simbhaoli sugars ltd Auditors report

To

The Members of Simbhaoli Sugars Limited Simbhaoli, Hapur (U.P.)

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the accompanying Standalone financial statements of Simbhaoli Sugars Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31,2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, total comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

I) We draw attention to Note No. 21 of the Standalone financial statements regarding differences in accounting of certain transactions by Simbhaoli Power Private Limited (SPPL), a material subsidiary company, since last three years which have been disputed by the Company. We are not made available the reconciliation statement of the accounts with SPPL and the details of the transactions in disputes, and hence we are not able to comment on its impact and it consequential impact on these standalone financial statements. Further, the company had invested substantial funds in Simbhaoli Power Private Limited (SPPL), a subsidiary company, which had been incurring losses since FY 2019-20. The auditors of SPPL, in its latest audit report for the year ended March 31,2022, reported for the existence of material uncertainty that might cast significant doubts about SPPLRss ability to continue as a going concern and also reported for existence of conditions for the impairment in the value of property, plant and equipment, which the management of SPPL had not determined. As at March 31,2023, the carrying amounts of investments in Equity Shares and Compulsory Convertible Debentures in SPPL in the books of the Company aggregates to Rs10,386.53 Lakhs and the carrying amounts of receivables and other dues aggregates to Rs 7,808.91 Lakhs. The management of the company has not carried out a detailed exercise to determine impairment in the carrying amounts of investments in and other recoverable from SPPL and had made a provision of Rs 125.00 Lakhs as credit loss allowance against the various dues. Due to non-availability of information with regard to appropriate impairment assessment carried out by the management of the company and financial and other information from the management of SPPL, we are unable to comment on the recoverability of the carrying amount of investments in and money recoverable from SPPL, including compliance with Ind AS-36 (RsImpairment of AssetsRs) and any consequential adjustments that may arise in this regard in these standalone financial statements.

ii) We draw attention to Note No. 4 of the Standalone financial statements regarding non provisions for impairment in the carrying value of property, plant and equipment. We are not made available of appropriate impairment assessment carried out by the management and accordingly, we are unable to comment on the same including compliance with the Ind AS-36 (RsImpairment of AssetsRs) and any consequential adjustments that may arise in this regard in these standalone financial statements.

iii) We draw attention to Note No 5(iv), of the Standalone financial statements regarding non- provision of interest liability in respect of delayed payment of sugarcane price for the reasons stated in the said note. The amount of interest not provided for in the books has not been ascertained.

iv) We draw attention to Note No.9 of the Standalone financial statements regarding non-provision of interest expense amounting Rs 19,018.54 Lakhs (Previous year Rs 17,013.85 Lakhs) on certain borrowings for the year ended March 31,2023 for the reasons stated in the said note. The total amount of interest expense not provided for in the accounts aggregates to Rs 88,948.43 Lakhs till March 31,2023 (Previous year Rs 69,929.48 Lakhs). Had the aforesaid interest expense been provided for, the Finance Cost, Net Loss after tax and Total Comprehensive Loss for the year ended March 31,2023 would have been increased by Rs 19,018.54 Lakhs (Previous year Rs 17,013.85 Lakhs), the Current Financial Liability as at March 31, 2023 would have been increased and shareholderRss funds as at March 31, 2023 would have been decreased by Rs 88,948.43 Lakhs (Previous year Rs 69,929.48 Lakhs).

v) We draw attention to Note No.10(iv) of the Standalone financial statements regarding directorRss remuneration paid/ provided amounting to Rs 242.55 lakhs for the year ended March 31,2023, in accordance with the special resolutions passed in the Annual General Meeting, after obtaining consent from lenders having majority outstanding and not from all the lenders, which is not in compliance with the provisions of sections 197 of the Companies Act, 2013.

Our report is qualified in respect of above matters.

Material Uncertainty related to Going Concern:

i) As stated in Note No.4 of the Standalone financial statements, the standalone financial statement of the company has been prepared on going concern basis. Events or conditions as set forth in Note No. 4 of the Standalone financial statements indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as going concern. The ability of the Company to continue as going concern depends on the decision of National Company Law Tribunal under the Insolvency and Bankruptcy Code 2016, sanction and implementation of proposed debt resolution and realignment scheme with the lenders as stated in the said notes and turnaround of its sugar and distilleries operations on sustainable basis.

