs, Government of India, vide General Circular No 2 and 3 dated February 08, 2011 and February 21, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

xvi) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2012

A) Terms / rights attached to equity shares

Each holder of equity share is entitled to one vote per share with a right to receive per share dividend by the Company, when declared. In the event of liquidation, the equity shareholders will be entitled to receive remaining assets of the Company after distribution of all preferential amounts in the proportion to the number of equity shares held by them.

(a) The term loans are secured against first charge on the land, building, plant & machinery of the Company situated at Shrirampur, Dist Ahmednagar and second charge on stock and debtors.

(b) Term loans from banks carry interest @ 14.25% to 15.50%. The loans are repayable in monthly / quarterly installments each along with interest from the date of the loan.

(c) The amounts of secured loans from banks outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

(Against hypothecation of stock of raw materials, work-in-progress, finished goods, stores, chemicals & book debts and second charge on the fixed assets of the Company situated at Shrirampur, Dist. Ahmednagar)

The amounts of secured loans from banks outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

The Company has entered into arrangements with certain distilleries and bottling units in other states for manufacturing and marketing of its own brands. The manufacture under the said arrangement, wherein each party's obligations are stipulated, is carried out under Company's close supervision. The marketing is entirely the responsibility of the Company. The Company is also required to ensure adequate finance to the distilleries, where required. Accordingly, it is considered appropriate to disclose the following quantitative and value information for the year, as applicable to such activities.

i) Contingent Liability not provided for (Rs. in million)

Particulars As at As at March 31,2012 March 31,2011

(a) Corporate guarantees issued to banks on behalf of Subsidiary Company 562.72 200.00

(b) Bank guarantees issued on behalf of the Company 135.58 43.92

(c) In respect of disputed Income tax matters, pending before the appropriate Income tax authorities, contested by the Company

For A.Y 2009-10 6.13 6.13

For A.Y. 2007-08 86.07 86.07

For A.Y. 2004-05 22.27 22.27

(d) In respect of disputed Sales tax matters, pending before the appropriate tax authorities, contested by the Company

For F.Y. 2003-04 (Bombay Sales Tax) 6.28 6.28

For F.Y. 2003-04 (Central Sales Tax) 4.83 4.83

For F.Y. 2004-05 (Bombay Sales Tax) 4.67 4.67

For F.Y. 2004-05 (Central Sales Tax) 2.03 2.03

(e) In respect of disputed service tax matter, pending before the appropriate Nil 2.02 Central Excise authorities, contested by the Company

ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for is approx Rs. 40 million (net of advances) (P.Y. Rs.55 million).

iii) Operating Lease:

The Company has taken Bottling units on operating lease at various locations and during the financial year Rs. 22.50 million (P.Y. Rs. 3.61 million) paid towards lease rentals has been charged to Statement of Profit and Loss.

Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

iv) The disclosure of Accounting Standard 15 "Employee Benefits" is as follows:

Defined Contribution Plan

The Company has charged in the Statement of Profit and Loss during the financial year an amount of Rs. 19.14 million (P.Y. Rs. 11.99 million) under defined contribution plan as employer's contribution to Provident Fund.

Defined Benefit Plan

The Employees' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the manner as gratuity.

v) Employee Stock Option Scheme

(a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010.

(b) During the financial year ended March 31, 2012, the following schemes were in operation.

(d) The weighted average fair value of stock options granted during the financial year was Rs. 58.70 million (P.Y. Rs. 33.70 million). The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

vi) Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

vii) Provision of excise duty on finished goods manufactured but yet to be cleared from the factory as at March 31, 2012 estimated at Rs. 92.05 million (P.Y. Rs. 0.53 million) has been provided in the books and also been considered in valuation of closing stock of finished goods. Provision for excise duty on finished goods charged in the Statement of Profit and Loss for the financial year is as follows :

viii) There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

ix) The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to Micro, Small and Medium Enterprises have not been made.

x) Other Significant notes

(a) The Company's glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to Rs.76.20 million.

