(x) Provisions

Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the
consideration required to settle the present obligation
at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligation.
When the effect of the time value of money is material,
provision is measured at the present value of cash flows
estimated to settle the present obligation. When some or
all of the economic benefits required to settle a provision
are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of
the receivable can be measured reliably. Provisions are
reviewed at each balance sheet date.

(xi) Employee benefits

(a) Post-employment obligations

The Company operates the following post¬
employment schemes:

• defined benefit plans towards payment of
gratuity; and

• defined contribution plans towards employees'
provident fund & employee pension scheme,
employees' state insurance, superannuation
scheme and national pension scheme.

Defined benefit plan

The liability or asset recognised in the balance sheet
in respect of the defined benefit plan is the present
value of the defined benefit obligation at the end
of the reporting period less the fair value of plan
assets. The present value of the defined benefit
obligation is determined using projected unit credit
method by discounting the estimated future cash
outflows with reference to market yield at the end
of the reporting period on government bonds that
have maturity terms approximating the estimated
term of the related obligation, through actuarial
valuations carried out at the end of each annual
reporting period.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
Such net interest cost along with the current service
cost and, if applicable, the past service cost and
settlement gain/loss, is included in employee
benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions, comprising actuarial gains/losses
and return on plan assets (excluding the amount
recognised in net interest on the net defined liability),
are recognised in the period in which they occur,
directly in other comprehensive income. They are
included in retained earnings in the statement of
changes in equity and in the balance sheet.

(b) Other long-term employee benefit obligations

Other long-term employee benefits include earned
leaves and sick leaves. The liabilities for earned
leaves and sick leaves are not expected to be
settled wholly within twelve months after the end
of the period in which the employees render the
related service. They are therefore measured at
the present value of expected future payments
to be made in respect of services provided by
employees up to the end of the reporting period
using the projected unit credit method, with
actuarial valuations being carried out at the end
of each annual reporting period. The benefits are
discounted using the market yield on government
bonds at the end of the reporting period that have
maturity term approximating to the estimated term

of the related obligation. Remeasurements as a
result of experience adjustments and changes in
actuarial assumptions are recognised in profit or
loss. The obligations are presented as provisions in
the balance sheet.

(xii) Financial assets

(a) Classification

The Company classifies its financial assets in the
following measurement categories:

• t hose to be measured subsequently at fair
value (either through other comprehensive
income, or through profit or loss), and

• those measured at amortised cost.

The classification depends on the Company's
business model for managing the financial assets
and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses
will either be recorded in profit or loss or other
comprehensive income. For assets in the nature of
debt instruments, this will depend on the business
model. For assets in the nature of equity instruments,
this will depend on whether the Company has
made an irrevocable election at the time of initial
recognition to account for the equity instrument at
fair value through other comprehensive income.

The Company reclassifies debt instruments when
and only when its business model for managing
those assets changes.

(b) Measurement

At initial recognition, the Company measures a
financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss,
transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs
of financial assets carried at fair value through profit
or loss are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments
depends on the Company's business model for
managing the asset and the cash flow characteristics
of the asset. There are three measurement

categories into which the Company classifies its
debt instruments:

• Amortised cost: Assets that are held for
collection of contractual cash flows where
those cash flows represent solely payments
of principal and interest are measured at
amortised cost. A gain or loss on a debt
investment that is subsequently measured at
amortised cost is recognised in profit or loss
when the asset is derecognised or impaired.
Interest income from these financial assets
is recognised using the effective interest
rate method.

• Fair value through other comprehensive
income (FVTOCI): Assets that are held for
collection of contractual cash flows and for
selling the financial assets, where the assets'
cash flows represent solely payments of
principal and interest, are measured at FVTOCI.
Movements in the carrying amount are taken
through OCI, except for the recognition of
impairment gains or losses, interest income and
foreign exchange gains and losses which are
recognised in profit or loss. When the financial
asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in
other gains/(losses). Interest income from these
financial assets is included in other income
using the effective interest rate method.

• Fair value through profit or loss (FVTPL):

Assets that do not meet the criteria for
amortised cost or FVTOCI are measured at
fair value through profit or loss. A gain or loss
on a debt investment that is subsequently
measured at fair value through profit or loss is
recognised in profit or loss and presented net
in the statement of profit and loss within other
gains/(losses) in the period in which it arises.
Interest income from these financial assets is
included in other income.

Equity instruments

The Company subsequently measures all equity
investments at fair value, except for equity

investments in subsidiaries, associates and joint
ventures where the Company has the option to
either measure it at cost or fair value. The Company
has opted to measure equity investments in
subsidiaries, associates and joint ventures at cost
hence investments in subsidiaries, associates and
joint ventures are carried at cost less impairment,
if any. Where the Company's management has
elected to present fair value gains and losses on
equity investments in other comprehensive income,
there is no subsequent reclassification of fair value
gains and losses to profit or loss. Dividends from
such investments are recognised in profit or loss as
other income when the Company's right to receive
payments is established.

(c) Impairment of financial assets

In accordance with Ind AS 109 Financial
Instruments, the Company applies expected credit
loss (ECL) model for measurement and recognition
of impairment loss associated with its financial
assets carried at amortised cost and FVTOCI
debt instruments.