Our report is not modified in respect of the above matter.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the AuditorRss Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIRss Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter:

Key Audit Matters	AuditorRss Response
Determination of Cost of Production (COP) and Net Realizable Value (NRV) of Finished Goods and By-Products for valuation of inventory:
As on March 31,2023, the Company has inventory of finished goods, by-products and work in progress with a carrying value of Rs 42,398.57 Lakhs. The inventory of finished goods viz. Sugar and ethanol is valued at the lower of COP and NRV whereas the inventory of byproducts viz. molasses and bagasse is valued at NRV/Derived NRV.	Principal Audit Procedures
	We understood and tested the design and operating effectiveness of controls as established by the management in determination of COP and NRV/Derived NRV. We reviewed the cost records maintained by the management and examined the documents maintained by the management for computing the COP and NRV/ Derived NRV with reference to the principles prescribed under Ind AS-2 on “Inventories”.
We considered the value of the inventory of finished goods and byproducts as a key audit matter given the relative value of inventory in the standalone financial statements and significant judgement involved in determination of COP and also the consideration of factors such as minimum sale price, monthly quota, and fluctuation in domestic and international selling prices in determination of NRV/ derived NRV.
	We considered various factors including the prevailing unit specific domestic selling price of the products at year end and subsequent to the year end, yield of ethanol from “B” Heavy Molasses, prevailing selling price of “C” Heavy Molasses, contracted selling price of the products in respect of contracted sales (including exports contracts), Molasses Policy of State Government for determination of levy obligation of molasses as prevailing as on the date of our audit and initiatives taken by the Government with respect to sugar industry as a whole, for determination of NRV/ Derived NRV of the products.
	Based on the above procedures performed, the managementRss determination of COP and NRV/ derived NRV of finished and byproducts as at year-end and the comparison of COP with NRV for the valuation of inventory is considered to be reasonable.

Information Other than the Standalone Financial Statements and AuditorRss Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the Standalone Financial Statements and our auditorRss reports thereon.

The aforesaid report is expected to be made available to us after the date of this auditorRss report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the Companys annual report and if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and shall take appropriate actions, if required.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are responsible for overseeing the Companys financial reporting process.

AuditorRss Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorRss report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to Standalone Financial statement in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managementRss use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorRss report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorRss report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorRss report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (AuditorRss Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure - RsARs a statement on the matters specified in paragraphs 3 and 4 of the Order;

2. As required by Section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under Section 197 read with Schedule V to the Act, except for non-compliance as reported in Para (v) of Basis of Qualified Opinion above.

3. As required by Section143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the matters described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

d) Except for the matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid Standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 as amended.

e) The qualifications relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

f) On the basis of the written representations received from the directors as on March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

h) With respect to the other matters to be included in the AuditorRss Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note no. 5(ii) to the standalone financial statements, has disclosed the impact of pending litigations on its financial position in its standalone financial statements.

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses as at March 31,2023.

iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented to us that, to the best of its knowledge and belief, no funds have been advanced or loaned or

invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented to us that, to the best of its knowledge and belief, no funds ( which are material either individually or in aggregate) have been received by the company from any person(s) or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on our audit procedure conducted that are considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation under sub- clause (i) and (ii) of Rule 11 (e) as provided

under paragraph (2) (h) (iv) (a) & (b) above, contain any material misstatement.

v) The Company has not declared or proposed dividend during the year.

vi) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the company with effect from April 1, 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for Financial Year ended 31st March,2023.

FOR MITTAL GUPTA & CO.

Chartered Accountants FRN 001874C

(B. L. Gupta)

^ ANNEXURE A TO THE INDEPENDENT AUDITORRsS REPORT ^

Annexure A to the Independent AuditorRss Report to the members of Simbhaoli Sugars Limited on its standalone financial statements dated 26.05.2023.

Report on the matters specified in paragraph 3 of the Companies (AuditorRss Report) Order, 2020 ("the OrderRs) issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 ("the Act") as referred to in paragraph 1 of RsReport on Other Legal and Regulatory RequirementsRs section.

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

I) (a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of property,

plant and equipment and relevant details of right-of use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The property, plant and equipment and right-of use assets have been physically verified by the management according to the programme of periodical verification in phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its property, plant and equipment. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

(c) According to the information and explanation given to us and on the basis of our examination of records of the Company, except for the lease hold land admeasuring approximately 17 acres at village Simbhaoli and the following stated properties, the title deed of immoveable properties are held in the name of the company. The lease deed executed in favour of the Company by the State Government has been cancelled in earlier years and we are informed that the company had filed writ petition against the impugned cancellation order which is still subjudice. Details of other immoveable properties which are not registered in the name of the Company are as under: -

(Rs In Iakhs)

Description of property	Gross carrying value	Held in name of	Whether promoter, director or their relative or employee	Period held -indicate range, where appropriate	Reason for not being held in the name of company
Land at Simbhaoli Sugars limited -Brijnathpur (U.P)	42.30	Mr. Jaswant Lal	No	01.04.2015	Land acquired under Scheme of Amalgamation could not be transferred in the name of company as approval from collector is in process
·do·	12.47	Mr. Mohd. Yameen	No	01.04.2015	Land acquired under Scheme of Amalgamation could not be transferred in the name of company as the transferor of the land had expired and the company is in negotiation with the legal heir of transferor and in the process of completing the legal formalities for getting the land registered in its name.

