6.1 In previous years, the Company had invested ' 350.04 crore in preference share capital of Phenil Sugars Limited ('PSL). Till the end of previous year, PSLs net worth was negative, due to which the Company had fully provided for the diminution in the value of the aforesaid investment of '350.04 crore and also made a corresponding deferred tax impact of '129.25 crore in previous years in line with Ind AS. In the current year, PSL amended the terms of aforesaid instruments to convertible. Further, a substantial appreciation in the value of assets (mainly land) of PSLs units at Basti and Govindnagar was observed due to its proximity to Ayodhya (Uttar Pradesh) which is now developed into a world class tourist destination, this prompted the Company to take control over PSL. Accordingly the Company exercised its right of conversion of the said investment into equity shares capital of PSL. As a result, the Company received 35,00,39,270 equity shares of '10 each fully paid up, representing 98.01% of the total equity share capital, (post conversion) of PSL and consequently, PSL became a subsidiary of the Company effective from March 24, 2023. Due to substantial appreciation in the value of PSLs assets, the fair value of the equity shares exceeded its cost, leading to reversal of the earlier provision for diminution in value of investment and corresponding reversal of deferred tax on the same. Investment in equity shares of PSL are now stated at cost as per Ind AS 27 in standalone financial statements.

6.2 In previous years, the Company had invested an amount of '370.48 crore in Zero Coupon Optionally Convertible Debentures ('ZOCD') of Phenil Sugars Limited ('PSL). Till the previous year, PSLs networth was negative, due to which the Company had fully provided the said investments, amounting to '370.48 crore along with corresponding deferred tax of '148.69 crore. In the current year, a substantial appreciation in the value of assets (mainly land) of PSLs units at Basti and Govindnagar was observed which prompted the Company to take control over PSL. Due to such appreciation in the value of the PSLs assets, its networth became positive. Consequently, the Company restated its investment in ZOCD of PSL in the books at fair value (discounted cash flow value) of '268.36 crore with corresponding reversal of deferred tax by ' 55.95 crore. Also, during the current year, BHSLs major customer Ojas Industries Private Limited (OIPL) has settled its dues against sugar sales of ' 96.74 crore by transferring of ZOCD of PSL of '153.63 crore. This investment is recorded in the Company's books at a fair value (discounted cash flow value) of ' 92.68 crore with corresponding deferred tax of ' 0.95 crore on the same in line with Ind AS.

6.3 In previous years, the Company had invested '770.13 crore in Lalitpur Power Generation Company Limited ('LPGCL) and acquired 1,54,39,900 equity shares of ' 10 each fully paid up. LPGCL operates thermal power plants in Uttar Pradesh with a total capacity of 1980 MW. As per Ind AS 109 'Financial Instruments' and based on an independent valuer's report, the Company measured the equity investments in LPGCL at its fair value through other comprehensive income (FVOCI) of '2,161.59 crore with a corresponding deferred tax of '206.09 crore on the same in line with Ind AS.

6.4 In earlier years, the Company provided loans and advances (Inter Corporate Deposit - ICD including Interest) amounting to '445.54 crore to Ojas Industries Private Limited ('OIPL). During the current year, this loan has been settled by taking over the investments of OIPL in Zero Coupon Optionally Convertible Debentures (ZOCD) of ' 445.54 crore in Lambodar Stocks Private Limited ('LSPL). Subsequently, the Company acquired 4,05,04,000 equity shares in Bajaj Power Ventures Private Limited ('BPVPL) in exchange for the investments in ZOCD of LSPL. As per Ind AS 109 'Financial Instruments' and based on an independent valuer's report, the Company measured the equity investments in BPVPL at its fair value through other comprehensive income (FVOCI) of '648.06 crore with a corresponding deferred tax of '47.18 crore on the same in line with Ind AS.