(b) The Company's distributor Ding Dong Liquors has filed a winding up petition on the Company in the High Court of Judicature of Bombay for recovery of Security Deposit of Rs.25 million. The Company withheld the Security Deposit on the grounds that Ding Dong Liquors had failed to deliver the 'C' Forms and other amounts due to the Company. The

Hon'ble High Court vide its Order directed the Company to deposit a sum of Rs.12.70 million out of the total amount claimed by Ding Dong Liquors. The Company has deposited the above sum with the Court and filed an appeal against the said Order.

Further, the Company has filed a separate suit for recovery of dues of Rs.39.00 million and C-forms against Ding Dong Liquors which has been upheld by the Bombay High court by dismissing the winding up petition and directed Ding Dong Liquors to avail remedy from the Hon'ble Court for recovery of the amount failing which the Company will be entitled to an amount of Rs. 12.70 million deposited with the Court.

(c) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs.73.11 million towards refund of security deposit and other dues. The Hon'ble Court vide its Order dated December 22, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs.119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore.

(d) Anupama Wine Distributors has filed a Company petition against the Company before Bombay High Court and against that the Hon'ble Bombay High Court has vide order dated March 16, 2009 directed to the Company to Deposit a security worth Rs.42.10 million. The Company deposited a Bank Guarantee worth the said amount with the High Court, Mumbai and filed an appeal against the said Order which has been upheld the Hon'ble Bombay High Court by dismissing the winding up petition and allowed the Company to discharge the bank guarantee. The said order of Bombay High Court was challenged by Anupama Wine Distributors by filing a Special Leave Application at Hon'ble Supreme Court. The Hon'ble Supreme Court has rejected their Special Leave Application. Accordingly, Company has discharged the said bank guarantee.

xi) During the year, the Company has allotted 4,284,236 equity shares to Promoters of the Company against conversion of warrants at a price of Rs. 73/- per equity share.

xii) During the year, the Company has acquired 100% stake in Mykingdom Ventures Pvt. Ltd., P. P. Caps Private Limited, Studd Projects P. Ltd., Srirampur Grains Private Limited and 90% stake in Shivprabha Sugars Ltd. on March 19, 2012 and these companies have become subsidiaries of the Company w.e.f March 19, 2012.

xiii) The Company has been granted Mega Project status for its new facilities at Shrirampur Factory under Package Scheme of Incentives (PSI) 2007 by the Government of Maharashtra. With its mega project status, the Company is entitled to monetary benefits which includes Industrial Promotional Subsidy in the form of refunds equivalent to 100% of eligible investment of Rs. 2,546.21 million or to the extent of taxes payable under Maharashtra Value Added Tax Act, 2002 and Central Sales Tax Act, 1956 in respect of sale of finished goods eligible for incentives after adjustment of set off or other credit available within a period of seven years whichever is lower.

xiv) The Ministry of Corporate affairs, Government of India, vide General Circular No 2 and 3 dated February 8, 2011 and February 21, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

xv) During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for the preparation of financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

xvi) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2011

(i) Contingent liability not provided for:

(Rs.in million)

As at As at March 31, March 31, 2011 2010

(a) Corporate guarantees issued to banks on behalf of Subsidiary Company 1,395.00 250.00

(b) Bank guarantees issued on behalf of the Company 43.92 51.77

(c) In respect of disputed Income tax matters, pending before the appropriate Income tax authorities, contested by the Company For A.Y. 2009-10 6.13 Nil

For A.Y. 2007-08 86.07 86.07

For A.Y. 2004-05 22.27 22.27

(d) In respect of disputed Sales tax matters, pending before the appropriate tax authorities, contested by the Company

For F.Y 2003-04 (Bombay Sales Tax) 6.28 Nil

For F.Y 2003-04 (Central Sales Tax) 4.83 Nil

For F.Y. 2004-05 (Bombay Sales Tax) 4.67 Nil

For F.Y. 2004-05 (Central Sales Tax) 2.03 Nil

(e) In respect of disputed Service Tax matter, pending before the appropriate 2.02 2.02 Central Excise authorities, contested by the Company

(f) Disputed matters under arbitration pending disposal Nil 20.14

(ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for is approx Rs. 55 million (net of advances) (P.Y. Rs. Nil)

(iv) Operating Lease:

The Company has taken Bottling units on operating lease at various locations and during the financial year Rs. 3.61million ( P. Y. Rs. 20.97 million) paid towards lease rentals has been charged to Profit and Loss Account.