(d) The Company has not revalued its property, plant and equipment (including right-of use assets) and intangible assets during the year.

(e) There are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

ii) (a) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on verification between the physical stocks and the book records in each class of inventory is less than 10% and have been properly dealt with in the books of accounts.

(b) As disclosed in Note No. 9(i) to the standalone financial statements, the Company were sanctioned working capital limits in excess of Rs 5.00 Crores in aggregate from banks during earlier years on the basis of security of current assets of the Company and the same were recalled by them on account of continuous defaults. The quarterly returns/statements filed by the Company with such banks are not in agreement with the books of accounts of the Company and the details are as follows:

Quarter ending	Value as per books of accounts	Value as per quarterly return/statement filed with lenders	Difference
June 30, 2022	37,751.33	36,676.53	1,074.80
September 30, 2022	17,947.98	15,983.47	1,964.51
December 31, 2022	26,444.03	24,834.27	1,609.76
March 31,2023	44,020.85	43797.89	222.96

Reason for differences:

As explained by the management, the differences pertain to valuation methodology adopted while filing stock statements with the lenders. Finished Stocks are valued at lower of cost or net realisable value in the books of accounts as per applicable accounting standards but finished stock in stock statement is valued by methodology as stipulated in sanction letter of banks. Further, as explained, since all the Cash Credit facilities are in Default and being Recalled no Drawing Power is accorded to the company basis Stock Statements.

iii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not made any investments or, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties during the year. Accordingly, the provisions of clause 3(iii)(a), (c) to (f), of the Order are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, the Company has complied with provisions of Sections 185 and 186 of the Act, with respect to investment made.

v) According to the information and explanations given to us, in our opinion, the Company has not accepted any deposits from the public within the meaning of section 73, 74, 75 and 76 of the Act read with the Companies (Acceptance & Deposit) Rules 2014 and other relevant provisions of the Act, to the extent notified. Accordingly, the provisions of clause 3(v) of the said order are not applicable to the Company.

vi) We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, in respect of Companys products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) In respect of statutory dues:

a) According to the records of the company and information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Tax deducted at sources, Tax collected at source, Sales Tax, value added tax (VAT), Goods and Service Tax (GST), Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it, with the appropriate authorities though there has been slight delay in few cases. There are no undisputed statutory dues as referred to above as at March 31,2023 outstanding for a period of more than six months from the date they become payable except for the following:

(Rs In Iakhs)

Particulars	Amount	Particulars	Amount
Purchase Tax	15.34	TDS Demand	4.16Rs
Import Duty	424.04

b) According to the information and explanations given to us, the particulars of Income tax, Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax, Value Added Tax, Goods and Service Tax, which are not been deposited on account of any dispute as on March 31,2023 are as reported in Note No. 14 to the accompanying standalone financial statements.

viii) According to the information and explanations given to us, the company has not surrendered or disclosed any transaction, previously unrecorded in the books of accounts, in the tax assessments under the Income Tax Act, 1961, as income during the year. Accordingly, the provisions of clause 3(viii) of the Order are not applicable to the company.

ix) (a) According to the information and explanations given to us and as per the books and records examined by us, in our opinion, the

Company has defaulted in repayment of loans and borrowings to banks and Government. Details of defaults in respect of principal and interest dues to Banks & Governments are stated in Note No.9 to accompanying standalone financial statements.

(b) According to the information and explanations given, including representation received from the management, and the records of the Company examined by us the Company was declared Willful Defaulter by Erstwhile Oriental Bank of Commerce now Punjab National Bank on 03.08.2018 which was subsequently Set Aside by HonRsble High court as mentioned in Note No. 8 to accompanying standalone financial statements.

(c) In our opinion and according to the information and explanation given to us, the Company has not availed any term loan during the year. Accordingly, the provisions of clause 3(ix)(c) of the Order are not applicable to the company.

