Bajaj Hindusthan Sugar Ltd

Dear Members,

Your directors have pleasure in presenting their Ninety Third Annual Report of Bajaj Hindusthan Sugar Limited along with audited financial statements for the year ended March 31, 2025.

The summarised financial results of the Company for the year ended March 31, 2025 are presented below:

On a standalone basis, the Company achieved a turnover (including other income) of 5,559.39 crore for the year ended March 31, 2025 as compared to 6,089.37 crore in the previous year. The profit after tax is 4.38 crore as compared to the loss of 91.53 crore in the previous year. On a consolidated basis, the turnover including other income is 5,592.79 crore as compared to 6,146.33 crore in the previous year. The loss after tax net of minority interest is 23.57 crore as against loss of 86.41 crore in the previous year.

In view of the inadequate profit during the year under review, your Directors do not recommend any dividend for the current Financial Year. (Previous Year - Nil)

The Board of Directors at its meeting held on February 13, 2017 approved the Dividend Distribution Policy containing the requirements mentioned in regulations 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy is annexed as "Annexure I" and forms part of this Report.

The Board of Directors of the Company has decided not to transfer any amount to the Reserves for the year under review.

Detailed analysis of operations of the Company are given in the Management discussion and analysis report under financial analysis of Operations of the Company.

The Operational data of Bajaj Hindusthan Sugar Limited for its fourteen sugar plants having an aggregate sugarcane crushing capacity of 1,36,000 TCD, six distilleries having aggregate capacity to produce Industrial Alcohol of 800 kilolitres per day and fourteen co-generation plants having a total power generation capacity of 449 MW are as under:

During the year ended March 31, 2025, the Company crushed 11.320 MMT of sugarcane as against 12.819 MMT in the previous year. This year, sugar recovery was 10.51% as against 10.89% in the previous year. During the year 2024-25, the Company produced 11,90,281 MT sugar (previous year 13,93,171 MT) and 5,22,733 MT C-molasses (previous year 5,23,678 MT) and nil MT B-heavy molasses (previous year 72,832 MT).

The Company sold 12,13,123 MT of sugar and 1,28,918 MT of molasses during the year as against 13,33,980 MT of sugar and 80,379 MT of molasses during the previous year. This year, the Company crushed nil MT sugarcane (previous year 31,320 MT) for cane syrup for ethanol production.

The Industrial Alcohol / Ethanol production was 1,07,757 KL as against 1,78,121 KL in the previous year. Alcohol / Ethanol sale during the year was at 1,20,410 KL as against 1,52,719 KL during the previous year. No Ethanol was produced from B-heavy molasses during the year as against 1,11,443 KL in the previous year.

Ethanol sales during the year produced from B-heavy molasses stood at 11,222 KL at an average realization of 60,574 per KL as against 1,06,175 KL at an average realisation of 60,668 per KL in the previous year. Ethanol sales from molasses produced from C-heavy route stood at 1,09,189KL at an average realization of 56,274 per KL as compared to 44,150 KL at an average realisation of 47,294 per KL in the previous year. Realization of Ethanol from C heavy is higher due to increase of Ethanol price by Central Government. Ethanol sales from molasses produced from C-heavy route was higher in the current year as the Company chose to produce and sell Ethanol from C-heavy molasses route. Blended realisation for total industrial alcohol (including ENA) sales stood at 56,675 per KL as compared to 56,879 per KL in previous year. During the year 2023-24, Distillery plants had been run for 186 days, while in current year 2024-25, all plants had been run for 160 days.

The operations of power generation were smooth at all the fourteen plants. While most of the power generated by us continued to be used for captive consumption to run our plants, the surplus power was sold to the Uttar Pradesh state grid.

During the year, Power generation was at 621.99 Million Units (MUs) as against 722.99 MUs in the previous year. The Company exported 157.34 MUs of power as against 185.63 MUs during the previous year.

There is no change in nature of business during the financial year.

There have been no material changes and commitments which affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

The Company's equity shares are listed on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing fees to each of these Stock Exchanges have been paid by the Company.

As on March 31, 2025, the Company had the following Subsidiaries and Associates, all of them are presently unlisted: Subsidiaries:

1. Bajaj Aviation Private Limited (BAPL) – (Holding 100%).

2. Bajaj Power Generation Private Limited (BPGPL) – (Holding 100%).

3. Phenil Sugars Limited (PSL) – (Holding 98.01%)

4. Bajaj Hindusthan (Singapore) Private Limited (BHSPL) – (Holding 100%).

5. PT. Batu Bumi Persada, Indonesia – (step down subsidiary being 99.00% subsidiary of BH(S)PL).

6. PT. Jangkar Prima, Indonesia – (step down subsidiary being 99.88% subsidiary of BH(S)PL).

Associate:

1. Bajaj Ebiz Private Limited – (Holding 49.50%) (strike off w.e.f. 26.06.2024).

There is no joint ventures in the Company during the year.

Performance and financial positions of subsidiaries, associate and joint ventures a) Bajaj Aviation Private Limited (BAPL): During the year ended March 31, 2025, BAPL, the wholly owned subsidiary of the Company, continued to provide Air Transport Services through Aircraft - Falcon LX 2000.

For the year ended March 31,2025, BAPL generated revenue of 3,280.26 lakh from its operations as compared to 3,015.94 lakh generated in the previous year. The profit after tax for the current year was at 145.28 lakh as compared to 54.89 lakh in the previous financial year. b) Bajaj Power Generation Private Limited (BPGPL): BPGPL, the wholly owned subsidiary of the Company is engaged in setting up of power project. The Company's existing power project could not take off in time due to various reasons beyond the Company's control. The Company is exploring opportunities in renewable energy sector and will seek necessary regulatory approvals as may be required going forward. c) Phenil Sugars Limited (PSL): PSL continued to be the subsidiary of the Company (98.01%) during the year under review. During the financial year 2024-25, the loss after tax is 60.01 crore as compared to the loss of 25.23 crore in the previous year. d) Bajaj Hindusthan (Singapore) Private Limited: BHSPL through its two subsidiaries in Indonesia, continued to hold coal mines in Indonesia which are in the process of being developed. e) PT. Jangkar Prima (PTJP), Indonesia and PT. Batu Bumi Persada (PTBBP), Indonesia: PTJP and PTBBP are engaged in the business of Mining and Mining services. These subsidiaries are in the process of development of a coal mine for which necessary approvals are in place. Operation of coal mine is expected to start soon. f) Bajaj Ebiz Private Limited: Bajaj Ebiz did not carry out any business during the year and the name of the Company was striked off during the year.

There is no joint venture in the company during the year.

Pursuant to the provisions of Section 129 of the Companies Act, 2013 and Rule 5 of the Companies (Accounts) Rules 2014, statement containing the salient features of the financial statements of its subsidiaries/associate companies in the manner prescribed under the Companies Act, 2013 is given as Annexure to the Consolidated Financial Statements.

In compliance with Section 129(3) of the Companies Act, 2013 and Rules made thereunder, Indian Accounting Standard (Ind AS) 110, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements form part of this Annual Report. Consolidated Financial Statements presented by your Company include financial information about its aforesaid subsidiaries and associates. The standalone financial statements of BHSL as well as its aforesaid subsidiaries and its associates will be available on the website of the Company (www.bajajhindusthan.com).

The brief details of the ratings received from credit rating agency are given in Corporate Governance Report.

The details of Investor Education and Protection Fund are given in Corporate Governance Report.

During the year, four meetings of the board were held on May 10, 2024, August 08, 2024, November 08, 2024 and February 12, 2025. The Maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act 2013 & SEBI (LODR) Regulation, 2015.

A detailed update on the Board and its Committee's composition, meetings held and attendance of the Directors at these meetings is provided in the Corporate Governance Report, which forms a part of this Annual Report.

Mr. Kushagra Bajaj, (DIN: 00017575), Chairman of the Company, will retire by rotation and being eligible offers himself for reappointment. The appointment of Mr. Kushagra Bajaj is in compliance with the provisions of Section 152 of the Companies Act, 2013.

The shareholders through postal ballot (result declared on December 19, 2024) approved Re-appointment of Mr. Atul Hasmukhrai Mehta (DIN 00112451) as Independent Director of the Company as per Section 149 of the Companies Act, 2013 for a second term of 5 (five) consecutive years with effect from January 01, 2025 to December 31, 2029.

Mr. Vinod Chandulal Sampat (DIN: 09024617), whose first term will expire on January 20, 2026, was re-appointed as an Independent Director of the Company to hold office for the second term of 5 (five) consecutive years with effect from January 21, 2026 to January 20, 2031, subject to approval of shareholders at the ensuing 93rd Annual General Meeting.

Independent Directors have been re-appointed for a period of five years and shall not be liable to retire by rotation.

The profile of Mr. Atul Hasmukhrai Mehta and Mr. Vinod C. Sampat forms part of the Corporate Governance Report.

Mr. Ashok Mukand (DIN: 00324588) ceased to be a Nominee Director of the Company due to withdrawal of his nomination from State Bank of India with effect from August 23, 2024.

There is no change in Key Managerial Personnel during the year.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

The process followed by the Company for induction and training to Board members has been explained in the Corporate Governance Report.

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1) (b) of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. As required under Rule 8(5) (iiia) of the Account of Companies Rules, in the opinion of the Board of Directors of your Company, the Independent Directors comprise persons of high repute and possess relevant expertise and experience in their respective fields.

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that: (i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and profits of the Company for that year.

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) the directors had prepared the annual accounts on a going concern basis.

(v) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

M/s. Sidharth N Jain & Company, Chartered Accountants (Firm Registration No. 018311C), has been appointed as Statutory Auditors of the Company at the 90th annual general meeting held on September 26, 2022, for a period of 5 consecutive years till the conclusion of 95th Annual General Meeting.

During FY 2024-25, the Statutory Auditors had not reported any matter under Section 143(12) of the Companies Act 2013 and therefore, no details are required to be disclosed under Section 134(3) (ca) of the Act.

The auditors in their report to the members, have given qualified opinion, emphasis of matter and key audit matters and the explanation/comments of your directors with respect to it are as follows:

1. Explanation to 3rd para of the Audit report regarding qualified opinion

As per the Master Framework Agreement (MFA) executed between the Company and Lenders on December 16, 2017 the Optionally Convertible Debentures (OCDs) shall carry a Yield to Maturity (YTM) at a yield rate on the principle amount, accruing on annual basis, starting from the allotment date. The redemption will start from the Financial Year 2024-25.

In addition to the clause of the MFA quoted above it will be pertinent to note that another clause stated that upon occurrence of an Event of Default, the Debenture Trustee/ Monitoring Institution can issue a Conversion Notice for conversion of all of its outstanding OCDs into the equity shares of the Company. This clause contemplates conversions of all outstanding OCDs. The expression outstanding OCDs is not a defined expression unlike other expressions in the MFA.

Thus, MFA provides that upon occurrence of an Event of Default, the Debenture Trustee/ Monitoring Institution may instruct the conversion of outstanding OCDs into equity shares. Since the expression used is ‘outstanding' and not "Outstanding Amount – OCDs", it can be construed that the conversion of OCDs will cover only the outstanding face value of the OCDs and will not include YTM.

Having considered the clauses referred above, Clause regarding conversion does not suggest or indicate that the amount of YTM is required to be added to the Principle Amount of the OCDs for conversion of the OCDs into the equity shares of the Company at the time of the conversion. Accordingly, the management considers such YTM as contingent liability and has not provided the premium in the books of the Company.

2. Explanation to 4th para of the Audit report regarding qualified opinion

The Company has continued to classify the debenture liability under Non-Current Borrowings, based on management's assessment and expectation of a successful restructuring outcome that would modify the repayment terms.

3. Explanation to para 5th of the Audit report regarding Material Uncertainty related to Going Concern

The Company has reported positive EBITDA in the current year as well as in earlier years, and during the current financial year, has reported a Profit after tax (PAT) of 4.38 crore, and has positive networth. However, the financial performance in past periods was impacted by several challenges including lower availability of sugarcane and lower sugar recovery. Lower cane availability was primarily due to continued outstanding sugarcane dues, which affected the Company's ability to generate sufficient cash surplus to timely settle cane dues and support cane development activities. Following the repayment of the entire sustainable portion of its term debt, the Company anticipates an improvement in operational efficiency. With a significant reduction in outflows towards debt servicing, the Company intends to deploy internal accruals towards cane payment and enhancing plant performance, which has been pending for some time.

The overall sugar sector outlook has also improved, with domestic sugar prices firming up to approximately 4,000 per quintal. Further, the Government has permitted the diversion of sugar for ethanol production, thereby mitigating the risk of oversupply in the sugar market. The national policy to increase ethanol blending in vehicular fuel up to 30% is expected to support stable and remunerative ethanol prices and improve sector viability.

With the repayment of the sustainable debt, the Company's finance cost has substantially reduced, thereby improving liquidity. This improved position is expected to enable the Company to reduce its outstanding cane dues, enhance cane development initiatives, increase cane availability and crush, improve capacity utilisation and sugar recovery, and optimise realisation from by-products.

The Company has submitted a debt resolution plan for the unsustainable portion of its borrowings to its consortium of lenders. The proposal, which includes revised repayment terms and financial restructuring, is currently under consideration. The resolution, once finalised, is expected to further improve the Company's liquidity and capital structure.

During the year, the Company was unable to meet its obligations towards the first annual instalment of Optionally Convertible Debentures (OCDs), including the applicable coupon interest and contingent yield-to-maturity (YTM), due in FY 2024-25. The said default has been considered by management in its assessment of going concern, and the ongoing resolution proposal is expected to regularise the said obligations.

Due to its large scale capacity for cane crushing (1,36,000 TCD), distillation (800 KLD) and cogeneration (449 MW), the Company enjoys a natural economic advantage. The Company crushes around 14% of the total sugar cane grown in the State of Uttar Pradesh. As capacity utilisation increases alongwith improvements in operational efficiency, it will have a direct positive impact on the Company's financial performance.

The Company also expects to receive accrued benefits amounting to 1,893.51 crore (including interest up to March 31, 2025) under the Sugar Industry Promotion Policy, 2004 for which the Company is entitled pursuant to earlier court orders, but the matter is subject to final adjudication and are currently sub-judice.

Based on the above factors, management believes that the Company is well positioned to achieve self-sustainability and meet its obligations as they fall due. Accordingly, the financial statements have been prepared on a going concern basis, which contemplates the realisation of assets and settlement of liabilities in the normal course of business.

4. Comments to para 10th (i) & (ii) of the Audit report regarding Emphasis of Matter

(i) Management is of the view that sufficient efforts are being undertaken to revive the said subsidiaries in the foreseeable future to recover carrying value of the investments & loans and on-going efforts towards obligation casted on the Company and its promoters to recover the outstanding loans in phased manner.

(ii) Please refer the comments in Sr. No. 1 above regarding OCDs.

5. Comments on Key audit matters of the Audit report regarding Impairment assessment for Investments, loans and interest on loan-related party companies

Please refer the comments on Sr. 3 above regarding recovery of outstanding loans and sale of investment and accordingly no impairment have been identified by the management based on above assessment.

Pursuant to Regulation 34(2)(a), statements on Impact of Audit Qualifications as stipulated in Regulation 33(3)(d) for Modified Opinions on standalone and consolidated financial statements are attached as Annexure "IX" and "X" and forms part of this report.

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors on the recommendation of the Audit Committee appointed M/s. B.J.D. Nanabhoy & Co., Cost Accountants, Mumbai (Firm Registration No. 000011) as the Cost Auditors of the Company for financial year 2025-26 and has recommended their remuneration to the shareholders for ratification at the ensuing Annual General Meeting. The Cost Audit Reports for the financial year ended March 31, 2024, for the products Sugar, Industrial Alcohol and Electricity was filed with the Ministry of Corporate Affairs on August 28, 2024.

In terms of Section 148 of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, it is stated that the cost accounts and records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Act.

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, M/s. Anant B Khamankar & Co., Company Secretaries were appointed as Secretarial Auditor of the Company. The Secretarial Audit Report and Annual Secretarial Compliance Report are annexed as "Annexure II and Annexure III" and forms part of this report. The report does not contain any qualification, reservation or adverse remark or disclaimer.

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Deposits unclaimed at the end of the year was Nil.

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in "Annexure IV" and forms part of this report.

During the year under review, there has been no one-time settlement of loans taken from banks and financial institutions.

The Company constituted Audit Committee as required under Section 177 of the Companies Act, 2013 and Regulation 18 of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. Composition of Audit Committee is given in Corporate Governance Report. There is no such instance during the year under review where the Board had not accepted any recommendation of Audit of the Audit Committee.

The details of transactions entered into with the Related Parties are enclosed in Form no. AOC 2 is annexed herewith as "Annexure V" and forms part of this report.

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Draft Annual Return of the Company for the financial year ended March 31, 2025 as per Section 92(3) of the Companies Act, 2013 is placed on the website of the Company at www.bajajhindusthan.com

As required under Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility (CSR) Committee. As per recommendation of the CSR Committee, the Board at its meeting held on September 25, 2014 approved the CSR Policy of the Company. Report on CSR Activities/ Initiatives is enclosed as "Annexure VI" and forms part of this report.

During the year ended March 31, 2025, the Company does have material unlisted subsidiary company as defined in Regulation 16 (c) of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has framed a policy for determining "material subsidiary" and the same is available on the Company's website at www.bajajhindusthan.com/ investorcorner-policies.php

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The detailed remuneration policy is placed on the Company's website at www.bajajhindusthan.com/investorcorner-policies.php

The Company has formulated a Vigil Mechanism/Whistleblower Policy in accordance with Section 177(9) of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the Vigil Mechanism/ Whistleblower Policy are provided in the Corporate Governance Report and also posted on the website of the Company at www.bajajhindusthan.com/investorcorner-policies.php

The Company has a Risk Management Policy to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business. The detailed remuneration policy is placed on the Company's website at www.bajajhindusthan.com/investorcorner-policies.php The Board of Directors had constituted Risk Management Committee to identify elements of risk in different areas of operations and to develop policy for actions associated to mitigate the risks.

Policy on dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website at www.bajajhindusthan.com/investorcorner-policies.php

Contents of Corporate Social Responsibility Policy in the Board's report are given in the Report on CSR Activities in "Annexure VI" and on the Company's website at www.bajajhindusthan.com/investorcorner-policies.php

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal committee has been set up to redress the complaints received regarding sexual harassment at workplace. All employees, including trainees are covered under this policy. During the financial year ended March 31, 2025, there was nil complaints recorded pertaining to sexual harassment.

The Company has complied with the secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

There have been no significant and material orders passed by the courts or regulators or tribunals impacting the going concern status and Company's operations. However, members' attention is drawn to the statements on contingent liabilities and commitments in the notes forming part of the financial statements.

As required under the provision of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are set out in "Annexure VII" and forms part of this report.

The details of Unclaimed Dividend and Unclaimed Shares forms part of the Corporate Governance Report.

The relevant particulars regarding the above are given in "Annexure VIII" and forms part of this report.

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the Listing Regulations. A separate section on corporate governance practices followed by the Company, together with a certificate from the Auditors confirming compliance is annexed and forms part of this Report.

As per Regulation 34 of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report and Business Responsibility and Sustainability Report are prescribed in separate Sections forming part of this Annual Report.

Industrial relations have been cordial at all the plants of the Company. The Directors express their appreciation for the sincere co-operation and assistance of Central and State Government authorities, bankers, customers and suppliers and business associates. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company's employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders..