Mawana Sugars Limited has informed stock exchanges about receiving a penalty notice from the Uttar Pradesh excise department regarding its distillery operations. The company disclosed this development under SEBI listing regulations on February 23, 2026.

Penalty Details and Financial Impact

The Nanglamal Sugar Complex, a unit of Mawana Sugars, received communication from the Office of Additional Excise Commissioner (Administration), U.P. regarding penalty imposition for alleged non-compliance in alcohol production standards.

Nature of Alleged Violation

The penalty stems from allegations that the recovery percentage of alcohol from molasses based on fermentable sugar fell below prescribed regulatory limits at the Nanglamal Sugar Complex's distillery division in Meerut. This represents a compliance issue related to production efficiency standards mandated by excise authorities.

Regulatory Action Breakdown

The excise department has taken a two-pronged approach to the penalty:

• Direct Penalty: Rs 45,000 imposed specifically for low recovery cases
• Security Deduction: Additional Rs 45,000 recovered from the company's performance security amount
• Total Impact: Rs 90,000 affecting the company's financials

Company Response and Next Steps

According to the disclosure, Mawana Sugars has not yet taken specific action regarding this communication. The company filed this disclosure in compliance with SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, ensuring transparency with stakeholders about regulatory communications that could impact operations.

The penalty relates to historical operations during 2019-22, indicating this is a retrospective assessment by excise authorities. The relatively modest financial impact of Rs 90,000 suggests this is a minor operational compliance matter rather than a significant business disruption for the sugar and distillery company.

Mawana Sugars Limited achieved a significant milestone in its corporate restructuring process by securing unanimous approval from unsecured creditors for the proposed scheme of amalgamation with Mawana Foods Private Limited. The NCLT-convened meeting of unsecured creditors held on February 21, 2026, complemented the earlier overwhelming shareholder approval of 99.9999%, demonstrating complete stakeholder support for the amalgamation.

Shareholders Meeting Success

The company successfully concluded its National Company Law Tribunal (NCLT) convened meeting of equity shareholders on February 21, 2026, securing overwhelming approval for the proposed scheme of amalgamation with Mawana Foods Private Limited. The court-ordered meeting was conducted through video conferencing from 02:30 PM to 02:40 PM (IST), with 93 participants attending the virtual meeting.

Shareholder Voting Results

Out of 25,243,456 total valid votes cast by shareholders, 25,243,435 votes were in favor, representing 99.9999% approval, while only 21 votes were cast against the resolution.

Unsecured Creditors Meeting

The NCLT-convened meeting of unsecured creditors was held on the same day from 12:00 PM to 12:20 PM (IST) through video conferencing, with 19 participants attending. The meeting was chaired by Adv. Aditya Dewan, with Adv. Sameer Ali serving as the scrutinizer, both appointed by the Hon'ble NCLT.

Creditors Voting Analysis

The unsecured creditors demonstrated complete unanimity, with all 22 creditors representing ₹5,41,66,253 in outstanding debt voting in favor of the amalgamation scheme, achieving 100% approval with zero votes against the resolution.

Regulatory Framework and Compliance

Both meetings were conducted pursuant to the NCLT order dated December 18, 2025, and in compliance with sections 230-232 of the Companies Act, 2013, and SEBI Listing Regulations. The company provided comprehensive voting facilities including remote e-voting from February 18-20, 2026, ensuring maximum participation from stakeholders.

Meeting Infrastructure

Scheme Implementation Status

With both shareholder and creditor approvals secured with overwhelming majorities, the scheme of amalgamation between Mawana Foods Private Limited (Transferor Company) and Mawana Sugars Limited (Transferee Company) now awaits final sanction from the Hon'ble NCLT. The company has filed detailed documentation including summary of proceedings, e-voting results, and scrutinizer's reports with BSE Limited and National Stock Exchange of India Limited as per regulatory requirements.

The successful approvals from both stakeholder groups represent a crucial step forward in the corporate restructuring process, with the scheme meeting the required majority thresholds of three-fourths in value for both shareholders and creditors as mandated under the Companies Act, 2013.