(d) On overall examination of the financial statement of the Company, prima facie, funds raised on short term basis in earlier years were used for financing the losses and other long term purposes by the Company and due to the aforesaid reasons, the total current liability (inclusive of recalled long term borrowings which are classified as current liabilities) of the company, exceeded the current assets as at March 31,2023 by substantial amount.

(e) According to the information and explanations given to us and as per the books and records examined by us, the company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary company.

(f) According to the information and explanations given to us and procedures performed by us, the company has not raised loans during the year on the pledge of securities held in its subsidiary company.

x) (a) According to the information and explanations given to us and as per the books and records examined by us, the company has not

raised money by way of initial public offer or further public offer (including debt instruments). Accordingly, the provisions of paragraph

3(x)(a) of the Order are not applicable to the company.

(b) According to the information and explanations given to us and as per the books and records examined by us, the company has not made any preferential allotment or private placement of shares or convertible debentures during the year. Accordingly, the provisions of paragraph 3(x) (b) of the Order are not applicable to the company.

xi) (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or any fraud on the

Company has been noticed or reported during the year. Accordingly, the provisions of paragraph 3(xi) (a) and (b) of the Order are not applicable to the company.

(b) According to the information & explanations and representation made by the management, no whistle- blower complaints have been received during the year (and up to the date of the report) by the company.

xii) In our opinion, the Company is not a Nidhi Company. Accordingly, the provisions of paragraph 3(xii) (a) to (c) of the Order are not applicable to the company.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by applicable accounting standards.

xiv) (a) The Company has an internal audit system commensurate with the size and nature of its business.

(b) The internal audit reports of the Company issued till the date of the audit report, for the part period under audit have been considered by us.

xv) In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him and hence the provisions of paragraph 3 (xv) of the Order is not applicable to the Company.

xvi) (a) The provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) are not applicable to the Company. Accordingly, the

provision of paragraph 3 (xvi) (a) to (c) of the Order is not applicable to the Company.

(b) As per information and explanation provided to us, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016). Accordingly, the provision of paragraph 3 (xvi) (d) of the Order is not applicable to the Company.

xvii) In our opinion, and on the basis of examination of financial statements and subject to the effect of the matters stated in the Basis of Qualified Opinion Para of our report, the Company has not incurred cash losses in the current financial year and in the immediate preceding financial year on the basis of financial figures presented in the Statement of Profit and Loss Account.

xviii) There has been no resignation of the statutory auditors during the year. Accordingly, provisions of paragraph (xviii) of the Order are not applicable to the Company.

xix) According to the information and explanations given to us and on the basis of the standalone financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, we are of the opinion that the company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date because the company is already in default in making due payments to the banks and cane growers as at March 31,2023 and the current liabilities (inclusive of recalled long term borrowings classified as current liabilities) of the Company exceeded the current assets by Rs 1,36,866.81 Lakhs as at March 31,2023.

xx) Since, the Company is not required to spend any Corporate Social Responsibility (CSR) expenditure under the provision of Section 135 of the Companies Act, 2013 during the year, the provisions of paragraph (xx) of the Order are not applicable to the Company.

FOR MITTAL GUPTA & CO.

Chartered Accountants FRN 001874C

(B. L. Gupta)

Partner

^ ANNEXURE B TO THE INDEPENDENT AUDITORRsS REPORT ^

Annexure B to the Independent AuditorRss Report to the members of Simbhaoli Sugars Limited on its standalone financial statements dated 26.05.2023.

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) as referred to in paragraph 3(g) of RsReport on Other Legal and Regulatory RequirementsRs section

We have audited the internal financial controls with reference to standalone financial statements of Simbhaoli Sugars Limited (“the Company”) as of March 31,2023 in conjunction with our audit of the Ind AS standalone financial statements of the Company for the year ended on that date.

ManagementRss Responsibility for Internal Financial Controls

The Companys Management and the Board of Directors are responsible for establishing and maintaining internal financial controls with reference to standalone financial statements based on the criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

AuditorRss Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the

Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorRss judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

A Companys internal financial control with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to these standalone financial statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the material weaknesses have been identified as at March 31, 2023 in respect of various matters qualified in our main audit report under the section “Basis for Qualified Opinion, Material Uncertainty on Going Concern” which have resulted in the material misstatement in the Companys financial balance, presentation and disclosures of Ind AS Financial Statement.

A material weakness is deficiencies or combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weaknesses matters referred to above, the Company has, in all material respects, an adequate internal financial controls with reference to these standalone financial statements and such internal financial controls were operating effectively as at March 31,2023, based on the internal control with reference to Standalone Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

FOR MITTAL GUPTA & CO.

Chartered Accountants FRN 001874C

(B. L. Gupta)

Partner