Except for escalation clauses contained in certain lease arrangements providing for increase in the lease payment by a specified percentage / amounts after completion of specified period, the lease terms do not contain any exceptional / restrictive covenants other than the prior approval of the lessee before the renewal of lease.

There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is required for further leasing. There is no contingent rent payment.

(v) The disclosure of Accounting Standard 15 “Employee Benefits” is as follows:

Defined Contribution Plan

The Company has charged in the Profit and Loss Account during the financial year an amount of Rs. 11.99 million ( P. Y. Rs. 13.24 million) under defined contribution plan as employer's contribution to Provident Fund.

Defined Benefit Plan

The Employees' gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the manner as gratuity.

(vi) Employee Stock Option Scheme

(a) The Shareholders of the Company at the Annual General Meetings held on August 06, 2008 and September 20, 2010 had approved the Employee Stock Option Scheme (ESOP) 2008 and Employee Stock Option Scheme (ESOP) 2010.

(vii) Segment Reporting:

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

(viii) Related Party Disclosures:

The disclosures pertaining to the related parties as required by the Accounting Standard 18 “Related Party Disclosure” issued by the Institute of Chartered Accountants of India, as applicable, are as under:

(xiii) There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

(xiv) The amount of secured loans from banks outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

(xv) The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to Micro, Small and Medium Enterprises have not been made.

(xvii) Other Significant notes:

(a) The Company's glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd. (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to Rs. 76.2 million.

(b) The Company's distributor Ding Dong Liquors has filed a winding up petition on the Company in the High Court of Judicature of Bombay for recovery of Security Deposit of Rs. 25 million. The Company withheld the Security Deposit on the grounds that Ding Dong Liquors had failed to deliver the 'C' Forms and other amounts due to the Company. The Hon'ble High Court vide its Order directed the Company to deposit a sum of Rs. 12.70 million out of the total amount claimed by Ding Dong Liquors. The Company has deposited the above sum with the Court and filed an appeal against the said Order.

Further, the Company has filed a separate suit for recovery of dues of Rs. 39 million and C-forms against Ding Dong Liquors which has been upheld by the Bombay High court by dismissing the winding up petition and directed Ding Dong Liquors to avail remedy from the Hon'ble Court for recovery of the amount failing which the Company will be entitled to an amount of Rs. 12.70 million deposited with the Court.

(c) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs. 73.11 million towards refund of security deposit and other dues. The Hon'ble Court vide its Order dated 22.12.2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs. 119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore.

(d) Anupama Wine Distributor has filed a company petition against the Company before Bombay High Court and against that the Hon'ble Bombay High Court has vide order dated March 16, 2009 directed to the Company to Deposit a security worth Rs. 42.10 million. The Company has deposited a Bank Guarantee worth the said amount with the High Court, Mumbai and has filed an appeal against the said Order which has been upheld the Hon'ble Bombay High Court by dismissing the winding up petition and the Company will be entitled to discharge the Bank Guarantee after the time limit available to Anupama Wine Distributor if they fail to do so.

(e) An amount of Rs. 20.14 million disclosed under Deposits with Court as contingent liability has been charged of in terms of out of court settlement with Rairu Distilleries Limited by filing consent terms and included in finance charges.

(xviii) During the year, the Company has allotted 8.30 million warrants of Rs. 73/- each (Rs. 18.25 /- paid up) to the Promoter Groups which are convertible into one equity share at a price of Rs. 73/- per equity share and out of the said warrants, 4.02 million warrants have been converted into equity shares by the promoters and balance 4.28 million warrants is lying outstanding as on March 31, 2011.

(xix) During the year, the Company has acquired 100% stake in Kesarval Springs Distillers Pvt. Ltd. (KSDPL) and KSDPL has became a 100% subsidiary of the Company with effect from November 21, 2010.

(xx) Additional information pursuant to the provisions of paragraph 3, 4 (c) & (d) of part II of Schedule VI of Companies Act, 1956, is annexed hereto.

(xxi) The Ministry of Corporate affairs, Government of India, vide General Circular No 2 and 3 dated 08-02-2011 and 21-02-2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

(xxii) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.

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Mar 31, 2010

(i) Contingent liability not provided for

(Amount in Rs.)