6.5 These investments are pledged against loans taken by the Company and Lalitpur Power Generation Company Limited.

(i) Details of shares allotted without payment being received in cash during five years immediately preceding the Balance Sheet date are given below:

Pursuant to the obligations on the Promoters of the Company under the Master Restructuring Agreement executed with the lenders on December 30, 2014, the promoters / promoter group entity given an unsecured loan of ' 200 crore to the Company during the period from November 13, 2014 to September 24, 2015. As per request of the Promoters, consortium of lenders granted their approval for the conversion of loan into equity shares of the Company. Pursuant to the approval of the shareholders of the Company in the extra ordinary general meeting held on July 15, 2021, the board of directors at its meeting held on July 20, 2021, has allotted, 14,38,00,000 equity shares at a price of ' 13.28 per share (including premium of ' 12.28 per share) to promoters / promoter group entity aggregating to ' 190,96,64,000 on conversion of loan.

Consequent to the allotment of the equity shares as aforesaid, the paid up equity share capital of the Company stands increased from ' 113,35,59,942/- (divided into 113,35,59,942 equity shares of ' 1/- each) to ' 127,73,59,942/-, divided into 127,73,59,942 equity share of ' 1/- each. Shareholding of promoters / promoter group increased from 15.43% to 24.95%

(iii) Terms/ rights of equity shares:-

The company has one class of equity shares having par value of '1/- per share. All equity shares are ranking pari passu in all respects including dividend. In the event of liquidation of the company, the holders of the equity shares will be entitled to receive the realised value of the assets of the company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

(v) The Company hold beneficial interest in BHL Security Trust which holds 3.11 crore shares of the company allotted on amalgamation of it's subsidiary Bajaj Hindusthan Sugar and Industries Limited in 2010. The company has also formed an ESOP trust under the ESOP scheme. The Company has given an advance ' 8.69 crore to ESOP Trust which holds 0.18 crore equity shares. Face value of these shares are treated as treasury shares as per Ind AS 32 - "Financial Instruments - Presentation” and shown as reduction from equity. Excess of carrying value of these shares over the face value are reduced from securities premium.

Nature and description of reserves:

- Capital Redemption Reserve: Whenever the Company redeem its preference shares or buy its own shares which reduces its share capital, then capital redemption reserve is created by face value of its shares.

- Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium.

- General Reserve: General Reserve was created by transferring a portion of the net profit of the Company as per the requirements of the Companies Act, 2013.

- Molasses Storage Reserve Fund is created as per the provisions under Molasses Control (Regulation of Fund and Erection of Storage Facilities) Order, 1976.

- Retained Earnings: Remaining portion of profits earned or accumulated losses by the Company till date after appropriations.

- Remeasurements of defined benefit liability (asset) comprises actuarial gains & losses and return on plan assets (excluding interest income)

- Gain / (loss) on Investment through FVOCI represents the cumulative gains and losses arising on the revaluation of equity and debt instruments measured at fair value through other comprehensive income that have been recognized in other comprehensive income, net of amounts reclassified to profit or loss when such assets are disposed off and impairment losses on such instruments, if any

18.2 34,83,24,626 Unlisted, Unrated, Redeemable, Optionally Convertible Debentures (Series 1/ 201718) of ' 100/- each issued on Preferential basis to the lenders in accordance with S4A Scheme on December 18, 2017. Debentures are to be redeemable in 13 equal annual instalments starting from March 31,2025. The coupon rate for year 1& 2 is 0.01% p.a., for year 3 & 4 is 1.00% p.a. and thereafter 2.50% p.a., payable annually on the last date of every financial year. The redemption premium is payable on redemption of debentures to be decided by lenders at going weighted average interest cost so that there is no NPV loss to the lenders.

On occurrence of event of default, lenders has the right to convert all outstanding debentures into equity shares at the conversion price, to be determined in accordance with the guidelines of RBI.

18.4 Details of securities

Term Loans and debentures from Banks are secured on first pari passu charge basis, by way of mortgage / hypothecation over all immovable and movable property plant and equipment (both present and future) of the company, and first pari-passu charge by way of hypothecation over all current assets (both present & future) of the Company. The said loans are further secured by personal guarantee of Chairman (Promoter) and corporate guarantee by a promoter group company, pledge of entire shares held by the Promoters of the company in BHSL, 21,82,870 equity shares of LPGCL held by the company and 3,63,00,011 equity shares of Bajaj Energy Ltd. held by promoters group company. All the charges have been created and filed with ROC and there is no charges or satisfaction yet to be registered with ROC beyond the statutory period.