For trade receivables or any contractual right to
receive cash or another financial asset that result
from transactions that are within the scope of Ind
AS 115 Revenue from Contracts with Customers,
the Company applies simplified approach permitted
by Ind AS 109 Financial Instruments, which requires
expected life time losses to be recognised after
initial recognition of receivables. For recognition
of impairment loss on other financial assets and
risk exposure, the Company determines whether
there has been a significant increase in the credit
risk since initial recognition. If credit risk has not
increased significantly, twelve months ECL is used
to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then
the entity reverts to recognising impairment loss
allowance based on twelve-months ECL.

ECL represents expected credit loss resulting from
all possible defaults and is the difference between all
contractual cash flows that are due to the Company

in accordance with the contract and all the cash
flows that the entity expects to receive, discounted at
the original effective interest rate. While determining
cash flows, cash flows from the sale of collateral
held or other credit enhancements that are integral
to the contractual terms are also considered.

ECL is determined with reference to historically
observed default rates over the expected life of the
trade receivables and is adjusted for forward looking
estimates. Note 41 (i) details how the Company
determines expected credit loss.

(d) Derecognition of financial assets

A financial asset is derecognised only when
the Company

• has transferred the rights to receive cash flows
from the financial asset; or

• r etains the contractual rights to receive the
cash flows of the financial asset, but assumes
a contractual obligation to pay the cash flows
to one or more recipients.

Where the Company has transferred an asset, it
evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset.
In such cases, the financial asset is derecognised.
Where the Company has not transferred substantially
all risks and rewards of ownership of the financial
asset, the financial asset is not derecognised.

Where the Company has neither transferred a
financial asset nor retained substantially all risks
and rewards of ownership of the financial asset, the
financial asset is derecognised if the Company has
not retained control of the financial asset. Where the
Company retains control of the financial asset, the
asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

On derecognition of a financial asset in its entirety,
the difference between the asset's carrying amount
and the sum of the consideration received and
receivable and the cumulative gain or loss that had
been recognised in other comprehensive income
and accumulated in equity is recognised in profit
or loss if such gain or loss would have otherwise
been recognised in profit or loss on disposal of that
financial asset.

On derecognition of a financial asset other than
in its entirety, the Company allocates the previous
carrying amount of the financial asset between the
part it continues to recognise under continuing
involvement, and the part it no longer recognises
on the basis of the relative fair values of those parts
on the date of the transfer. The difference between
the carrying amount allocated to the part that is no
longer recognised and the sum of the consideration
received for the part no longer recognised and any
cumulative gain or loss allocated to it that had
been recognised in other comprehensive income
is recognised in profit or loss if such gain or loss
would have otherwise been recognised in profit or
loss on disposal of that financial asset. A cumulative
gain or loss that had been recognised in other
comprehensive income is allocated between the
part that continues to be recognised and the part
that is no longer recognised on the basis of the
relative fair values of those parts.

(e) Effective interest method

The effective interest method is a method of
calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts
through the expected life of the financial asset to
the gross carrying amount of a financial asset. When
calculating the effective interest rate, the Company
estimates the expected cash flows by considering
all the contractual terms of the financial instrument
but does not consider the expected credit losses.
Income is recognised on an effective interest basis
for debt instruments other than those financial
assets classified as at FVTPL.

(xiii) Financial liabilities and equity instruments

(a) Classification

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial
liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities.

Financial liabilities

The Company classifies its financial liabilities in the
following measurement categories:

• t hose to be measured subsequently at fair
value through profit or loss, and

• those measured at amortised cost.

Financial liabilities are classified as at FVTPL
when the financial liability is held for trading or it
is designated as at FVTPL, other financial liabilities
are measured at amortised cost at the end of
subsequent accounting periods.

(b) Measurement

Equity instruments

Equity instruments issued by the Company are
recognised at the proceeds received. Transaction
cost of equity transactions shall be accounted for
as a deduction from equity.

Financial liabilities

At initial recognition, the Company measures a
financial liability at its fair value net of, in the case of
a financial liability not at fair value through profit or
loss, transaction costs that are directly attributable
to the issue of the financial liability. Transaction costs
of financial liability carried at fair value through profit
or loss are expensed in profit or loss.

Subsequent measurement of financial liabilities
depends on the classification of financial liabilities.
There are two measurement categories into which
the Company classifies its financial liabilities:

• Fair value through profit or loss (FVTPL):

Financial liabilities are classified as at FVTPL
when the financial liability is held for trading or it
is designated as at FVTPL. Financial liabilities at
FVTPL are stated at fair value, with any gains or
losses arising on remeasurement recognised in
profit or loss.

• Amortised cost: Financial liabilities that are
not held-for-trading and are not designated as
at FVTPL are measured at amortised cost at
the end of subsequent accounting periods.
The carrying amounts of financial liabilities that
are subsequently measured at amortised cost
are determined based on the effective interest
method. Interest expense that is not capitalised
as part of costs of an asset is included in the
‘Finance costs' line item.

(c) Derecognition
Equity instruments

Repurchase of the Company's own equity
instruments is recognised and deducted directly in
equity. No gain or loss is recognised in profit or loss
on the purchase, sale, issue or cancellation of the
Company's own equity instruments.