As at As at

Particulars 31st March, 2010 31st March, 2009

(a) Corporate guarantees issued to banks on behalf of Subsidiary Company 250,000,000 Nil

( b) Bank guarantees issued on behalf of the Company 51,766,600 6,200,000

(c) In respect of disputed sales tax matter, pending before the sales tax tribunal, contested by the Company Nil 1,340,750

(d) In respect of disputed income tax matters, pending before the appropriate Income tax authorities, contested by the Company

For A.Y. 2007-08 86,069,844 Nil

For A.Y. 2004-05 22,267,678 Nil

For A.Y. 1992-93 Nil 1,000,000

(e) In respect of disputed service tax matter, pend ing before the appropriate Central 2,017,760 Nil

Excise authorities, contested by the Company

(f ) Disputed matter under arbitration pending disposal 20,137,685 20,137,685

(ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for is approx Rs. Nil (net of advances) (previous year Rs. 90 million)

(iv) Operating lease

The Company has taken Bottling units on operating lease at various locations and during the financial year Rs. 20.97 million paid towards lease rentals has been charged to Profit & Loss Account.

(v) The disclosure of Accounting standard 15 "Employee Benefits" is as follows

Defined Contribution Plan

The Company has charged in the Profit & Loss Account during the financial year an amount of Rs. 13.24 million under defined contribution plan as employers contribution to Provident Fund.

Defined Benefit Plan

The Employees gratuity fund scheme managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the manner as gratuity.

(vi) Segment Reporting

The Company is predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor and its related products which constitute a single business segment.

Note: The above amounts do not include contribution to Gratuity Fund, as separate amount is not available for Managing Director and Whole Time Directors.

(vii) There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years to be transferred to Investor Education & Protection Fund.

(viii) The amount of secured and unsecured loans from banks outstanding at the end of the financial year have been guaranteed by the personal guarantee of Chairman & Managing Director of the Company.

(ix) The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to Micro, Small and Medium Enterprises have not been made.

(x) Other Significant notes

(a) The Companys glass manufacturing unit was given to Ramnath Glass Containers Pvt. Ltd (RGCPL) managed by Mehta Brothers on lease for carrying out their business, which had discontinued the operations in the year 2003 and handed over the unit back to the Company in totally unworkable conditions without fulfilling their legal obligations under the agreement. Due to this the Company had to pay the statutory liabilities and settle the dues of the workmen on behalf of RGCPL / Mehta Brothers. The Company has initiated the legal action against the RGCPL / Mehta Brothers for recovery of amount paid together with interest and damages amounting to Rs. 76.2 million.

( b) The Companys distributor Ding Dong Liquors has filed a winding up petition on the Company in the high Court of Judicature of Bombay for recovery of Security Deposit of Rs. 25 million. The Company withheld the Security Deposit on the grounds that Ding Dong Liquors had failed to deliver the C forms and other amounts due to the Company. The honble high Court vide its Order directed the Company to deposit a sum of Rs. 12.70 million out of the total amount claimed by Ding Dong Liquors. The Company has deposited the above sum with the Court and filed an appeal against the said Order.

Further, the Company has filed a separate suit for recovery of dues of Rs. 39 million and ‘C forms against Ding Dong Liquors.

(c) Anupama Wine Distributors has filed a suit before the City Civil Court, Bangalore claiming Rs. 73.11 million towards refund of security deposit and other dues. The honble Court vide its Order dated 22nd December, 2007 dismissed their application for attachment of property for recovery of the above dues. The Company has filed a counter claim for Rs. 119.30 million against Anupama Wine Distributors and the matter is pending before City Civil Court, Bangalore.

(d) Anupama Wine Distributor has filed a Company petition against the Company before Bombay high Court and against that the honble Bombay high Court has vide Order dated 16th March, 2009 directed to the Company to Deposit a sum of Rs. 42.10 million. The Company has deposited a bank guarantee worth the said amount with the high Court, Mumbai and has filed an appeal against the said Order.

(xi) Additional information pursuant to the provisions of paragraph 3, 4 (c) & (d) of part II of Schedule VI of Companies Act, 1956, is annexed hereto

(xii) Figures of previous year have been regrouped, reclassified and recast, wherever considered necessary.