K M Sugar Mills demerger ends KM Spirits subsidiary status

K M Sugar Mills Limited’s Distillery Division was vested in KM Spirits and Allied Industries Limited from April 1, 2026, ending KM Spirits’ status as a subsidiary and removing K M Sugar Mills’ requirement to publish consolidated results for the quarter ended September 30, 2026. The National Company Law Tribunal sanctioned the scheme on August 19, 2026.

When did K M Sugar Mills’ distillery demerger take effect?

K M Sugar Mills’ distillery demerger took effect from the appointed date of April 1, 2026. The National Company Law Tribunal, Allahabad Bench, Prayagraj, sanctioned the Scheme of Arrangement on August 19, 2026 in CP (CAA) No. 16/ALD/2026 connected with CA (CAA) No. 5/ALD/2026.

The undertaking transferred was K M Sugar Mills’ Distillery Division, which the filing calls the Demerged Undertaking. The company disclosed the structural change in its November 5, 2026 board-meeting outcome under Regulations 30 and 33 of the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015.

The April 1, 2026 appointed date, rather than the August 19 tribunal order date or the November 5 disclosure date, determines the accounting treatment. The auditor said the Distillery Division stood demerged and vested in KM Spirits from that appointed date in accordance with the treatment specified in the scheme.

What changed in K M Sugar Mills’ group reporting?

KM Spirits ceased to be a subsidiary of K M Sugar Mills from April 1, 2026. K M Sugar Mills therefore said it was no longer required to prepare consolidated financial results for the quarter ended September 30, 2026.

The November 5, 2026 release contains unaudited standalone results for K M Sugar Mills for the quarter and six months ended September 30, 2026. The board approved those results after a meeting that began at 11:30 AM Indian Standard Time and concluded at 4:00 PM Indian Standard Time.

Mehrotra & Mehrotra reviewed the standalone results under Standard on Review Engagements 2410, which concerns a review of interim financial information by an entity’s independent auditor. Its November 5, 2026 limited review conclusion said nothing had come to its attention to indicate a material misstatement, while noting that a review provides less assurance than an audit.

How were K M Sugar Mills’ financial results restated?

K M Sugar Mills restated the quarter ended June 30, 2026 and the quarter and half year ended September 30, 2026 to give effect to the April 1, 2026 demerger. The auditor said the transaction was accounted for from the appointed date under the accounting treatment specified in the Scheme of Arrangement.

For comparison, K M Sugar Mills classified the quarter and half year ended September 30, 2025 and the year ended March 31, 2026 as discontinued operations. The classification was made under Indian Accounting Standard 105, Non-current Assets Held for Sale and Discontinued Operations, separating the historic distillery business from continuing operations in the comparative presentation.

The restated continuing-operations figures show total income of Rs 197.92 crore for the quarter ended September 30, 2026, compared with Rs 163.36 crore for the restated September 2025 quarter. Profit after tax from continuing operations was Rs 23.36 crore, up from Rs 11.13 crore, while profit before tax was Rs 31.57 crore against Rs 14.98 crore.

For the six months ended September 30, 2026, K M Sugar Mills reported Rs 370.34 crore of total continuing-operations income, compared with Rs 356.49 crore in the restated corresponding 2025 period. Continuing-operations profit after tax was Rs 29.43 crore, compared with Rs 23.14 crore a year earlier; the filing presents both comparative periods as restated.

What do K M Sugar Mills’ post-demerger standalone figures show?

K M Sugar Mills reported total assets of Rs 394.54 crore as at September 30, 2026, compared with Rs 749.74 crore as at March 31, 2026. The balance-sheet comparison is between the September unaudited position and the March audited position, with the September figures reflecting the demerger accounting from April 1, 2026.

Equity stood at Rs 354.59 crore at September 30, 2026, including Rs 18.40 crore of equity share capital and Rs 336.19 crore of other equity. At March 31, 2026, total equity was Rs 391.88 crore, comprising the same Rs 18.40 crore of share capital and Rs 373.48 crore of other equity.

Current liabilities were Rs 33.98 crore at September 30, 2026, compared with Rs 339.77 crore at March 31, 2026. Current borrowings were Rs 6.89 crore at September 30, against Rs 246.21 crore at March 31, although the filing does not attribute each balance-sheet movement separately to the demerger.

The six-month cash-flow statement records Rs 281.85 crore of net cash generated from operating activities for the period ended September 30, 2026, against Rs 253.67 crore in the corresponding 2025 period. It also records Rs 0.46 crore of cash and cash equivalents transferred pursuant to the Scheme of Arrangement, with closing cash and cash equivalents of Rs 3.83 crore.

Investing activities used Rs 37.58 crore in the six months ended September 30, 2026, compared with Rs 34.09 crore used in the corresponding 2025 period. Financing activities used Rs 241.44 crore, compared with Rs 222.72 crore a year earlier, and the cash-flow statement does not provide a separate complete schedule of all assets and liabilities transferred to KM Spirits.

Conclusion

The April 1, 2026 demerger moved K M Sugar Mills’ Distillery Division into KM Spirits and ended the subsidiary relationship. K M Sugar Mills now reports standalone September-quarter results, while the September 2025 comparative period and the year ended March 31, 2026 have been presented with the historic distillery business classified as discontinued operations.

The filing leaves the detailed allocation of all transferred assets and liabilities unresolved, although it records Rs 0.46 crore of cash transferred under the scheme in the six months ended September 30, 2026. Future K M Sugar Mills disclosures will be relevant for any further detail on the post-demerger financial position and continuing-operations comparisons.