Financial liabilities

The Company derecognises financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or have expired. An
exchange with a lender of debt instruments with
substantially different terms is accounted for as an
extinguishment of the original financial liability and
the recognition of a new financial liability. Similarly,
a substantial modification of the terms of an existing
financial liability (whether or not attributable to the
financial difficulty of the debtor) is accounted for as
an extinguishment of the original financial liability
and the recognition of a new financial liability. The
difference between the carrying amount of the
financial liability derecognised and the consideration
paid and payable is recognised in profit or loss.

(d) Effective interest method

The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
through the expected life of the financial liability to
the gross carrying amount of a financial liability.

(e) Foreign exchange gains and losses

For financial liabilities that are denominated in a
foreign currency and are measured at amortised

cost at the end of each reporting period, the foreign
exchange gains and losses are determined based
on the amortised cost of the instruments and are
recognised in ‘Other income'. The fair value of
financial liabilities denominated in a foreign currency
is determined in that foreign currency and translated
at the spot rate at the end of the reporting period.

(xiv) Derivatives and hedging activities

The Company undertakes transactions involving
derivative financial instruments, primarily foreign
exchange forward contracts, to manage its exposure to
foreign exchange risks.

Derivatives are initially recognised at fair value at the
date the relevant contracts are entered into and are
subsequently remeasured at their fair value at the end
of each reporting period. The resulting gain or loss is
recognised in profit or loss immediately unless the
derivative is designated and effective as a hedge, in
which event the timing of the recognition in profit or loss
depends on the nature of the hedging relationship and
the nature of the hedged item.

Fair value hedges

The Company designates certain derivative instruments
as fair value hedges to mitigate the foreign exchange
risk of changes in the fair value of a recognized asset or
liability, or an unrecognized firm commitment. Changes
in fair value of the designated portion of derivatives that
qualify as fair value hedges are recognized in profit and
loss immediately, together with any changes in the fair
value of the hedged asset or liability that are attributable to
the hedged risk. When a hedged item is an unrecognized
firm commitment to acquire an asset or assume a liability,
the cumulative change in the fair value of the hedged item,
subsequent to its designation, is recognized as an asset
or a liability with a corresponding gain or loss recognized
in profit or loss. The initial carrying amount of the asset
or liability that results from meeting the firm commitment
is adjusted to include the cumulative change in the fair
value of the hedged item that was recognized in the
balance sheet.

Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated or exercised, or
when it no longer qualifies for hedge accounting. The fair
value adjustment to the carrying amount of the hedged

item arising from the hedged risk is amortized to the profit
and loss from that date.

Cash flow hedges

The Company designates certain derivative instruments
as cash flow hedges to hedge the foreign exchange
risk relating to the cash flows attributable to certain firm
commitments / highly probable forecast transactions.
At the inception of the hedge relationship, the Company
documents the relationship between the hedging
instrument and the hedged item, along with its risk
management objectives and strategy. Furthermore, at
the inception of the hedge and on an ongoing basis,
the Company assesses the effectiveness of the hedging
instrument in offsetting changes in expected cash flows
of the hedged item attributable to the hedged risk. The
effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges
is recognised in other comprehensive income and
accumulated under cash flow hedging reserve within
equity. The gain or loss relating to the ineffective portion
is recognised immediately in the statement of profit and
loss. In case the Company opts to designate only the
changes in the spot element of a foreign currency forward
contract as a cash flow hedge, the changes in the forward
element of the relevant forward contract, is recognised
in other comprehensive income and accumulated under
cost of hedging reserve within equity, to the extent such
forward element is aligned with the critical terms of the
hedged item. The changes in the forward element of
the relevant forward contract which is not so aligned,
is recognised immediately in the statement of profit
and loss.

Amounts previously recognised in other comprehensive
income and accumulated in equity relating to effective
and /or aligned portion (as described above) of the cash
flow hedges are reclassified to the statement of profit
or loss in the periods when the hedged item affects the
statement of profit and loss.

Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, or exercised, or
when it no longer qualifies for hedge accounting. Any gain
or loss recognised in other comprehensive income and
accumulated in equity at that time remains in equity and
is recognised when the forecast transaction is ultimately
recognised in the statement of profit and loss. When

a forecast transaction is no longer expected to occur,
the gain or loss accumulated in equity is recognised
immediately in the statement of profit and loss.

(xv) Financial guarantee contracts

Financial guarantee contracts are recognised as a
financial liability at the time the guarantee is issued. The
liability is initially measured at fair value and subsequently
at the higher of (i) the amount of expected credit loss; and

(ii) the amount initially recognised less, where appropriate,
cumulative amount of income recognised.

The fair value of financial guarantees is determined based
on the present value of the difference in cash flows
between the contractual payments required under the
debt instrument and the payments that would be required
without the guarantee or the estimated amount that would
be payable to a third party for assuming the obligations.

Where guarantees in relation to loans of subsidiary
company are provided for no compensation, the fair
values are accounted for as contributions and recognised
as part of the cost of the investment.

Note 3: Critical accounting judgements and
key sources of estimation uncertainty

The preparation of financial statements requires the use of
accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement
in applying the Company's accounting policies.

This note provides an overview of the areas that involved a
higher degree of judgement or complexity, and of items which
are more likely to be materially adjusted due to estimates
and assumptions turning out to be different than those
originally assessed.