18.5 Loan from promoters

(i) As per terms of restructuring approved by lenders, the promoters are required to bring promoter's contribution amounting to '200 crore in phased manner till September 2015 in the form of equity capital/preference capital/unsecured loan/other similar instruments. An amount of '200 crore has been brought by promoters as unsecured loan within stipulated period. Interest if any, payable shall be determined after the restructuring period is completed. Presently, said amount is treated as unsecured loan with the option to convertible into equity / preference shares or any other similar instrument. As per Ind AS 32 contribution amount received is classified as compound instrument bifurcated into ' 64.22 crore as debt and ' 135.78 crore as other equity by discounting the amount @12% p.a. for a tenure of 10 years. The unwinding of discount in subsequent periods on loan component is recognised in the statement of profit and loss.

(ii) As per the approved restructuring of loan under S4A Scheme, promoter/ promoters group has transferred 11,99,87,344 equity shares of ' 1/- per equity share to lenders as per overseeing committee recommendation as part payment of unsustainable debt. Consequently, the consideration amount of ' 11,99,87,344 is accounted as unsecured loan from promoters and as per Ind AS 32, said amount due to promoters is treated as compound financial instrument and bifurcated into other equity of ' 10.76 crore and ' 1.24 crore by discounting the amount @12% pa for a tenure of 20 years.

(iii) During the previous year, as per request of the Promoters, consortium of lenders granted their approval for the conversion of loan mentioned above in 18.5 (i) into equity shares of the Company. Pursuant to the approval of the shareholders of the Company at the extra ordinary general meeting held on July 15, 2021, the board of directors at its meeting held on July 20, 2021, has allotted, 14,38,00,000 equity shares at a price of ' 13.28 per share (including premium of ' 12.28 per share) to promoters / promoter group entity aggregating to ' 190,96,64,000 on conversion of aforesaid loan.

Consequent to the allotment of the equity shares as aforesaid, the paid up equity share capital of the Company stands increased from the ' 113,35,59,942/-, divided into 113,35,59,942 equity shares of ' 1/- each, to ' 127,73,59,942/-, divided into 127,73,59,942 equity share of ' 1/- each. Shareholding of promoters / promoter group increased from 15.43% to 24.95%.

18.6 Details of delays and defaults in payment of financial obligations

No instalment of Principal and Interest on Term Loan was outstanding as on 31.03.2023.

** Due to event of default, as per MRA lenders can exercise their right to convert the OCD's in equity shares of the Company.

The debts of the Company, got restructured in Dec 2017, under Scheme for Sustainable Structuring of Stressed Assets (S4A). Part of the debt, assigned as unsustainable debt, and converted into Optionally Convertible Debentures (OCD), of ' 3483.25 crore, issued to respective lender banks.

During the previous year, the Company had not paid coupon interest @ 2.50% on OCDs of ' 78.37 crores (net of TDS) for FY 2021-22, due on March 31,2022, which was paid subsequently on 24.11.2022. Due to delay in overall debt servicing and default in payment of coupon rate interest, the lenders have classified the company's account as Non - performing Assets (NPA) as per the RBI regulations. As a process the Stresses Assets Resolution Group (SARG) of SBI has initiated Corporate Insolvency Resolution Process (CIRP) of the Company before the Hon'ble National Company Law Tribunal (NCLT) which was also disclosed in the stock exchanges. The Company is actively pursuing the matter with SBI & other lenders and is confident to resolve the matter soon.

As on date, the Company's account is fully regular with all the lenders including SBI and there is no overdue outstanding. Based on the same, some of the lenders have already upgraded the Company's account status to "Standard and Regular” category, while other lenders are considering the upgrade.

