1. Corporate Information

Palash Securities Limited (the Company) was incorporated on 23rd March, 2015 as a Subsidiary Company of The Oudh Sugar Mills Limited (OSML). With the objective of business realignment of OSML and Upper Ganges Sugar & Industries Limited (UGSIL), a composite scheme of arrangement had been filed with the Hon’ble High Court of Allahabad to transfer the Food Processing and Investment business undertaking of OSML to the Company and thereafter to transfer the Food Processing business undertaking of the Company to Allahabad Canning Limited (ACL) from the appointed date i.e. 1st April, 2015, which has been approved by the National Company Law Tribunal.

The main object of the Company is to invest, deal etc. in securities mainly of group companies and in immovable properties. The Company acts as a Core Investment Company (CIC) as per RBI guidelines.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared the financial statements to comply in all material respects with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 under the historical cost convention except for impact of Scheme of Arrangement taken at fair value as detailed in Note 2(ii) below and on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except for the change in accounting policies explained below.

3. Scheme of Arrangement

a) As per the Composite Scheme of Arrangement (“the scheme”) approved by the National Company Law Tribunal, all the assets and liabilities of the food processing and investment business undertakings of OSML had been transferred to and vested in the Company at their respective book values and thereafter the food processing business undertaking of the Company present in the state of Uttar Pradesh had been transferred to and vested in ACL at their respective book values as on 1st April, 2015 on a going concern basis from appointed date i.e. 1st April, 2015.

As per the scheme, appointed date as approved by the National Company Law Tribunal was 1st April, 2015 and effective date is 23rd March, 2017 being the date on which the certified copy of the order sanctioning the said scheme was filed with the Registrar of Companies, Kanpur, Uttar Pradesh and Uttarakhand in accordance with the Companies Act, 1956 and applicable provisions of Companies Act, 2013. Accordingly, all related adjustments thereof had been given effect to in the accounts during the previous financial year ended 31st March 2017.

b) Pursuant to the scheme above, in the previous financial year, the Company had issued 1,00,03,102 fully paid up equity shares of Rs.10 each to the shareholders of OSML as per Record date 23.03.2017, aggregating to Rs.1,000.31 lakhs, in the ratio of 27 equity shares of the face value of Rs.10 each of the Company for every 70 equity shares of the face value of Rs.10 each held in OSML.

Further, the Company had issued 13,00,000 fully paid up 8.5% Non-Convertible Cumulative Redeemable Preference Shares of Rs.10 each to the preference shareholders of OSML, aggregating to Rs.130 lakhs on the same terms and conditions.

Further the Company had received 1,09,34,588 fully paid up equity shares of Rs.10 each from ACL, aggregating to Rs.1,093.46 lakhs, as consideration for the transfer of food processing business undertaking. The aforesaid shares of ACL have been shown as Non-current Investment in the Balance Sheet.

Terms / rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution to equity shareholders will be in proportion to the amount paid on the shares held by them.

Terms of redemption of Preference Shares of Rs. 10 each

The Non-Convertible Cumulative Redeemable Preference Shares (NCCRPS) of Rs.10 each carries dividend @ 8.50% per annum.

NCCRPS shall be redeemable at par on 2nd August, 2023 being twelve years and one day from the date of the original allotment i.e. 1st August, 2011 with a right vested to the Board of Directors to redeem it earlier, subject to consent of the lender.

The Dividend is payable at the time of redemption of the NCCRPS. However, the Board reserves the right to pay dividend earlier subject to the availability of the profit.

4. Previous year’s figures including those given in brackets have been regrouped / rearranged wherever necessary.