Estimates and judgements are continually evaluated. They are
based on historical experience and other factors, including
expectations of future events that may have a financial impact
on the Company and that are believed to be reasonable under
the circumstances.

(i) Critical accounting judgements

Following are the areas which involved complex and

subjective judgements:

(a) Incentives under the U.P. Sugar Industry
Promotion Policy, 2004

I n a writ petition filed by the Company against the
illegal withdrawal of U.P. Sugar Industry Promotion
Policy, 2004 (“the Policy”) by the State Government
of Uttar Pradesh, the Hon'ble Allahabad High Court
had decided the matter in favour of the Company
and directed the State Government to quantify and
pay all the incentives that were promised under the
said Policy. The State Government however filed a
Special Leave Petition before the Hon'ble Supreme
Court challenging the decision of the Hon'ble High
Court against it.

While the case was sub-judice, the Company
continued to avail and account for the remissions
of statutory levies and duties aggregating to ' 41.58
crores, which it was entitled to under the Policy, in
accordance with the interim directions of the High
Court. Based on the aforesaid decision of Hon'ble
Allahabad High Court in its favour, the Company
shall continue to pursue its claim of ' 113.75 crores
filed towards one time capital subsidy and its claims
towards other incentives by way of reimbursements
against specified expenses aggregating to ' 130.16
crores, by filing necessary documents for the
verification of the State Government authorities.
The aforesaid amounts do not include any interest
towards delayed settlement.

I n view of uncertainties involved on account of the
fact that the State Government has challenged the
decision rendered against it and since the process
of verification and quantification of claims by the
State Government for the incentive period of 10
years is yet to be taken up, the Company has not
recognised the above benefits/incentives receivable
under the Policy.

(ii) Key sources of estimation uncertainty

Following are the key assumptions concerning the future,
and other key sources of estimation uncertainty at the
end of the reporting period that may have a significant risk
of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year:

(a) Fair value measurements and valuation
processes

Some of the Company's assets and liabilities
are measured at fair value for financial reporting
purposes. When the fair values of these assets and
liabilities cannot be measured based on quoted
prices in active markets, their fair value is measured
using valuation techniques by engaging third party
qualified external valuers or internal valuation
team to perform the valuation. The inputs to these
models are taken from observable markets where
possible, but where this is not feasible, a degree
of judgement is required in establishing fair values.
Judgements include considerations of inputs such
as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the
reported fair value of financial instruments. See note
5, 7, 10, 22 and 42 for further disclosures.

(b) Employee benefit plans

The cost of employee benefits under the defined
benefit plan and other long term employee benefits
as well as the present value of the obligation
there against are determined using actuarial
valuations. An actuarial valuation involves making
various assumptions that may differ from actual
developments in the future. These include the
determination of the discount rate, future salary
increases, attrition and mortality rates. Due to the
complexities involved in the valuation and its long¬
term nature, obligation amount is highly sensitive to
changes in these assumptions.

The parameter most subject to change is the discount
rate. In determining the appropriate discount rate
for plans, the management considers the market
yields on government bonds with a maturity term
that is consistent with the term of the concerned
defined benefit obligation. Future salary increases

are based on expected future inflation rates and
expected salary trends in the industry. Attrition rates
are considered based on past observable data of
employees leaving the services of the Company. The
mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only at
intervals in response to demographic changes. See
note 38 for further disclosures.

(c) Impairment of financial and non-financial
assets

The Company has a stringent policy of ascertaining
impairment, if any, of financial assets as a result
of detailed scrutiny of major cases and through
determining expected credit losses. Despite
best estimates and periodic credit appraisals of
customers, the Company's receivables are exposed
to delinquency risks due to material adverse changes
in business, financial or economic conditions that are
expected to cause a significant change to the party's
ability to meet its obligations. All such parameters
relating to impairment or potential impairment are
reviewed at each reporting date. See note 41 (i) for
further disclosures.

In case of non-financial assets, assessment of
impairment indicators involves consideration of
future risks. Further, the Company estimates asset's
recoverable amount, which is higher of an asset's/
Cash Generating Units (CGU's) fair value less costs
of disposal and its value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent
market transactions are taken into account, if no
such transactions can be identified, an appropriate
valuation model is used.

(d) Revenue and cost estimation for long-duration
construction & supply contracts

The revenue recognition pertaining to long-duration
construction & supply contracts are determined on
proportionate completion method based on actual
contract costs incurred till balance sheet date

and total budgeted contract costs. An estimation
of total budgeted contract cost involves making
various assumptions that may differ from the actual
developments in the future. These include delays
in execution due to unforeseen reasons, inflation
rate, future material rates, future labour rates etc.
The estimates/assumptions are made considering
past experience, market/inflation trends and
technological developments etc. All such estimates/
assumptions are reviewed at each reporting date.

(e) Provision for warranty claims

The Company, in the usual course of sale of its
products, provides warranties on certain products
and services, undertaking to repair or replace
the items that fail to perform satisfactorily during
the specified warranty period. Provisions made
represent the amount of expected cost of meeting
such obligations of rectifications / replacements
based on best estimate considering the historical
warranty claim information and any recent trends
that may suggest future claims could differ from
historical amounts. The assumptions made in
relation to the current period are consistent with
those in the prior years.

