Simbhaoli Sugars Reports Consolidated Financial Results amidst Insolvency Proceedings; Audit Issues Adverse Opinions on Key Subsidiaries

Simbhaoli Sugars Reports Consolidated Financial Results amidst Insolvency Proceedings; Audit Issues Adverse Opinions on Key Subsidiaries​

Simbhaoli Sugars Limited has recorded its audited consolidated financial results for the quarter and year ended March 31, 2026. These findings were reviewed by the Interim Resolution Professional (IRP) while the company undergoes Corporate Insolvency Resolution Process (CIRP). The reporting period saw significant operational losses across the group, accompanied by complex audit qualifications issued by auditors across various entities.

The management of Simbhaoli Sugars Limited, which is currently under CIRP initiated by Punjab National Bank (PNB), recorded a total comprehensive loss of ₹6,759.93 Lakhs for the year ended March 31, 2026. The consolidated financial statements showed net sales from operations at ₹89,330.28 Lakhs, against total expenses of ₹96,199.91 Lakhs.

The consolidated balance sheet reflected Total Assets of ₹184,831.35 Lakhs as of March 31, 2026, compared to ₹2,03,251.08 Lakhs in the previous year. For the entire group, the Statement of Cash Flow indicated a Net cash generated from operating activities of ₹2,475.20 Lakhs for the fiscal year.

Key figures related to the consolidated financial performance are summarized below:

Legal Developments and Auditor Opinions​

Concurrent with the financial reporting period, the National Company Law Appellate Tribunal (NCLAT) delivered a judgement regarding appeals filed against the CIRP order. The NCLAT dismissed the appeal filed by Ms. Gursimran Kaur Mann, one of the Company's promoters, and disposed of the appeal filed by Surender Pal Singh Mangat, a farmer, with certain directions.

However, the consolidated financial results for Simbhaoli Sugars Limited carry severe audit qualifications. The auditors found that the consolidated results do not give a true and fair view due to findings across multiple entities:

• Simbhaoli Power Private Limited (SPPL): The subsidiary’s financial statements were subject to a Disclaimer of Opinion, citing material uncertainties regarding its ability to continue as a going concern, continuous losses, operational issues such as turbine breakdown at the Simbhaoli plant and non-generation of power at the Chilwaria plant, and disputes over bagasse purchase price.
• Integrated Casetech Consultants Private Limited (ICCPL): The subsidiary’s results were subject to an Adverse Opinion, noting unresolved disputes concerning unbilled revenue (₹492.42 Lakhs) and trade receivables (₹312.97 Lakhs), along with the failure to recognize appropriate impairment or Expected Credit Loss (ECL).

The holding company's financial statements also faced multiple adverse qualifications related to unreconciled liabilities, including non-provision of interest expenses on borrowings from banks after CIRP commencement and unpaid interest on unsecured loans from a related holding company. These qualification points include:

• Non-recognition of estimated interest expense on bank borrowings amounting to ₹34,990.72 Lakhs for the year ended March 31, 2026 (₹8,997.64 Lakhs for the quarter). The total accumulated unprovided interest expenses related to banks is ₹2,10,020.35 Lakhs up to March 31, 2026.
• Non-recognition of interest payable on delayed payment of sugarcane dues to farmers amounting to ₹12,163.25 Lakhs claimed by cane societies as of July 11, 2024.

Financial Status and Contingencies​

The audit reports highlight several financial contingencies related to the ongoing CIRP process:

• Management Estimates: Management stated that they prepared the statements on a going concern basis, believing that operations are intended to be preserved through the resolution process, though this assessment is qualified by auditors due to existing uncertainties.
• Impairment and Assets: The company recognized a provision for impairment amounting to ₹568.40 Lakhs concerning one non-operational turbine at the Simbhaoli plant. However, subsequent assessments of investments in and receivables from subsidiaries (totaling ₹23,518.33 Lakhs) could not be assessed for impairment loss by auditors due to pending CIRP finalization.
• Litigation and Penalties: The company has recognized disputed facility charges receivable from SPPL aggregating to ₹1,005.43 Lakhs, but the recoverability of this amount remains unconfirmed. Additionally, Simbhaoli Power Private Limited (SPPL) recorded a net loss of ₹213.88 million for the year ended March 31, 2026, amid operational issues like non-generation of power at the Chilwaria plant and disputes with a joint venture partner regarding bagasse purchase price.

In light of these factors, all financial statements were taken on record by the IRP, who signed the document relying on certifications provided by the Key Management Personnel and management officials of the Corporate Debtor.

SIMBHALS Stock Price Movement​

Simbhaoli Sugars Limited shares edged higher today, settling at ₹7.17 after gaining 1.27%. The stock traded with a volume of 5,753 shares in the session.