R. Provisions, contingent liabilities and contingent assets Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that the outflow of resources embodying economic benefits will be required to settled the obligation in respect of which reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to provision presented in the statement of profit & loss is net of any reimbursement.

If the effect of the time value of money is material, provisions are disclosed using a current pre-tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.

Contingent liability is disclosed in the notes in case of:

Q There is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company.

Q A present obligation arising from past event, when it is not probable that as outflow of resources will be required to settle the obligation

Q A present obligation arises from the past event, when no reliable estimate is possible Q A present obligation arises from the past event, unless the probability of outflow are remote.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

Onerous Contracts

A provision for onerous contracts is measured at the present value of the lower expected cost of terminating the contract and the expected cost of continuing with the contract. Before a provision is established, the Company recognizes the impairment on the assets with the contract.

Contingent assets

Contingent assets are not recognized in the Standalone financial statements.

S. Cash and cash equivalents

Cash and cash equivalents includes cash on hand and at bank, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

For the purpose of the Statement of Cash Flows, cash and cash equivalents consists of cash and short term deposits, as defined above, net of outstanding bank overdraft as they being considered as integral part of the Company's cash management.

T. Impairment Non-financial assets

Property, plant and equipment, intangible assets and assets classified as investment property with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit or loss.

An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

Impairment losses on continuing operations, including impairment on inventories are recognized in the statement of profit and loss, except for properties previously revalued with the revaluation taken to other comprehensive income. For such properties, the impairment is recognized in OCI up to the amount of any previous revaluation surplus.

Financial assets

The Company applies 'simplified approach' measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

Q Financial assets that are debt instrument and are measured at amortized cost e.g. loans, debt securities, deposits, and bank balance.

Q Trade receivables

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime expected credit loss at each reporting date, right from its initial recognition.

13. Non current financial liabilities (Contd.)

Nature of securities, Interest & repayment Terms.

A) Details of Loans taken from Banks:-

a) HDFC Bank Term Loan for Nigohi distillery is secured by first pari passu charge through hypothecation of movable fixed assets & mortgage of immovable fixed asset at Nigohi payable in 40 equal quarterly installments starting from May 2021.

b) HDFC Bank Term Loan for Jawaharpur distillery expansion is secured by first pari passu charge through hypothecation of movable fixed assets and mortgage immovable fixed asset at Jawaharpur payable in 40 equal quarterly installments starting from May 2021.

c) HDFC Bank Term Loan for Jawaharpur distillery incineration boiler is secured by first pari passu charge through hypothecation on movable & immovable fixed asset at Jawaharpur payable in 40 equal quarterly installments starting from Nov 2021.

d) HDFC Bank Term Loan for Ramgarh distillery is secured by first pari passu charge through hypothecation of movable fixed assets & mortgage of immovable fixed asset at Ramgarh payable in 36 equal quarterly installments starting from Dec 2022.

e) HDFC Bank Term Loan for Jawaharpur distillery expansion is secured by first pari passu charge through hypothecation of movable fixed assets & mortgage immovable fixed asset at Jawaharpur payable in 36 equal quarterly installments starting from Dec 2022.

f) HDFC Bank Term Loan for Jawaharpur grain distillery set up-1 secured by first pari passu charge through hypothecation of movable fixed assets & mortgage of immovable fixed asset at Jawaharpur payable in 36 equal quarterly installments starting from June 2023.

g) Axis Bank Term Loan for Jawaharpur grain distillery set up-2 secured by first pari passu charge through hypothecation of movable fixed assets & mortgage of immovable fixed asset of Jawaharpur unit payable in 36 equal quarterly installments starting from Sept 2024.

h) HDFC Bank Term Loan for Kolhapur distillery expansion is secured by first pari passu charge through hypothecation of movable fixed assets & mortgage of immovable fixed asset at Kolhapur payable in 36 equal quarterly installments starting from Dec 2022.

i) HDFC Bank Term Loan for Nigohi distillery expansion is secured by first pari passu charge through hypothecation of movable fixed assets & mortgage of immovable fixed asset at Nigohi payable in 36 equal quarterly installments starting from Sep 2022.

B) Details of Loans taken from entities other than banks:-

a) Sugar Development Fund (SDF) loans is secured by guarantees given by banks on behalf of the Company and are repayable in unequal structured installments.

b) SEFASU 2018 term loan is secured by first pari passu charge on movable and immovable fixed assets of RamgarhJawaharpur and Nigohi sugar units.

37 Disclosure as required by Ind AS 108, Operating Segments

(i) Identification of Segments

The chief operational decision maker monitors the operating results of its business segments seperately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segments have been identified on the nature of products and services and have been identified as per the quantitative criteria specified in the Ind AS.

(ii) Operating segments identified as follows:

a) The "Own Manufactured Sugar Segment" includes manufacture and marketing of Sugar.

b) The "Power Segment" includes generation and sale of Power. Power is also used for captive consumption by the Company.

c) The "Distillery Segment" includes Production and sale of Ethanol, ENA and sanitizer.

d) The 'Others' segment' includes Magnesite, Travel, and Electronics activities of the Company.

(iii) Segment revenue and results

The expense or incomes which are not directly attributable to any business segment are shown as unallocable expenditure ( net of unallocable income )

(iv) Segment assets and liabilities

Segment assets include all operating assets used by the operating segments and mainly consists of property plant and equipment, trade receivables, cash and cash equivalents and inventories. Segment liabilities primarily include trade payables and other liabilities. Common assets and liabilities which cannot be allocated to any other segments are shown as part of unallocable assets/liabilities.

(ix) Significant clients

There is no single customer who has contributed 10% or more to the Company's revenue for both the years ended March 31,2024

and March 31,2023.

Notes:-

a) The accounting policies of the reportable segments are the same as the Company's accounting policies described in note no. 2 and 3.

b) All assets are allocated to reportable segments other than investments, loans, certain financial assets and current and deferred tax assets. Segment assets include all assets directly attributable to the segments and portion of the enterprise assets that can be allocated on a reasonable basis to the segments.

c) All liabilities are allocated to reportable segments other than borrowings, certain financial liabilities, current and deferred tax liabilities. Segment liabilities include all liabilities directly attributable to the segments and portion of the enterprise liabilities that can be allocated on a reasonable basis to the segments.

38 Employee Benefits - Gratuity & Post employement benefits 38.1 Gratuity

Gratuity is computed as 15 days salary, for every recognized retirement / termination / resignation. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as per actuarial valuation are charged to the Statement of profit and loss.

For summarizing the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans, the details are as under

44 a) The Company has acquired 100% equity shares of Baghauli Sugar and Distillery Limited and became 100% holding Company

with effect from December 22, 2023 persuant to Hon'ble National Company Law Tribunal (NCLT) order dated November 24, 2023 and National Company Law Appellate Tribunal (NCLAT) order dated December 22, 2023. As per the terms of the approved resolution plan, the Company has made investment of Rs.50.00 crore in the equity shares of Baghauli Sugar and Distillery Limited and given loan of Rs.91.85 crore to Baghauli Sugar and Distillery Limited for further payment to secured financial creditors. The Company has restarted operations of Sugar plant in March , 2024.

b) Board has approved scheme of demerger of Refractory and Govan Travels bussiness of the Company with effective date of July 01,2023. The Company is under process of filling the scheme with NCLT.

45 Financial Risk Management

Financial risk management objectives and policies:

Sugar industry being an industry which is cyclical in nature, the Company's operational activities are exposed to various financial & operational risks, such as economical & political risk, market risk, credit risk and risk of liquidity. The Company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictability of markets and seek to minimize potential adverse effects on its financial performance. The Company's senior management oversees the management of these risks and devise approrpiate risk management framework for the Company. The senior management provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the company's policies and risk objectives.

A Market Risk:-

The Company operates internationally and is transacted in foreign currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas. The Company holds derivative financial instruments such as foreign exchange forward to mitigate the risk of changes in exchange rates on foreign currency exposures.

During the year ended March 31,2024, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions. The related hedge transactions for balance in other comprehensive income - cash flow hedge as at March 31,2024 are expected to occur and reclassified to statement of profit and loss within 1 year.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes. Any hedge ineffectiveness is calculated and accounted for in the Statement of Profit or Loss at the time of the hedge relationship rebalancing.

The following table provides the reconciliation of Other comprehensive income - cash flow hedge for the year ended:-

f? in rrnrpcj

B Credit Risk:-

Credit risk arises when a counterparty defaults 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. Since there is a blend of instituitional & non instituitional buyers with the Company and also considering the fact that major sales gets effected after receipt of advance from the customers, the credit risks in respect of trade receivables is minimized.

C Liquidity risk:

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit facilities, short term loans and commercial papers and to reduce debts to be able to meet the cyclicalities of the sugar business. Apart from cyclical sugar business, the Company has alternate revenue streams in the form of cogeneration and distillery, which, to a large extent, offset the impact of sugar cyclicalities.

46 Capital Management (Contd.)

In addition to the above gearing ratio, the Company also looks at operating profit to total debt ratio (EBIDTA/Total Debts) which gives an indication of adequacy of earnings to service the debts. The Company carefully negotiates the terms and conditions of the loans and ensures adherence to all the financials convenants. With a view to arrive at the desired capital structure based on the financial condition of the Company, the Company normally incorporates a clause in loan agreements for prepayment of loans without any premium. During the year, majority of the long term debts have been contracted by the Company at concessional interest rates under various soft loan schemes of the Government.

Further, no changes were made in the objectives, policies or process for managing capital during the period.

The Company is not subject to any externally imposed capital requirements.

47 Fair Value Measurement

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Indian accounting standard.

D Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regard to interest income and interest expenses to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

46 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 shareholder value along with an objective to keep the leverage in check in view of cyclical capital intensive sugar business of the Company.

One of the majour business of the Company is the sugar business, which is a seasonal industry,where the entire production is made in about five to six months and then sold throughout the year. Thus, it necessitates keeping high sugar inventory levels 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 endeavor of the Company to prune down debts to acceptable levels based on its financial position.

The Company may resorts to further issue of capital when the funds are required to make the Company stronger financially or to invest in projects meeting the ROI expectations of the Company.

The Company monitors capital structure through gearing ratio represented by debt-equity ratio (debt/total equity). The gearing ratios for the Company as at the end of reporting period were as follows:

47 Fair Value Measurement(Contd)

B - Company has opted to fair value its quoted investments in equity share through OCI.

C - As per Para D-15 of Appendix D of Ind AS 101, the first time adopter may choose to measure its investment in subsidiaries, JVs and Associates at cost or at fair value. Company has opted to value its investments in subsidiaries, JVs and Associates at cost.

D - Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.

Fair value hierarchy

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 assets or liabilities that are not based on observable market data (unobservable inputs).

48 Impairment Review

Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit ('CGU') or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating units' value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid-term market conditions.

Key assumptions used in value-in-use calculations are:-

(i) Operating margins (Earnings before interest and taxes), (ii) Discount Rate, (iii) Growth Rates and (iv) Capital Expenditure

49 Other Statutory information

i) The Company did not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.

ii) The Company did not have any transactions with Companies struck off.

iii) Detail of charges not satisfied as on 31^st March 2024

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

v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) 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

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:

a) 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

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

50 Events occurring After the Balance Sheet date

1) No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements.

2) The Company recommended a final dividend @ Rs.1.25 per equity share (face value of Rs.2 per equity share), for financial year 202324 subject to approval of shareholders in ensuing annual general meeting.

3) Financial numbers for the financial year 2023-24 will be recasted post approval of scheme of demerger of Refractory and Govan Travels divisions by Hon'ble National Company Law Tribunal.

51 Previous Year Comparatives

Figures in brackets pertain to previous year. Previous year's figures have been regrouped where necessary to confirm to this year's classification.

As per our report of even date

For NSBP & Co. For and on behalf of the Board of Directors of

Chartered Accountants Dalmia Bharat Sugar and Industries Limited.

Firm's Registration Number : 001075N

Subodh Kumar Modi Aashhima V Khanna Anil Kataria B B Mehta Gautam Dalmia

Partner Company Secretary Chief Finance Officer Whole Time Director Managing Director

Membership No.: 093684 Membership No.: A34517 PAN: AALPK4889N DIN:00006890 DIN:00009758

Place : New Delhi Date: May 14, 2024