(f) Provision for litigations and contingencies

The provision for litigations and contingencies
are determined based on evaluation made by the
management of the present obligation arising from
past events the settlement of which is expected to
result in outflow of resources embodying economic

benefits, which involves judgements around
estimating the ultimate outcome of such past events
and measurement of the obligation amount.

(g) Useful life and residual value of plant, property
equipment and intangible assets

The useful life and residual value of plant, property
equipment and intangible assets are determined
based on technical evaluation made by the
management of the expected usage of the asset, the
physical wear and tear and technical or commercial
obsolescence of the asset. Due to the judgements
involved in such estimations, the useful life and
residual value are sensitive to the actual usage in
future period.

(h) Current taxes and deferred taxes

Significant judgement is required in determination
of taxability of certain incomes and deductibility
of certain expenses during the estimation of the
provision for income taxes.

Deferred tax assets are recognised for deductible
temporary differences and carry forward of unused
tax losses and tax credits to the extent that it is
probable that taxable profit would be available
against which such deferred tax assets could be
utilised. Significant management judgement is
required to determine the amount of deferred tax
assets that can be recognised, based upon the likely
timing and the level of future taxable profits together
with future tax optimisation strategies.

Notes:

(i) Leasehold land

Comprises certain land acquired under agreements on perpetual lease terms from the Government and accordingly,
classified and accounted for under Ind AS 16 Property, Plant and Equipment. Under the terms of the perpetual lease
agreements, the Company has the right to sublet/ sub-lease/ assign/ transfer such land except in case of one perpetual
lease relating to a small parcel of land where prior approval of the specified authority is required.

(ii) Restrictions on Property, plant and equipment

Refer note 17(i) & 20(i) for information on charges created on property, plant and equipment. Other adjustments in respect
of freehold land in previous year were in view of legal constraints in perfecting title in favour of the Company.

(iii) Contractual commitments

Refer note 45 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iv) Capital work-in-progress

Capital work-in-progress mainly comprises of expansion of gear manufacturing facility of Power transmission business
at Mysuru.

(i) Information about individual provisions and significant estimates

(a) Warranty

The Company provides warranties on certain products, undertaking to repair or replace the items that fail to perform
satisfactorily during the warranty period. Provisions made represent the amount of expected cost of meeting such
obligations of rectifications / replacements based on best estimate considering the historical warranty claim information
and any recent trends that may suggest future claims could differ from historical amounts. It also includes provisions
made towards contractual obligations to replace certain parts under an Operation and Maintenance (O&M) contract.
The timing of the outflows is expected to be within a period of two years except outflow towards cost of membranes
during O&M period which may exceed two years depending upon operational requirements.

(b) Cost to completion

The provision represents costs of materials and services further required for construction contracts upon full recognition
of revenue.

(c) Arbitration / Court-case claims

Represents the provision made towards certain claims awarded against the Company in legal proceedings which have
been challenged by the Company before appropriate authorities. The timing of the outflows is uncertain.

(i) Basic earnings per share is calculated by dividing the
profit attributable to owners of the Company by the
weighted average number of equity shares outstanding
during the financial year, adjusted for bonus elements in
equity shares issued during the year, if any, and excluding
treasury shares, if any.

(ii) Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account the after income tax effect of interest and
financing costs associated with dilutive potential equity
shares and the weighted average number of additional
equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.

Note 37: Segment information
(i) Description of segments and principal
activities

The operating segments are classified under two major
businesses which the Company is engaged in, and are
briefly described as under:

Sugar & Allied Businesses

(a) Sugar : The Company is a manufacturer of white
crystal sugar, having seven manufacturing plants
situated in the state of Uttar Pradesh. The sugar
is sold to wholesalers and institutional users as
well as in the export market. The Company uses
its captively produced bagasse, generated as a by¬
product in the manufacturing of sugar, as a feed
stock for generating power. Apart from meeting
the captive power requirements of sugar plants
and distilleries, the surplus power is exported to
the state grid. Molasses, another by-product in the
manufacturing of sugar, is used as raw material for
producing alcohol/ethanol. The Company sells the
surplus molasses and bagasse after meeting its
captive requirements.

(b) Distillery : The Company operates five distilleries with
an aggregate capacity of 860 kilo-litres per day, all

located in the state of Uttar Pradesh, to produce
ethanol and extra neutral alcohol, by using a variety
of feedstocks. As a measure of forward integration
of distillery operations, the Company also produces
potable liquor, both Indian Made Indian Liquor (IMIL
or Country Liquor) and Indian Made Foreign Liquor
(IMFL) under its own brands.

Engineering Businesses

(a) Power transmission : This business segment is
focused on manufacturing of high speed and niche
low speed gears & gear boxes covering supply
to OEMs, after market services and retrofitment
of gearboxes, catering to the requirement of
power sector, other industrial segments and
defence. The manufacturing facility is located at
Mysore, Karnataka.

(b) Water/Wastewater treatment : The business
segment operates from Noida, Uttar Pradesh and
provides engineered-to-order process equipment
and comprehensive solutions in the water and
wastewater management. This segment includes
EPC contracts, Equipment supply and Operations
& Maintenance contracts.

The ‘Other Operations' mainly include selling sugar under
the Company's brand name/private label; and retailing of
diesel/petrol through a Company operated fuel station.

The above reportable segments have been identified
based on the significant components of the enterprise
for which discrete financial information is available and
reviewed by the chief operating decision maker (CODM)
to assess the performance and allocate resources to the
operating segments.

There are no geographical segments as the volume of
exports is not significant and the major turnover of the
Company takes place indigenously. There is no major
reliance on few customers or suppliers.

Note 38: Employee benefit plans
(i) Defined contribution plans

(a) The Company contributes to certain defined contribution retirement benefit plans under which the Company pays fixed
contributions to separate entities (funds) or financial institutions or state managed benefit schemes. The Company
has no further payment obligations once the contributions have been paid. Following are the schemes covered under
defined contributions plans of the Company:

Provident Fund Plan & Employee Pension Scheme: The Company makes monthly contributions at prescribed
rates towards Employee Provident Fund/ Employee Pension Scheme administered and managed by the Government
of India.

Employee State Insurance: The Company makes prescribed monthly contributions towards Employees State
Insurance Scheme.

Superannuation Scheme: The Company contributes towards a fund established to provide superannuation benefit
to certain employees in terms of Group Superannuation Policies entered into by such fund with the Life Insurance
Corporation of India.

National Pension Scheme: The Company makes contributions to the National Pension Scheme fund in respect of
certain employees of the Company.

(ii) Defined benefit plan (Gratuity)

(a) The Company operates a defined benefit retirement plan under which the Company pays certain defined benefit by
way of gratuity to its employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement/
termination of employment or upon death of an employee, based on the respective employees' salary and years of
employment with the Company.

(b) Risk exposure

The plan typically exposes the Company to number of actuarial risks, the most significant of which are detailed below:

Investment risk: The plan liabilities are calculated using a discount rate set with references to government bond yields
as at end of reporting period; if plan assets underperform compared to the government bonds discount rate, this will
create or increase a deficit.

Interest risk: A decrease in government bond yields will increase plan liabilities, although this is expected to be partially
offset by an increase in the value of the plan's debt instruments.

The remuneration of key management personnel is determined by the remuneration committee having regard to the
performance of individuals, market trends and applicable provisions of Companies Act, 2013.

(iv) Remuneration and outstanding balances of key management personnel does not include long term employee benefits by
way of gratuity and compensated absences, which are payable only upon cessation of employment and provided on the
basis of actuarial valuation by the Company.

(v) The Company has provided corporate guarantees amounting to ' 521 crores (31 March 2024: ' 158 crores) in connection
with loans agreed to be granted by the lender to wholly owned subsidiaries of the Company. Outstanding balance of loans
under such lending arrangements as at 31 March 2025 is ' 250.97 crores (31 March 2024: ' 86.35 crores).

(vi) Terms & conditions:

(a) Transactions relating to dividends were on same terms and conditions that applied to other shareholders.

(b) Loans to subsidiaries were given at normal commercial terms & conditions at prevailing market rate of interest.

(c) Other transactions are made on terms equivalent to those that prevail in arm's length transactions.

(d) The outstanding balances at the year-end are unsecured and settlement to take place in cash.

Note 40: Capital management

For the purpose of capital management, capital includes net debt and total equity of the Company. The primary objective of the
capital management is to maximize shareholders' value along with an objective to keep the leverage in check in view of cyclical
and capital intensive sugar business of the Company.

The sugar business is the major business of the Company which is seasonal in nature. The entire production of sugar takes
place in about six months and is sold throughout the year. It thus necessitates maintaining high levels of sugar inventory requiring
high working capital funding. Sugar business being a cyclical business, it is prudent to avoid high leverage and the resultant
high finance cost. It is the endeavour of the Company to prune down debts to acceptable levels based on its financial position.

The Company may resort to further issue of capital for projects which can not be fully funded through internal accruals/debt and/
or to finance working capital requirements.

The Company monitors capital structure through gearing ratio represented by debt-equity ratio (debt/total equity). In addition
to the gearing ratio, the Company also looks at long-term loans and lease liabilities to operating profit ratio (long-term loans
and lease liabilities/EBITDA) which provides an indication of adequacy of earnings to service the debts. The Company diligently
negotiates the terms and conditions of the loans and ensures adherence to all the financial covenants. The Company generally
incorporates a clause in loan agreements for prepayment of loans without any premium. The gearing ratio and long-term loans
and lease liabilities/EBITDA ratio for the Company as at the end of reporting period were as follows:

Note 41: Financial risk management

The Company's principal financial liabilities comprise
borrowings, lease liabilities, trade payables and other payables.
The main purpose of the financial liabilities is to finance the
Company's operations. The Company's principal financial
assets include loans, trade and other receivables and cash and
bank balances. The Company also holds certain investments,
measured at fair value through profit or loss / amortised cost
and enters into derivative transactions, which are not extensive.

The Company's activities expose it mainly to market risk, liquidity
risk and credit risk. The monitoring and management of such
risks is undertaken by the senior management of the Company
and there are appropriate policies and procedures in place
through which such financial risks are identified, measured and
managed. The Company has a specialised team to undertake
derivative activities for risk management purposes and such
team has appropriate skills, experience and expertise. It is the
Company policy not to carry out any trading in derivative for
speculative purposes. The Audit Committee and the Board are
regularly apprised of the exposures and risks every quarter and
mitigation measures are extensively discussed.

(i) Credit risk

Credit risk is associated with the possibility of a
counterparty defaulting on its contractual obligations
to pay, resulting in financial loss to the Company. The
Company is exposed to credit risks from its operating
activities, primarily trade receivables and retentions. The
credit risks in respect of deposits with the banks, foreign
exchange transactions and other financial instruments are
nominal. As required, the Company also advances loans
to its subsidiary companies and there is some credit risk
associated with it.

(a) Credit risk management

The customer credit risk is managed by each
business subject to the Company's established
policy, procedure and controls relating to customer
credit risk management. Various businesses require
different processes and policies to be followed
based on the business risks, industry practice and
customer profiles.

In the case of Sugar business, majority of the
sales are made either against advance payments

or at a very short credit period upto 15-30 days to
reputed institutional buyers through established
sugar agents whereas in Cogeneration business,
forming part of Sugar business, and Distillery, most
of the sales are made to Government customers,
such as, State Electricity Board (UPPCL) and Oil
Marketing Companies (OMCs). There may be
delays in receiving payments from UPPCL but the
risk in respect of realisation of dues is minimal. In
Power transmission business, it is the policy of
the Company to receive payment prior to delivery
of the material except in the case of some well
established OEMs, including group companies and
public sector undertakings, where credit up to 90
days is extended. Water business is engaged in
Engineering, Procurement and Construction (EPC)
business in the municipal and industrial sectors
where it is customary to have prescribed retentions
which are payable upon completion of the project
and after satisfactory performance of the plant.

In order to contain the business risk especially with
respect to long-duration construction & supply
contracts, creditworthiness of the customer is
ensured through scrutiny of its financials, status of
financial closure of the project, if required, market
reports and reference checks. The Company remains
vigilant and regularly assesses the financial position
of customers during execution of contracts with a
view to restrict risks of delays and default. In view of
its diversified business profile and considering the
size of the Company, credit risks from receivables
are well contained on an overall basis.

The impairment analysis is performed on each
reporting period on individual basis for major
customers. In addition, a large number of receivables
are grouped and assessed for impairment
collectively. The calculation of impairment loss is
based on historical data of losses, current conditions
and forecasts and future economic conditions. The
Company's maximum exposure to credit risk at
the reporting date is the carrying amount of each
financial asset as detailed in note 7, 8, 9, 10 and 13.

(ii) Liquidity risk

The Company uses liquidity forecast tools to manage its liquidity. The Company operates capital intensive sugar business
and has obligation to timely make cane price payments within the statutory time period. The Company is able to organise
liquidity through internal accruals and through working capital loans. The Company has good relationship with its lenders,
has not defaulted at any point of time in the past and is maintaining healthy credit ratings (viz. short term A1 and long
term AA under watch with developing implications from ICRA), as a result of which it does not experience any difficulty in
arranging funds from its lenders. However, when the sugar fundamentals are unfavourable, either due to market forces or
due to excessive cane pricing by the Government, the payment of cane price gets delayed though it is the endeavour of
the Company to make cane payment on a priority basis. It is the objective and focus of the Company to reduce debts to be
able to meet the cyclicalities of the sugar business.

(iii) Market risk

The Company is exposed to following key market risks:

(a) Interest rate risk on loans and borrowings

(b) Sugar price risk

(c) Other market risks
(a) Interest rate risk

Most of the borrowings availed by the Company are subject to interest on floating rate basis linked to the Repo rate /
MCLR (Marginal Cost of funds based Lending Rate). In view of the fact that the total borrowings of the Company are
quite substantial, the Company is exposed to interest rate risk.

The strategy of the Company to opt for floating interest rates is helpful in maintaining market related realistic rates.
Further, most of the loans and borrowings have a prepayment clause through which the loans could be prepaid without
any prepayment premium. The said clause helps the Company to arrange debt substitution to bring down the interest
costs or to prepay the loans out of the surplus funds held. The interest rate risk is largely mitigated as 61.4% of the long
term debts as at 31 March 2025 (31 March 2024: 99.1% of long term debts) comprises loans carrying concessional
interest rates/interest subvention.

(b) Sugar price risk

The sugar prices are dependent inter-alia on domestic and global sugar balance - higher supplies lead to softening
of sugar prices whereas higher demand than available supplies lead to hardening of sugar prices. The Company sells
most of its sugar in the domestic market where there are no effective mechanism available to hedge sugar prices in view
of limited breadth in the commodity exchanges. The Company also exports sugar in the years of surplus production
based on Government policy on exports.

Adverse changes in sugar price impact the Company in the following manner:

- The Company values sugar stocks at lower of cost of production (COP) and net realisable value (NRV). In the
event, the COP of sugar is higher than the NRV, the stocks are written down to NRV leading to recognition of loss
on such inventory.

- The Company is a large producer of sugar and even a small variation in the sugar price leads to significant impact
on the profitability of the Company.

The cost of production of sugar is generally lower than the net realisable value of sugar and hence, chances of significant
losses due to inventory write down are low. Further, the Central Government has prescribed Minimum Selling Price
(MSP) for sugar, which is subject to revision from time to time. It ensures that there is no steep decline in the sugar prices.

(c) Other market risks

The other market risks includes Equity price risk and Foreign currency risk.

Equity price risk arise in respect of listed and unlisted equity securities which may be susceptible to market price
fluctuations. In view of nominal value of investments being held by the Company, other than strategic investments, the
magnitude of risk is not significant.

