Page 224 - BCML AR 2019-20

FINANCIAL STATEMENTS

Notes forming part of the Standalone Financial Statements

Note No. : 36 Other disclosures (contd.)

16. (a) The Hon’ble High Court at Allahabad, Lucknow Bench, vide its order dated 12th February, 2019 (“Order”) had quashed the G.O.
dated 4th June, 2007, vide which the Sugar Industry Promotion Policy 2004 (“SIPP”) was withdrawn, and held that the petitioner
companies were entitled for all the benefits for the entire period of the validity of SIPP . Consequent to this, the Company in
respect of its capital projects and expansions during the period from 2004 to 2008 is entitled for capital subsidy, reimbursement
of certain expenses, remission of certain taxes and levies in accordance with the provision of the said policy.

The State Government of UP and others have filed Special Leave Petitions challenging the said Order before the Hon’ble
Supreme Court of India and the cases are pending for hearing as on 31st March, 2020. Pending this, the Company’s claim for
reimbursement of H 33654.94 Lacs and capital subsidy of H 13137.77 Lacs pursuant to SIPP being contingent in nature, has not
been recognised.
(b) In terms of SIPP, the Company availed remission of taxes and levies, namely, Entry Tax on Sugar, Trade Tax on Molasses and
Cane Purchase Tax, Stamp duty and registration charges on purchase of land aggregating to H 11278.45 Lacs in earlier years.
These remissions were availed pursuant to protection earlier provided by the Hon’ble High Court at Allahabad, which has been
confirmed pursuant to the Order of the said court as given in Note No. 36(16)(a) above.
In the assessment of Entry Tax on Sugar and Trade Tax on Molasses relating to four sugar units, namely, Akbarpur, Mankapur,
Kumbhi and Gularia aggregating to H 6300.63 Lacs (including H 26.62 Lacs pertaining to the year 2017-18, from April 2017 to
June 2017, determined during the year ended 31st March, 2020) has been assessed, though these units are also eligible for the
remission under the SIPP. However, no demand has been raised and pursued against the Company in view of the protection by
the Hon’ble High Court as aforesaid. Since these units are eligible for incentive under SIPP and no demand has yet been raised
against the Company, the aforesaid amount of H6300.63 Lacs has not been considered as contingent liability.
17. Impact of COVID-19 Pandemic

During March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organisation. The Covid -19 pandemic and
the consequent lockdown restrictions imposed by the Central and State Governments have impacted business in general. However,
since, Company is engaged in the manufacturing of sugar, generation of power and production of Ethanol and other Industrial Alcohol,
which all fall under the category of essential commodities and thus, the activities of the Company were being carried out in the normal
course under the directives issued by the Ministry of Home Affairs and State Government.
Owing to lock-down demand for sugar was impacted to some extent which is gradually coming to its normal level. In the distillery
segment, the Oil Marketing Companies had actively re-allocated the quantities to the new depots to arrest the initial impact on the
slow lifting of Ethanol.
The Company’s capital and financial resources are well placed and have not been impacted because of the Covid-19. The Company has
enough liquidity to meet all its obligations/liabilities and does not expect to face any liquidity crunch.
Overall, Company does not foresee any significant impact on the operational results and the financial health as sugar and allied
businesses which the Company operates are all essential products and as such demand of the products will return to a large extent as
and when the situation normalizes.
18. The Board of Directors of the Company at its meeting held on 15th September, 2017 considered and approved cumulative investment
of H 17500.00 Lacs in tranches over a period of five years in Auxilo Finserve Private Limited (“AFPL”), an unlisted NBFC based in India and
engaged in financing activities in education sector.
The Company has so far acquired 15,50,00,000 (Previous Year: 7,50,00,000 ) Equity shares of AFPL having par value H 10 each with total
cost of H 15750.00 Lacs (Previous Year: H 7500.00 Lacs ) on preferential issue basis constituting 45.05% (Previous Year: 50.00%). Though,
it’s proportionate shareholding has come down to 45.05% as at 31st March 2020 due to investment made by an external investor, AFPL
continues to be an associate of the Company.

222 | Balrampur Chini Mills Limited