* Deferred tax assets on carry forward losses and unabsorbed depreciation is ' 894.15 crore. However, it is recognised to the extent of deferred tax liabilities other than arising on fair valuation of PPE and Investment on conservative basis.

* Pursuant to the Taxation Laws (Amendment) Act, 2019, domestic companies have an option to pay corporate income tax at a concessional rate of 25.17% including surcharge and cess (new tax rate), subject to certain conditions, w.e.f. financial year commencing from April 1, 2019 and thereafter. If the said option is chosen, the company will be exempted from the provisions of Minimum Alternate Tax under section 115JB of Income Tax Act 1961; however the company will have to forego certain prescribed incentives/ deductions.

The Company can choose such option for any year starting from FY 2019-20 or any subsequent year. However, once the said option of paying tax under the new tax rate is chosen, the Company cannot withdraw and go back to the old rates of tax. As at March 31, 2023, the Company has made an evaluation of the impact of the aforesaid option and decided not to opt for the new tax rate for financial year 2022-23. Accordingly, the Company will continue to be governed under the existing tax regime. The Company will re-assess the impact of said option in subsequent financial years and take an appropriate decision for the said years at relevant point of time.

This is a defined benefit plan and statutory liability of the Company. The Company has to pay the Gratuity to the employees as per the provisions of the Payment of Gratuity Act 1972 irrespective of the availability of the funds with the Gratuity Fund.

The Gratuity liability is computed on actuarial valuation basis done at year end using the project unit credit method is provided for in the books of account and is based on a detailed working done by a certified actuary. Past service cost is recognized immediately to the extent that the benefits are already vested.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The Company manages Gratuity obligation through Trust. The Company arranges the fund based on the actuarial valuation and requirement of the Trust.

The expected contributions for Defined Benefit Plan for the next financial year will be '27.57 crore (PY '23.76 crore).

The average duration of the defined benefit plan obligation at the end of the period is 5.17 (PY 5.14). These gratuity plan typically expose the company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Investment risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined with reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary risk

The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

33.2 Defined contribution plan Provident fund

The Company's contribution are made to a Employee Provident Fund Trust. The interest rate payable by the trust to the beneficiaries is notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return on the investments of the trust and the notified interest rate. The actuary has provided a valuation based on the below provided assumptions and there is no shortfall after adjusting receivable as at March 31, 2023.

40 Foreign currency exposure that are not hedged by derivative instruments as on March 31, 2023 amounting to SGD 0.24 crore (P.Y. SGD 0.24 crore) in respect of loan given to subsidiary.

41 As per Ind AS 108- "Operating segment”, segment information has been provided under the notes to consolidated financial statements (refer note 41 to the consolidated financial statements).

1 Related party relationship is as identified by the Company based on the available information.

2 No amount has been written off or written back during the year in respect of debts due from or to related parties except for w/o of Anand Engineering Limited

3 Restructured term loan from banks aggregating to '4,234.37 crore (P.Y. ' 4,778.73 crore)are secured by personal guarantee of Mr.Kushagra Bajaj (Chairman) and corporate guarantee by M/s Bajaj International Realty Private Limited (a promoter group company) and pledge of entire shares held by the promoters of the Company.

4 The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances year-end are unsecured except as stated above and settlement occurs in cash.

5 Fair value of investment in equity shares of Bajaj Aviation Private Limited is ' Nil (P.Y. ' Nil), equity shares of Lalitpur Power Generation Company Limited is ' 2,161.59 crore (P.Y. ' 770.13 crore), ZOCD in Phenil is ' 361.04 crore (P.Y. ' Nil) and equity shares of Bajaj Power venture Private Limited is ' 648.06 crore (P.Y. ' Nil).

43 a) On the request of the Company, the Joint lenders' forum (JLF Lenders) led by State Bank of India has approved the corrective action plan for restructuring of credit facilities on December 03, 2014 under JLF route in accordance with the applicable framework and guidelines issued by Reserve Bank of India. Accordingly a Master Restructuring Agreement (MRA) has been signed on December 30, 2014 among the Company and JLF lenders, by virtue of which the restructured facilities are governed by the provisions specified in the said MRA. The cut- off date for restructuring under JLF route is July 31, 2014.

b) The MRA as well as guidelines of Reserve Bank of India issued on debt restructuring under JLF route give a right to the JLF lenders to get recompense of their waivers and sacrifices made as per corrective action plan. The recompense payable by the company is contingent on various factors including improved performance of the company and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense is treated as a contingent liability. The aggregate present value of recompense till March 31, 2023 payable to the JLF lenders as per MRA is approximately '377.19 crore (PY ' 328.03 crore) for the company.

c) As per terms of above restructuring approved by lenders, the Promoters were required to bring promoter contribution amounting to '200 crore in phased manner till September 2015 in the form of equity capital/preference capital/unsecured loan/other similar instruments. An amount of '200 crore has been brought by promoters as unsecured loan within stipulated period.

d) For restructuring of certain outstanding debts of the company, the Joint lenders' forum (JLF) of the Company adopted the scheme for sustainable structuring of stressed assets (S4A Scheme) with reference date as June 23, 2017, which was approved by the overseeing committee (OC) on November 30, 2017. As per the S4A Scheme, the total fund based debt of ' 8,284.59 crore (including funded interest of ' 354.51 crore), were bifurcated in two parts - 57.81% as Part A (Sustainable Debt) amounting to ' 4,789.34 crore to be serviced as per existing terms and conditions of these debts and remainder 42.19% as Part B (Unsustainable Debt) amounting to ' 3,495.25 crore. While a sum of '12.00 crore has been adjusted against the consideration payable to promoters towards transfer of 11,99,87,344 equity shares, at a price of Re 1/- per equity share, to JLF lenders and the balance ' 3,483.25 crore has been converted into optionally convertible debentures allotted to the JLF lenders. Further the MFA (Master Framework Agreement) has an observation to recover the outstanding loans and advances, as specified in agreement, in phased manner, but no time line has been stipulated.

Promoter / Promoters' group had transferred 11,99,87,344 (10.59%) equity shares, at Re 1/- per equity share, to JLF lenders, resulting in reduction of Promoter holding from 26.02% to 15.43% in accordance with the S4A Scheme.

After the issue of fresh share against conversion of debt the Shareholding of promoters / promoter group increased from 15.43% to 24.95%

45 Financial risk management

The Company's activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.

A Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from trade receivables loan given, advances and deposits with banks. To manage this, the Company periodically assesses the financial reliability of customers, taking into account loan given factors such as credit track record in the market and past dealings with the Company for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. Concentrations of credit risk are limited as a result of the Company's large and diverse customer base. The Company has also taken advances and security deposits from its customers / agents, which mitigate the credit risk to an extent. The ageing of trade receivable is given below.

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the comparative banks with which loan/ term deposits are maintained. Generally, term deposits are maintained with banks with which Company has also availed borrowings.

B Liquidity risk

Liquidity risk is the risk that a Company may encounter difficulties in meeting its obligations associated with financial liabilities that are settled by delivering cash or other financial assets. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs. The table below provides undiscounted cash flows towards financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

C Market risk

The Company is exposed to the risk of movements in interest rates, inventory price and foreign currency exchange rates that affects its assets, liabilities and future transactions. i) Interest rate risk

Fluctuation in fair value or future cash flows of a financial instrument because of changes in market interest rates gives rise to interest rate risk. Almost 100% of the Company's borrowings are linked to SBI base rate of the banks. With all other variables held constant, the following table demonstrates the impact of change in interest rate on borrowing cost on floating rate portion of loans.

ii) Inventory Price risk

The Company is exposed to the movement in price of principal finished product i.e. sugar & alcohol. Prices of the sugar cane is fixed by government. Generally, sugar production is carried out during sugar cane harvesting period from November to April. Sugar is sold throughout the year which exposes the sugar inventory to the movement in the price. The Company monitors the sugar prices on daily basis and formulates the sales strategy to achieve maximum realisation. The sensitivity analysis of the change in sugar price on the inventory as at year end, other factors remaining constant in given in table below:

ini Foreign exchange risk

Foreign currency risk arises commercial transactions that recognised assets and liabilities denominated in a currency that is not Company's functional currency (INR). The Company is not exposed to significant foreign exchange risk at the respective reporting dates.