The Company is exposed to foreign currency exchange risk on certain contracts in connection with export and import
of goods and services. The Company mitigates such risk by entering into off-setting derivative contracts with Banks,
mainly foreign exchange forward contracts, of appropriate maturity and amounts at adequate intervals.

In respect of firm commitments under certain contracts involving receipt/payment of consideration in foreign currency,
the Company has chosen to follow hedge accounting to hedge the risks attributable to the cash flows/fair value in
respect of such firm commitments. The foreign exchange risk arises in respect of the movement in the foreign currency
from the time the contract is negotiated/entered into and till the time the consideration under the contract is actually
settled. In accordance with its risk management policy, the Company manages such risks, generally by entering into
foreign exchange forward contracts for the appropriate maturity with banks. The risk mitigation strategy involves
determination of the timing and the amount of hedge to be taken in a progressive manner, with a view to protect the
exchange rate considered at the time of acceptance of the contract. The Company, generally hedges the foreign
currency risk directly to INR and for hedge accounting, designates a hedge ratio of generally 1:1 in respect of all such
cash flow hedges/fair value hedges. Besides monitoring the movements in the foreign exchange market, the Company
also takes the advice of outside consultants in arriving at its hedging decision. Refer note 2 (xiv) for further details on
accounting policy in respect of hedge accounting.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted unadjusted market prices in active markets
for identical assets or liabilities. This includes listed equity instruments that have quoted price. The fair value of all equity
instruments which are traded in the stock exchanges is valued using the closing price as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant
inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There are no transfers between levels 1 and 2 during the year.

(iii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include the fair value of derivatives (viz. foreign exchange
forward contracts) is determined using market observable inputs, including prevalent forward rates for the maturities of the
respective contracts and interest rate curves as indicated by banks and third parties.

All of the resulting fair value estimates are included in level 2.

(iv) Valuation processes

The Corporate finance team has requisite knowledge and skills in valuation of financial instruments. The team headed by
Group CFO directly reports to the audit committee on the fair value of financial instruments.

(v) The management considers that the carrying amounts of financial assets and financial liabilities recognised in the financial
statements approximate their fair values.

As Lessor

The Company has given certain portion of its office / factory premises under operating leases [including lease of investment
property (refer note 5)]. These leases are not non-cancellable and are extendable by mutual consent and at mutually agreeable
terms. The gross carrying amount, accumulated depreciation and depreciation recognised in the statement of profit and loss
in respect of such portion of the leased premises are not separately identifiable. There is no impairment loss in respect of such
premises. No contingent rent has been recognised in the statement of profit and loss. There are no minimum future lease
payments as there are no non-cancellable leases. Lease income is recognised in the statement of profit and loss under “Other
income” (refer note 26). Lease income earned by the Company from its investment properties and direct operating expenses
arising on the investment properties for the year is set out in note 5.

Note 50: Acquisition of a Subsidiary

The Company had, during the financial year ended 31 March 2024, acquired 25.43% paid-up equity share capital of Sir Shadi Lal
Enterprises Limited (‘SSLEL') from certain members of the promoter group of SSLEL, under a share purchase agreement dated
30 January 2024. During the current year, the Company has further acquired 36.34% paid up equity share capital of SSLEL on
20 June 2024 from the balance members of the Promoter group under a share purchase agreement and also completed an
open offer for acquisition of up to 26% voting share capital of SSLEL in compliance with applicable laws including SEBI (SAST)
Regulations 2011. The Company now cumulatively holds 61.77% of the total shareholding of SSLEL. Consequently, SSLEL has
become a subsidiary of the Company w.e.f. 20 June 2024.

Note 51: Composite Scheme of Arrangement

The Board at its meeting held on 10 December 2024 has, subject to necessary approvals, considered and approved a Composite
Scheme of Arrangement amongst Triveni Engineering & Industries Limited (‘TElL), Sir Shadi Lal Enterprises Limited (‘SSLEL') and
Triveni Power Transmission Limited (‘TPTL') and their respective shareholders and their respective creditors under Section 230
to 232 and other applicable provisions, if any, of the Companies Act, 2013 read with the rules made thereunder (the ‘Scheme')

for amalgamation of SSLEL into TElL and demerger of Power Transmission Business (Demerged undertaking) of TElL into TPTL
(resulting Company). The approval / no-objection of Stock Exchanges to the Scheme on the application filed by the Company
is awaited.

Note 52: Comparatives

The Company has reclassified certain items of financials of comparative year to conform to this year's classification, however,
impact of these reclassification are not material.

Note 53: Approval of standalone financial statements

The standalone financial statements were approved for issue by the Board of Directors on 27 May 2025 subject to approval
of shareholders.

As per our report of even date attached

For S S Kothari Mehta & Co. LLP For and on behalf of the Board of Directors of Triveni Engineering & Industries Limited

Chartered Accountants

Firm’s registration number : 000756N/N500441

Vijay Kumar Dhruv M. Sawhney Dr. Meena Hemchandra

Partner Chairman & Managing Director Director & Chairperson Audit Committee

Membership No. 092671

Place : Noida Suresh Taneja Geeta Bhalla

Date : May 27, 2025 Group CFO Group Vice President & Company Secretary