46 Fair value of financial assets and financial liabilities

Financial instruments measured at fair value can be divided into three levels for determining and

disclosing the fair value of financial instruments by valuation technique.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the

asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the asset or liability that are not based on observable market data.

Following methods and assumptions are used to estimate the fair values:

a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities and short term borrowings carried at amortised cost is not materially different from it's carrying cost largely due to short term maturities of these financial assets and liabilities.

b) Financial instruments with fixed and variable interest rate fall within level 2 of the fair value hierarchy and are evaluated by Company based on parameters such as interest rate, credit rating or assessed credit worthiness.

c) Non-listed shares and other securities fall within level 2 of the fair value hierarchy. Valuation is based on the observable market approach EV/EBIDTA multiple.

d) Fair value of the borrowing items fall within level 2 of the fair value hierarchy and is calculated on the basis of discounted future cash flows.

e) Unlisted debt instruments fall within level 3 of the fair value hierarchy. Valuation is based on discounted cash flow method.

Set out below is a comparison by class of the carrying amounts and fair value of the Company's financial instruments that are recognised in the financial statements.

During the year ended March 31,2023 & March 31,2022 there was transfers between level 2 and level 3 fair value hierarchy.

Investment in equity shares of unlisted company is now shifted from Level 3 to Level 2 based on change in fair valuation approach from NAV to observable market.

Following table shows the reconciliation from the opening balances to the closing balances of the level 3 values.

47 The Company has exposure aggregating to '2,446.66 in its subsidiaries, by way of investments, loans, accumulated interest on these loans. Management is of the view that sufficient efforts are being undertaken to revive the said subsidiaries in the foreseeable future so as to recover carrying value of the investments, loans, and the diminution/provisions, if any exists, is only of temporary nature and accordingly no provision, other than those already accounted for, has been considered necessary. Auditors have drawn emphasis of matter in their audit report. Further on the basis of principle of conservatism and prudence, the Company has not recognised interest income for the year ended on March 31, 2023, of ' 112.43 crore, on inter corporate loans, as and when it is realized it will be recognized in the books.

48 The Company has not entered into any transactions with the companies struck off under 248 of the Companies Act 2013 or under section 560 of Companies Act 1956, and does not carry any balance/(s) outstanding to or from any such entity.

50 The Company and its erstwhile subsidiary Bajaj Hindusthan Sugar & Industries Limited (BHSIL, merged with the Company in 2010) had made requisite minimum capital investment and established an aggregate of 11 new sugar mills and 4 distillery units and also expanded capacity of sugar mills during the years 2004 to 2008. All those mills were established & commercial production started within the time prescribed under the policy i.e. 31st March, 2008. As per the Sugar Industry Promotion Policy, 2004 announced by the Government of Uttar Pradesh, the Company was entitled to various benefits in the form of grant of certain exemptions / incentives as also reimbursements of certain expenses and capital subsidy, available to the eligible entrepreneurs based on the requisite investments in setting up new mills and on capacity expansion of sugar units in state of U.P. On making the requisite investment within prescribed period of implementation, the "Eligibility Certificate” has already been received for the Company and further procedural instructions have also been issued by the State authorities to file information through each jurisdictional authority in the respective districts to allow the benefits to the 7 new sugar mills and 3 distilleries on starting their commercial production. However the same is awaited for 1 Sugar unit of BHSL and 3 new sugar mills, 1 distillery and for expansion of 1 mill of erstwhile BHSIL. All the claims have been filed by the Company within stipulated time as per the scheme. Till date the Company has also availed & received partial benefits including reimbursement of capital subsidy amount. However, due to an abrupt withdrawal / discontinuation of policy in the year 2007, the balance amount of benefits and the eligibility certificate and procedural instructions to file information in respect of these 4 new sugar mills and one distillery and further for expansion of one mill of erstwhile subsidiary BHSIL (subsequently merged with the company) is held up. Consequently, the Current Assets include a sum of '592.38 crore towards the aforesaid claims under 2004 Policy. Since the authorities started denying the benefits so the company challenged it in the Hon'ble High Court of Allahabad all such denial orders of the Government based on the abrupt

withdrawal / discontinuing the policy with effect from 04.06.2007. Basically the withdrawal of the policy w.e.f. 04.06.2007 was a preponing process of date of completion of projects i.e. 31.03.2008 which otherwise was not relevant in the case of the Company since it has already completed the installation and started the commercial production within the prescribed date and became eligible to avail the benefits as envisaged. The Hon'ble High Court upheld the stand of the Company and further held that the withdrawal of sugar promotion policy was arbitrary and without the application of mind. The Government of U.P. preferred to file an SLP before the Hon'ble Supreme Court against the orders of the Hon'ble High Court of Allahabad. The Hon'ble Supreme Court turned down the stand of the Government of U.P. and declined to interfere in the order of the Hon'ble High Court vide its order dated 07.03.2018.

Given the series of orders, and finally, from the Hon'ble Supreme Court, the Company again approached the Cane Commissioner of U.P. for release of its claims. The Cane Commissioner vide its letter dated 07.06.2018 asked the Company to re-submit the claim papers again in the office of Cane Commissioner. The Company again filed all the complete claim papers in the prescribed formats along with a detailed representation.

The Company regularly followed up with the office of Cane Commissioner for settlement of its claims; and because of unreasonable delay in settlement of the company's claims, the Company filed a contempt petition in the Hon'ble Supreme Court. The Cane Commissioner declined the claim of the Company on unfounded grounds.

In the contempt petition filed by the Company in Hon'ble Supreme Court, the Court expressed the view that the matter involves issues which cannot be determined while exercising contempt jurisdiction. Hence the petitioner (the Company), may approach the Court having original jurisdiction for the matter. The Company has filed the writ petition in the Hon'ble High Court of Allahabad; presently the matter is sub-judice in the Hon'ble High Court of Allahabad.

51 The Company is covered under section 135(1) of the Companies Act 2013. However the average net profits of the Company during the three immediately preceding years is negative, accordingly CSR spending as mentioned in Section 135(5) is not applicable to the Company for the year 2022-2023.

52 The Company during the current year and in last few years have positive EBITDA (Earnings before interest, taxes depreciation and amortisation) however have incurred losses at PAT (Profit after Tax) level. The losses were mainly attributable to high raw material (i.e., sugarcane prices) and other inputs costs, relatively lower realization of sugar, higher depreciation, and finance expenses.

While cane prices are fixed by the State Government, sugar prices are totally market driven and are dependent on demand supply dynamics which at times lead to a complete mismatch between the cane price and sugar prices. To mitigate the said sugar price risk, Government had fixed Minimum Selling Price (MSP) of Sugar at ' 31 per kg below which no sugar mills can sell sugar in market. Industry, Indian Sugar Mills Association (ISMA), National Federation of Co-operative Sugar Factories (NFCSF) are advocating for an increase in MSP to the level of ' 38-40 per kg which the government will have to implement at the earliest. Also, the Government has implemented monthly release mechanism to regulate sugar supplies in the market so that prices remain firm.

Further, a sizeable portion of cane/sugar is diverted towards manufacturing of ethanol. There is a big push from the Government side to increase the ethanol production which will boost up the sugar Industry scenario and will have a positive impact both on sugar realisation and ethanol production, increased ethanol prices etc. Presently, the Government has put a great thrust on promoting ethanol production and has planned to increase the ethanol blending in petrol up to 20% by 2025. Ethanol will turn around the economic dynamics of the sugar industry positively.

The Company's investment in equity shares of group's power business have good potential of an upside as per its fair value resulting into improvement in the net worth of the Company.

BHSL is the largest integrated Sugar and Ethanol manufacturing company in India with 14 sugar factories (1.36,000 TCD) , 6 Distilleries (800 KLD) and cogeneration (449 MW) facilities and crushes around 14% of the total sugar cane grown in the State of Uttar Pradesh. The Company has huge potential for improvement and growth due to its scale, size and vintage.

The Company is continuously striving to improve its operational efficiency and operating parameters by way of improvement in sugar recovery, increase in production of alcohol/ ethanol by using B heavy molasses, increase in revenue of by-products by improved realisations, saving in bagasse, increase

in cogen export etc, reduction of overheads, finance, other costs and monetization of certain noncore assets etc.

The Company is leaving no stone unturned including regular interaction with farmers, putting effort on cane development activities, awareness for better farm practices, cane variety propagations, etc to increase its cane availability of good quality.

The debt restructuring as per RBI's S4A Scheme has somewhat improved the Company's liquidity position. However, keeping in view the status of outstanding cane dues and funds for servicing debt obligations, the Company is further discussing with the lenders a debt resolution plan to have a lasting solution to improve its liquidity. The resolution plan envisages reduction of its overall debt, realignment of its capital structure, payment of cane dues of farmers, increasing cane availability and supply etc. The Company is also exploring/ evaluating various options for corporate restructuring to streamline the business and enhance the Company's value.

The Government has also taken various measures to improve the financial health of the sugar industry in recent past, by allocating sugar export quota, fixing MSP for sugar, boost to ethanol production by facilitating new capacities in country by giving soft loans, subsidies, increased blending, guaranteed lifting etc so that the excess sugar production can be diverted towards ethanol.

The Company has plans to improve its quality of sugar also by improving upon color (ICUMSA) of sugar, increasing refined sugar capacity, entering branded sugar segment, increasing sale to Institutionalbuyers whichwill give betterbrand equity to sugarwith improved realization i.e., pushing from commodity to brand. All these measures are expected to turn around the operations of the sugar industry on a sustainable basis. The Company also expects to receive accrued benefits of ' 1,758 Cr including interest as on March 31,2023, under the Sugar Industries Promotion Policy 2004 for which it is entitled as per court orders but presently, the matter is sub-judice.

In view of the above, the management expects to generate positive cash flow from operation. Accordingly, the financial statements are presented on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the ordinary course of business. This matter has been referred by auditors in their audit report.

53 Capital Management

There has not been any change in its objectives, policies and processes for managing capital from previous year. The Company is not subject to any externally imposed capital requirements.

1 Current ratio: Current ratio decrease by 15.50% mainly due to reduction in loans and advances given to others, reduction in trade receivable and lower inventory.

2 Debt equity ratio: Debt equity ratio improve by 43.30% mainly due to repayment of borrowings and improvement in net worth.

3 Debt service coverage ratio: Debt service coverage ratio decrease by 11.88% mainly due to outstanding coupon interest on OCD as on 31.03.2022 and partial instalment of March 2022 was paid ware paid during the current year FY 2022-23.

4 Return on equity ratio: Return on equity ratio increase by 46.60% mainly due to reduction in loss after taxes.

5 Trade receivable ratio: Trade receivable ratio improve by 37.63% mainly due to decrease in closing trade receivable and increase in turnover.

6 Net capital turnover ratio: Net capital turnover ratio increase by 130.19% being working capital change from positive to negative in FY 2022-23 mainly due to decrees in current assets - lower trade debtors, inventory and loans and advances given.

7 Net profit ratio: Net profit ratio improved by 39.22% due to increase in sale and decrease in loss after tax.

8 Return on capital employed (ROCE): ROCE improved by 65.16% due to increase in earing before interest and taxes (EBIT).

55 Additional disclosure requirement as per schedule III:

a) No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ('Intermediaries'), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b) No funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities ('Funding Parties'), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

d) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

e) The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961.

56 Events after reporting date:

There have been no events after the reporting date that requires disclosure in standalone financial statements.

57 The financial statements were approved for issue by the Board of Directors, at its meeting held on May 29, 2023

58 Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosures.