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Directors Report of Bajaj Hindusthan Sugar Ltd.

Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting their Eighty Sixth annual report and the audited financial statements for the year ended March 31, 2018.

Financial highlights

The summarised financial results of the Company for the year ended March 31, 2018 are presented below:

Rs. Crore

	Year ended March 31, 2018	Year ended March 31, 2017
Sales and other income	6,105.31	4,780.91
Profit/(Loss) before depreciation, interest and tax	449.78	1,017.77
Depreciation and amortisation	196.91	214.12
Profit/(Loss) after depreciation but before interest and tax	252.87	803.65
Finance costs (Net)	680.17	802.07
Profit/(Loss) before tax	(427.30)	1.58
Provision for taxation (Net)	(4.11)	5.82
Profit/(Loss) after tax	(423.19)	7.40
Opening balance b/f	(610.41)	(617.58)
Disposable surplus after adjustments	(1,033.60)	(610.18)
Transfer to reserve for molasses storage tank	0.32	0.23
Balance carried to balance sheet	(1,033.92)	(610.41)

On a standalone basis, the Company achieved a turnover (including other income) of Rs.6,105.31crore for the year ended March 31, 2018 as compared to Rs.4,780.91 crore in the previous year. The Loss after tax is Rs.423.19 crore as compared to the profit of Rs.7.40 crore in the previous year. On a consolidated basis, the turnover including other income is Rs.6,043.69 crore as compared to Rs.4,729.75 crore in the previous year. The loss after tax and minority interest is Rs.499.64 crore as against loss of Rs.91.98 crore in the previous year.

Dividend

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

Dividend distribution policy

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 âAnnexure Iâ and forms part of this Report.

Operations

The Company continues to be the leading sugar and ethanol manufacturing Company in India with 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.

During the year, the operations at all the sugar, distillery and co-generation plants were satisfactory.

Sugar

During the year ended March 31, 2018, the Company crushed 14.765 MMT of sugarcane as against 12.509 MMT in the previous year. The average recovery of sugar from sugarcane is higher due to conducive weather condition and high yield cane varieties. This year, sugar recovery was 10.62% as against 10.23% in the previous year. During the year, the Company produced 15,60,093 MT sugar (previous year 12,72,424 MT) and 6,90,184 MT molasses (previous year 5,94,958 MT).

The Company sold 14,62,198 MT of sugar and 1,21,136 MT of molasses during the year as against 10,46,122 MT of sugar and 10,058 MT of molasses during the previous year.

Distillery

The Industrial Alcohol / Ethanol production was 1,13,165 KL as against 1,11,934 KL in the previous year. Alcohol / Ethanol sale during the year was at 1,17,323 KL as against 1,09,820 KL during the previous year.

Power

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 8,52,209 MW as against 7,29,431 MW in the previous year. The Company exported 3,16,493 MW of power as against 2,67,257 MW during the previous year.

Debt restructuring

The Company has implemented the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) introduced by Reserve Bank of India and inter alia completed the following:

- Allotted 34,83,24,626 fully paid-up Optionally Convertible Debentures (OCDs) of face value Rs.100/- each aggregating to Rs.34,83,24,62,600 upon conversion of Part-B (Unsustainable Loan) to JLF Lenders

- Promoter group entities sold and transferred 11,99,87,344 equity shares of Rs.1 each to JLF lenders. Consequently the promotersâ shareholding stands reduced to 15.43%

- Pursuant to the implementation of the said Scheme, total funded debt exposure of Rs.8,284.59 crore was divided into two categories:

Part A (Sustainable) : Rs.4,789.34 crore

Part B (Unsustainable) : Rs.3,495.25 crore

- Out of Part B loan, a sum of Rs.3,483.25 crore has been converted into Optionally Convertible Debentures (OCDs) carrying a coupon rate of 0.01% to 2.5%. The Redemption of such OCDs shall be in 13 equal annual instalments, commencing at the end of 8th year (March 31, 2025) from date of issuance. The remaining Rs.12 crore of Part B loan has been adjusted against consideration payable to the promoters against acquisition of 10.59% of their shareholding in BHSL

- For Part A, interest and principal obligation of Term Loan and Working Capital will continue as per the existing repayment schedule. Debt servicing shall be made out of cash flows from operations, without any change in terms of repayment

Listing of securities

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

Subsidiary and Associate Companies

As on March 31, 2018, 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. Bajaj Hindusthan (Singapore) Private Limited (BHSPL) - (Holding 100%).

4. PT. Batu Bumi Persada, Indonesia - (step down subsidiary being 99.00% subsidiary of BHSPL).

5. PT. Jangkar Prima, Indonesia - (step down subsidiary being 99.88% subsidiary of BHSPL).

Associate:

1. Bajaj Ebiz Private Limited - (Holding 49.50%).

Performance and financial positions of subsidiaries and associates

a) Bajaj Aviation Private Limited: BAPL continued to provide Air Transport Services through Air Craft - Falcon LX 2000. In addition to this, the Company also leased out its Helicopter - Bell 407 to another Company providing Air Transportation Services.

b) Bajaj Power Generation Private Limited: No substantial progress could be made as regards to proposed 1980 MW (3x 660 MW) power project to be set up by the Company through its wholly-owned subsidiary, Bajaj Power Generation Private Limited (BPGPL), primarily due to non-execution of water use agreement. While the Company continued its all-out efforts to seek confirmation from Uttar Pradesh Power Corporation Limited (UPPCL) to facilitate supply of water, in absence thereof it could not obtain coal linkage from Standing Linkage Committee. On the other hand, the Company received a termination notice from UPPCL to terminate Power Purchase Agreement (PPA). The Notice was duly contested by the Company, leading to litigation in this regard. Consequently pursuant to an Order passed by Uttar Pradesh Electricity Regulatory Commission, the PPA stands terminated.

In view of progress already made during the earlier years, BPGPL is exploring various alternatives and taking necessary steps for setting up the project.

c) 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.

d) 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 including consulting, planning, implementation and testing of equipment in the field of construction of mining. These subsidiaries are in the process of development of a coal mine and received various clearances in this regard except for the forestry clearance and the clearance for the jetty site for which necessary efforts to expedite the matter with concerned authorities are being made. Operation of coal mine is expected to start in the next one year.

e) Bajaj Ebiz Private Limited: Bajaj Ebiz did not carry out any business 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.

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).

Directors and Key Managerial Personnel

Retirement by rotation

Mr. Kushagra Bajaj, (DIN: 00017575) Chairman and Managing Director of the Company will retire by rotation and being eligible offers himself for reappointment.

Appointment of Mr. Kushagra Bajaj is in compliance with the provisions of Section 164(2) of the Companies Act, 2013.

Cessation of Director

Mr. R.V. Ruia, (DIN: 00035853) Independent director resigned from the Board with effect from November 1, 2017.

Mr. Mukeshkumar S. Dave, (DIN: 07708691) Nominee director ceased to be a director of the Company with effect from March 29, 2018 pursuant to withdrawal of nomination by Punjab National Bank.

The Board placed on record its appreciation for the valuable services rendered by the aforesaid directors.

Appointment of Directors and Key managerial personnel

In accordance with the Master Restructuring Agreement with Joint Lenders, Mr. Rajeeva, (DIN: 08128796) was appointed as Nominee Director of Punjab National Bank with effect from May 26, 2018 in place of Mr. Mukeshkumar S. Dave.

Mr. Rajeeva aged 50 years is a professional banker having 25 years of experience. Mr. Rajeeva is presently designated as Circle Head, Punjab National Bank, Noida. Mr. Rajeeva holds the degree of M.A., CAIIB, MBA (Banking and Finance).

During the year under review, there is no change in Key Managerial Personnel.

Board evaluation

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.

Induction and training of Board members

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

Independent directorsâ declaration

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.

Directorsâ responsibility statement

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 of loss 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.

Auditors and auditorsâ report

Auditors and their report

M/s. Chaturvedi & Shah, Chartered Accountants (Firm Registration No.101720W) were appointed as Auditors of the Company for five consecutive years at the conclusion of the 83rd Annual General Meeting till conclusion of the 88th Annual General Meeting. The said appointment is required to be ratified by the members at the ensuing 86th Annual General Meeting.

The Statutory Audit Report does not contain any qualification, adverse remark or disclaimer made by the Statutory Auditor.

Cost auditors and their 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 2018-19 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, 2017 for the products Sugar, Industrial Alcohol and Electricity was filed with the Ministry of Corporate Affairs on October 06, 2017.

Secretarial auditors and their report

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Anant B Khamankar & Co., Company Secretaries were appointed as Secretarial Auditor of the Company. The Secretarial Audit Report is annexed as âAnnexure IIâ and forms part of this report. The report does not contain any qualification, reservation or adverse remark or disclaimer.

Public deposits

The Company has not accepted deposit 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.

Particulars of loans, guarantees or investments

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

Audit committee

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.

Related party transactions

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

Internal financial control

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to Companyâs 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.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as âAnnexure Vâ and forms part of this report.

Corporate Social Responsibility

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 âAnnexure VIâ and forms part of this report.

Policies

Policy for determining material subsidiary

During the year ended March 31, 2018, the Company does not have any material listed/unlisted subsidiary companies 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 âmaterial subsidiaryâ and the same is available on the Companyâs website at www.bajajhindusthan.com/investorcorner-policies.php

Policy on remuneration and other aspects of directors and KMP

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy on directorsâ 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 Companyâs website at www.bajajhindusthan.com/investorcorner-policies. php

Vigil mechanism/Whistle blower policy

The Company has formulated a Vigil Mechanism/Whistle Blower 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/Whistle Blower Policy are provided in the Corporate Governance Report and also posted on the website of the Company at www.bajajhindusthan.com/ investorcorner-policies.php

Risk management policy

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Companyâs 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.

Related party transaction policy

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

Corporate Social Responsibility (CSR) policy

Contents of Corporate Social Responsibility Policy in the Boardâs report are given in the Report on CSR Activities in âAnnexure VIâ and on the Companyâs website at www.bajajhindusthan.com/investorcorner-policies.php

Anti sexual harassment policy

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.

The following is the summary of sexual harassment complaints received and disposed of during the current financial year.

Number of Complaints received: Nil

Number of Complaints disposed of: Nil

Compliance with secretarial standards

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

Significant and material orders passed by the regulators or courts or tribunals

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

Particulars of employees and related disclosures

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 âAnnexure VIIâ and forms part of this report.

Transfer of unclaimed dividend and unclaimed shares to investor education and protection fund

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

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The relevant particulars regarding the above are given in âAnnexure VIIIâ and forms part of this report.

Corporate governance

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.

Management Discussion and Analysis and Business Responsibility 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 Report are prescribed in separate Sections forming part of this Annual Report.

Acknowledgements

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 Companyâs employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board of Directors

Kushagra Bajaj

Chairman & Managing Director

(DIN: 00017575)

Mumbai, May 26, 2018

Mar 31, 2017

The Directors have pleasure in presenting their Eighty Fifth annual report and the audited financial statements for the year ended March 31, 2017.

Financial highlights

The summarized financial results of the Company for the year ended March 31, 2017 are presented below:

Rs, Crore

	Year ended	Year ended
	March 31, 2017	March 31, 2016
Sales and other income	4,780.91	5,038.60
Profit/(Loss) before depreciation, interest and tax	1,017.77	949.15
Depreciation and amortization	214.12	223.98
Profit/(Loss) after depreciation but before interest and tax	803.65	725.17
Finance costs (Net)	802.07	848.38
Profit/(Loss) before tax	1.58	(123.21)
Provision for taxation (Net)	5.82	3.42
Profit/(Loss) after tax	7.40	(119.79)
Opening balance b/f	(617.58)	(497.48)
Disposable surplus after adjustments	(610.18)	(617.27)
Transfer to reserve for molasses storage tank	0.23	0.31
Carrying value of fixed assets adjusted	-	-
Balance carried to balance sheet	(610.41)	(617.58)

On a standalone basis, the Company achieved a turnover (including other income) of Rs, 4,780.91 crore for the year ended March 31, 2017 as compared to Rs, 5,038.60 crore in the previous year. The profit after tax is Rs, 7.40 crore as compared to the loss of Rs, 119.79 crore in the previous year. On a consolidated basis, the turnover including other income is Rs, 4,729.75 crore as compared to Rs, 4,979.66 crore in the previous year. The loss after tax and minority interest is Rs, 91.98 crore as against loss of Rs, 212.10 crore in the previous year.

Dividend

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

Dividend distribution policy

Operations

The Company continues to be the leading sugar and ethanol manufacturing company in India with 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.

During the year, the operations at all the sugar, distillery and co-generation plants were satisfactory.

Sugar

During the year ended March 31, 2017, the Company crushed 12.509 MMT of sugarcane as against 10.922 MMT in the previous year. The average recovery of sugar from sugarcane was marginally lower at 10.23% as against 10.32% in the previous year, primarily due to low recovery in the mills in East U.P During the year, the Company produced 12,72,424 MT sugar (previous year 11,36,070 MT) and 5,94,958 MT molasses (previous year 5,33,219 MT).

The Company sold 10,46,122 MT of sugar and 10,058 MT of molasses during the year as against 12,96,466 MT of sugar and 1,17,968 MT of molasses during the previous year.

Distillery

The Industrial Alcohol / Ethanol production was 1,11,934 KL as against 1,25,310 KL in the previous year. Alcohol / Ethanol sale during the year was at 1,09,820 KL as against 1,42,846 KL during the previous year.

Power

During the year, Power generation was at 7,29,431 MW as against 6,86,685 MW in the previous year. The Company exported 2,67,257 MW of power as against 2,66,106 MW during the previous year.

Debt restructuring

In accordance with the Master Restructuring Agreement (MRA) signed on December 30, 2014 among the Company and JLF Lenders, Funded Interest Term Loan (FITL) aggregating to Rs, 36.45 crore have been converted to equity shares on April

06, 2016. Pursuant to the conversion on April 06, 2016, entire 70% of the FITL have been converted into equity shares as per the terms of the MRA.

Changes in capital structure

An aggregate of 1,67,42,168 fully paid-up equity shares of face value Rs, 1/- each at a premium of Rs, 20.77 per equity share were allotted during the year upon conversion of Funded Interest Term Loan (FITL) aggregating to Rs, 36,44,76,997 to JLF Lenders pursuant to the Restructuring Scheme under JLF route.

Consequent to the allotment of the equity shares as aforesaid, the paid-up equity share capital of the Company stands increased from Rs, 1,11,68,17,774 divided into 1,11,68,17,774 equity shares of face value Rs, 1/- each to Rs, 1,13,35,59,942 divided into 1,13,35,59,942 equity shares of face value Rs, 1/- each, resulting into shareholding of promoters as on March 31, 2017 at 26.02% as compared to 26.41% as on March 31, 2016.

Listing of securities

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

Subsidiary and Associate Companies

As on March 31, 2017, 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. Bajaj Hindusthan (Singapore) Private Limited (BHSPL) - (Holding 100%).

4. PT. Batu Bumi Persada, Indonesia - (step down subsidiary being 99.00% subsidiary of BHSPL).

5. PT. Jangkar Prima, Indonesia - (step down subsidiary being 99.88% subsidiary of BHSPL).

Associates:

1. Bajaj Ebiz Private Limited - (Holding 49.50%).

Performance and financial positions of subsidiaries and associates

b) Bajaj Power Generation Private Limited: Uttar Pradesh Power Corporation Limited (UPPCL) had granted permission to change the location of the Company''s 1980 MW (3 x 660 MW) power project from Bargarh, District Chitrakoot to Mirchwara, District Lalitpur, subject to receipt of approval from Uttar Pradesh Electricity Regulatory Commission. The Company is in the process of obtaining requisite approvals for shifting its project.

c) 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) Bajaj Ebiz Private Limited: Bajaj Ebiz did not carry out any business during the year.

Consolidated financial statements

In compliance with Section 129(3) of the Companies Act, 2013 and Rules made there under, 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).

Directors and Key Managerial Personnel

Retirement by rotation

Mr. Ashok Kumar Gupta, Director of the Company will retire by rotation and being eligible offers himself for reappointment. Appointment of Mr. Ashok Kumar Gupta is in compliance with the provisions of Section 164(2) of the Companies Act, 2013.

Cessation of Director

Mr. Binod Kumar, Nominee director ceased to be a director of the Company with effect from May 11, 2017 pursuant to change in nomination by Punjab National Bank.

Appointment of Directors

Ms. Shalu Bhandari was appointed as an Additional Director with effect from September 17, 2016 in accordance with Section 149 of the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. Ms. Shalu Bhandari has submitted the declaration of Independence pursuant to Section 149(7) of the Companies Act, 2013, stating that she meets the criteria of Independence as provided in sub section (6) of Section 149. The Company has received a notice from a member pursuant to Section 160 of the Companies Act, 2013, proposing the appointment of Ms. Shalu Bhandari as Independent Director of the Company. The Board of Directors recommends the appointment of Ms. Shalu Bhandari as Independent Director to hold office up to September 16, 2021.

In accordance with the Master Restructuring Agreement with Joint Lenders, Mr. Mukeshkumar S. Dave was appointed as Nominee Director of Punjab National Bank with effect from May 11, 2017. In terms of the provisions of the Companies Act, 2013 and Articles of Association of the Company Mr. Mukeshkumar S Dave would hold office as Additional Director only up to the date of the 85th Annual General Meeting of the Company. The Company has received notice from a member pursuant to Section 160 of the Companies Act, 2013, proposing the appointment of Mr. Mukeshkumar S. Dave as Nominee Director of the Company. The Board of Directors recommends the appointment of Mr. Mukeshkumar S. Dave as Nominee Director of the Company. The profile of the Directors forms part of the Corporate Governance Report.

During the year under review, there is no change in Key Managerial Personnel.

Board evaluation

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.

Induction and training of Board members

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

Directors'' responsibility statement

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 judgments 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 of profit of the Company for that year;

(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.

Auditors and auditors'' report

Auditors and their report

The Statutory Auditors have confirmed their eligibility pursuant to Section 139 of the Companies Act, 2013.

The Statutory Audit Report does not contain any qualification, adverse remark or disclaimer made by the Statutory Auditor.

Cost auditors and their 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 FY 2017-18 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, 2016 for the products Sugar, Industrial Alcohol and Electricity was filed with the Ministry of Corporate Affairs on September 22, 2016.

Secretarial auditors and their report

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Anant B Khamankar & Co., Company Secretaries were appointed as Secretarial Auditor of the Company. The Secretarial Audit Report is annexed as "Annexure II" and forms part of this report. The report does not contain any qualification, reservation or adverse remark or disclaimer.

Public deposits

Particulars of loans, guarantees or investments

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

Audit committee

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.

Related party transactions

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

Internal financial control

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.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as "Annexure V" and forms part of this report.

Corporate Social Responsibility

Policies

Policy for determining material subsidiary

During the year ended March 31, 2017, the Company does not have any material listed/unlisted subsidiary companies 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

Policy on remuneration and other aspects of directors and KMP

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

Vigil mechanism/Whistle blower policy

Risk management policy

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize 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.

Related party transaction policy

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

Corporate Social Responsibility (CSR) policy

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

Anti sexual harassment policy

The following is the summary of sexual harassment complaints received and disposed of during the current financial year. Number of Complaints received: Nil Number of Complaints disposed of: Nil

Significant and material orders passed by the regulators or courts or tribunals

No significant or material order passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Particulars of employees and related disclosures

Transfer of unclaimed dividend and unclaimed shares to investor education and protection fund

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

Conservation of energy, technology absorption and foreign exchange earnings and outgo

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

Corporate governance

The Company has vigorously striven to follow the best corporate governance practices aimed at building trust among the key stakeholders, shareholders, employees, customers, suppliers (including farmers) and other stakeholders on four key elements of corporate governance - transparency, fairness, disclosure and accountability. As per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company''s Auditors conforming compliance forms part of this Report.

Management Discussion and Analysis and Business Responsibility Report

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

Acknowledgements

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.

For and on behalf of the Board of Directors

Kushagra Bajaj

Chairman & Managing Director

(DIN: 00017575)

Mumbai, May 25, 2017

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their Eighty Third annual report and the audited financial statements for the year ended March 31, 2015.

Financial highlights

The results for the Financial Year under review comprises a period of 12 months and therefore are not comparable with the results of previous period ended March 31, 2014, comprising a period of 18 months.

The summarised financial results of the Company for the year ended March 31, 2015 are presented below:

(Rs. Crore)

Year ended 18 months March 31, 2015 ended March 31 2014

Sales and other income 4,570.12 6,694.06

Profit/(Loss) before depreciation, interest and tax (115.73) (27.77)

Depreciation and amortisation 239.94 531.72

Profit/(Loss) after depreciation but before interest and tax (355.67) (559.49)

Finance costs (Net) 741.55 948.57

Profit/(Loss) before tax (1,097.22) (1,508.06)

Provision for taxation (Net) - 25.06

Profit/(Loss) after tax (1,097.22) (1,533.12)

Disposable surplus after adjustments (1,097.22) (1,532.76)

Transfer to reserve for molasses storage tank 0.28 0.55

Carrying value of fixed assets adjusted 15.16 -

Balance carried to balance sheet (2,645.97) (1,533.31)

On a standalone basis, the Company achieved a turnover (including other income) of Rs. 4,570.12 crore for the year ended March 31, 2015 as compared to Rs. 6,694.06 crore in the previous 18 months period ended March 31, 2014. The loss after tax is Rs. 1,097.22 crore as compared to the loss of Rs. 1,533.12 crore in the previous period. On a consolidated basis, the turnover including other income is Rs. 4,574.05 crore as compared to Rs. 6,668.96 crore in the previous period. The loss after tax and minority interest is Rs. 1,192.45 crore as against loss of Rs. 1,624.68 crore in the previous period.

Dividend

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

Operations

The Company continues to be the leading sugar and ethanol manufacturing company in India with 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.

During the year, the operations at all the sugar, distillery and co-generation plants were satisfactory.

Sugar

During the year ended March 31, 2015 the Company crushed 12.107 MMT of sugarcane. The average recovery of sugar from sugarcane was at 9.38% as against 9.20% in the previous period. During the year the Company produced 11,37,815 MT sugar and 6,14,634 MT molasses.

During the year the Company sold 12,39,186 MT of sugar and 33,684 MT of molasses as against 16,30,924 MT of sugar and 53,883 MT of molasses during the previous period.

Distillery

During the year Industrial Alcohol / Ethanol production was 1,25,463 KL as against 2,54,764 KL in the previous period. Alcohol / Ethanol sale during the year was at 1,09,389 KL as against 2,25,678 KL during the previous period.

Power

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 7,78,057 MW as against to 16,15,638 MW in the previous period.

The Company exported 3,29,277 MW of power during the year as against 7,02,371 MW during the previous period.

Bagasse boards

The Company also owns two Medium Density Fibre (MDF) Board manufacturing plants having capacity of 1,20,000 MT per annum and one Particle Board (PB) manufacturing plant having capacity of 35,000 MT per annum.

The operations at all plants of board division were suspended due to non-availability of adequate quantity of sugarcane bagasse at affordable prices and inadequate demand of the products in the market.

Change in name of the Company

The name of the Company was changed from Bajaj Hindusthan Limited to Bajaj Hindusthan Sugar Limited with effect from January 30, 2015 pursuant to approval received from the Registrar of Companies, Uttar Pradesh and issue of fresh certificate of incorporation upon change of name.

Debt restructuring

The sugar industry has been adversely affected over past few years due to prolonged mismatch between high raw material (cane) procurement cost and finished goods (Sugar) realisations, non settlement of subsidy claims etc. There was considerable financial pressure on the Company and, in particular on its cash flows as a result of which the Company was finding it difficult to service the debt obligations.At the request of the Company, Lenders of the Company comprising of 15 banks formed a Joint Lenders' Forum (JLF) in accordance with the Framework for Revitalising Distressed Assets in the Economy dated January 30,2014 and the Guidelines on Joint Lenders' Forum (JLF) and Corrective Action Plan (CAP) dated February 26, 2014 issued by the Reserve Bank of India (RBI) The JLF approved the corrective action plan and decided to restructure the account independent of the CDR mechanism.A detailed Techno-Economic Viability (TEV) study was conducted and the JLF finalised the Restructuring Scheme which was subject to evaluation by an Independent Evaluation Committee (IEC).

The salient features of the Scheme are as follows:

- Cut-off date (COD) - July 31, 2014.

- Outstanding Term loans to be restructured and to be repaid in 31 structured quarterly instalments after moratorium period of 2 years.

- Outstanding Working capital loans to be converted into Working Capital Term Loan (WCTL) and to be repaid in 31 structured quarterly instalments after moratorium period of 2 years.

- Outstanding Foreign currency loan from IFC, Washington to be funded by the lenders for prepayment and to be repaid in 31 structured quarterly instalments after moratorium period of 2 years.

- Funding for interest on restructured Term Loans and WCTL from August 01, 2014 to July 31, 2016 will be provided by the lenders. 70% of the Funding for interest restructured loans proposed to be converted into equity shares at a price determined by SEBI guidelines and balance 30% shall be repaid in 19 structured quarterly instalments starting from quarter ending September 30, 2016.

- Promoters contribution of Rs. 200 crore to be funded in a phased manner.

- Pledge of entire promoter's holding of the Company in favour of lenders.

- Personal guarantee/corporate guarantee from promoter/promoter group entity.

A Master Restructuring Agreement (MRA) was executed in this regard on December 30, 2014 between the Company and JLF Lenders.

In terms of the Restructuring Scheme, the restructured facilities have been secured on first pari passu charge basis on all current assets and all movable and immovable fixed assets of the Company. The said facilities are further secured by personal/corporate guarantee from promoter/promoter group. Out of the committed amount of Rs. 200 crore, an amount of Rs. 175 crore has been brought by the promoters as unsecured loan. FITL aggregating to Rs.386.10 crore have been converted to equity shares.

The Restructuring gives your Company critical support to tide over the present difficult business environment. The decision of the banks to consider and approve the Restructuring Scheme also reflects the faith these institutions have in the long term business model of the Company.

Changes in capital structure

During the year 17,08,41,266 fully paid-up equity shares of face value Rs. 1/- each at a premium of Rs. 20.77 per equity share were allotted upon conversion of Funded Interest Term Loan (FITL) aggregating to Rs. 3,71,92,14,361 to JLF Lenders pursuant to the Restructuring Scheme under JLF route.

Consequent to the allotment of the equity shares as aforesaid, the paid-up equity share capital of the Company stands increased from Rs. 63,93,99,91 1 divided into 63,93,99,91 1 equity shares of face value Rs. 1/- each to Rs. 81,02,41,177 divided into 81,02,41,177 equity shares of face value Rs. 1/- each, resulting into shareholding of promoters as on March 31, 2015 at 36.40% as compared to 46.13% as on March 31, 2014.

Listing of securities

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

Employees stock option

The validity of "Employees Stock Option Plan 2006" expired on July 16, 2014. The information required to be disclosed in terms of the provisions of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is enclosed as per "Annexure I" to this report.

Management Discussion and Analysis

Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

Subsidiary and Associate Companies

As on March 31, 2015, 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. Bajaj Hindusthan (Singapore) Private Limited (BHSPL) - (Holding 100%).

4. PT. Batu Bumi Persada, Indonesia - (step down subsidiary being 99.00% subsidiary of BHSPL).

5. PT. Jangkar Prima, Indonesia - (step down subsidiary being 99.88% subsidiary of BHSPL).

Associates:

1. Bajaj Ebiz Private Limited - (Holding 49.50%).

2. Lalitpur Power Generation Company Limited (LPGCL) - (Holding 20.97%).

Performance and financial positions of subsidiaries and associates

a) Bajaj Hindusthan (Singapore) Private Limited: BHSPL through its two subsidiaries in Indonesia, continued to hold coal mines in Indonesia which are in process of being developed.

b) Bajaj Aviation Private Limited: BAPL continued to provide Air Transport Services through Air Craft - Falcon LX 2000. In addition to this, the Company also leased out its Helicopter - Bell 407 to another Company providing Air - Transportation Services.

c) Bajaj Power Generation Private Limited: Uttar Pradesh Power Corporation Limited (UPPCL) had granted permission to change the location of the Company's 1980 MW (3 x 660 MW) power project from Bargarh, district Chitrakoot to Mirchwara, district Lalitpur, subject to receipt of approval from Uttar Pradesh Electricity Regulatory Commission.

The Company is in the process of obtaining requisite approvals for shifting its project.

d) Lalitpur Power Generation Company Limited: The project work on 1980 MW (3 x 660 MW) super critical thermal power project at Lalitpur, (Uttar Pradesh) being implemented through LPGCL has progressed satisfactorily. LPGCL has obtained all the major clearances/approvals including Environment Clearance, Pollution Clearance, Stack Height Clearance, Defense Clearance, Boiler License, Factory License, License for storage of petroleum products, Consent to Operate for Unit 1 (660 MW) etc.

LPGCL has signed MoU with Central Coalfields Limited (CCL) on April 11, 2014 for supply of 3.39 million tonnes per annum (MTPA) of domestic Coal for 2 Units of 660 MW each. This MoU has been extended up to March 31, 2016 and under this MoU, Company has already started receiving coal for start-up of Unit 1. LPGCL has also signed two Fuel supply agreement (FSA) for supply of imported coal with PT Kresna group, Indonesia and PT Jangkar Prima, Indonesia for 4 MTPA each. Unit 1 of 660 MW has been synchronised successfully. Construction work of other two units (of 660 MW each) is also in advanced stages of completion.

During the year, cost of the Project was revised to Rs. 17,295 crore (including working capital margin) due to change in existing scope of the project, additional work as mandated by Government which was not envisaged earlier, escalation in IDC and soft cost etc. The Project is being funded by the Consortium of lenders in debt equity ratio of 75:25 i.e. debt of Rs. 12,972 crore, including ECB borrowing for USD 150 Million (i.e. Rs. 929 crore) and Equity of Rs. 4,323 crore. Till date, Lenders have disbursed total term loan amounting to Rs. 10,251.33 crore, consisting of rupee term loan amount to Rs. 9,322.33 crore and ECB loan amounting to US$ 150 million.

e) Bajaj Ebiz Private Limited: Bajaj Ebiz did not carry out any business 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.

Consolidated financial statements

In compliance with Section 129(3) of the Companies Act, 2013 and Rules made thereunder, Accounting Standards 21, 23 and 27 of Companies (Accounting Standards) Rules,2006 and pursuant to the listing agreement with the stock exchanges, 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).

Directors and Key Managerial Personnel

Cessation

Mr. Shishir Bajaj (DIN: 00017612), Chairman & Managing Director and Mr. D.S. Mehta (DIN: 00038366), Independent Director resigned from the Company on October 17, 2014. Mr. Manoj Maheshwari (DIN: 02581704), Director & Group CFO and Dr. Sanjeev Kumar (DIN: 00364416), Executive Director of the Company resigned with effect from March 30, 2015.

The Board placed on record its appreciation for the valuable services rendered by the aforesaid directors.

Retirement by rotation

Mr. Ashok Kumar Gupta (DIN: 02608184), Director of the Company will retire by rotation and being eligible offers himself for re-appointment. Appointment of Mr. Ashok Kumar Gupta is in compliance with the provisions of Section 164(2) of the Companies Act, 2013.

Appointment and re-designation

Mr. Kushagra Bajaj (DIN: 00017575), was re-designated as Chairman & Managing Director of the Company with effect from October 18, 2014.

Mrs. Kiran Anuj was appointed as Additional (woman) Director with effect from March 30, 2015 in accordance with Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In terms of the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Kiran Anuj would hold office as Additional Director only up to the date of the 83rd Annual General Meeting of the Company. The Company has received notice from a member pursuant to Section 160 of the Companies Act, 2013, proposing the appointment of Mrs. Kiran Anuj as Director of the Company. The Board of Directors recommends the appointment of Mrs. Kiran Anuj as Director of the Company.

Appointment of Independent Directors

The shareholders at the Annual General Meeting held on August 12, 2014 appointed Mr. M.L. Apte (DIN: 00003656), Mr. R.V Ruia (DIN: 00035853) Mr. Alok Krishna Agarwal (DIN: 00127273) and Mr. D.K. Shukla (DIN: 00025409) as Independent Directors as per Section 149 of the Companies Act, 2013 for a term up to March 31, 2019. The Independent Directors have submitted the declaration of Independence pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of Independence as provided in sub section (6) of section 149. The profile of the Independent Directors forms part of the Corporate Governance Report.

Changes in Key Managerial Personnel

Pursuant to the provisions of the Companies Act, 2013 the Company have Chairman & Managing Director, Company Secretary and Chief Financial Officer as Key Managerial Personnel. Details of changes in KMPs during the year are given below:

Name Changes in KMP

Mr. Shishir Bajaj, Chairman & Cessation with effect from Managing Director October 17, 2014

Mr. Kushagra Bajaj, Chairman Elevated as Chairman & & Managing Director Managing Director with effect from October 18, 2014

Mr. Anand Kumar Kanodia, Cessation with effect from Chief Financial Officer October 18, 2014

Mr. Ved Prakash Agrawal, Appointment with effect from Chief Financial Officer October 18, 2014

Board evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 & Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Induction and training of Board members

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

Directors' responsibility statement

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 of loss of the Company for that period;

(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.

Auditors and auditors' report

Auditors and their report

As per Section 139(2) of the Companies Act, 2013, an audit firm shall appoint or re-appoint for two terms of five consecutive years. At the last Annual General Meeting held on August 12, 2014, M/s. Chaturvedi & Shah, Chartered Accountants (Firm Registration No.101720W) were appointed for the remaining one year of their first term as Auditors of the Company. First term of M/s. Chaturvedi & Shah, Chartered Accountants, existing Statutory Auditors will end at the conclusion of the ensuing (83rd) Annual General Meeting.

On recommendation of the Audit Committee, the Board of Directors recommends to the shareholders the re-appointment of M/s. Chaturvedi & Shah as Auditors of the Company for a further period of 5 consecutive years up to the conclusion of the 88th Annual General Meeting. The Statutory Auditors have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and they are not disqualified for re-appointment.

The Statutory Audit Report does not contain any qualification, adverse remark or disclaimer made by the Statutory Auditor. The reservations made by the Statutory Auditors under para "Emphasis of Matter" alongwith notes no. 36(I)(a)(iv), 40 and 42 are self explanatory and do not call for any further information and explanation or comments under Section 134(3)(f) of the Companies Act, 2013.

Cost auditors and their report

Pursuant to the directives of the Central Government under the provisions of Section 148 of Companies Act, 2013, M/s. B.J.D. Nanabhoy & Co., Cost Accountants, Mumbai (Firm Registration No. 000011) were appointed as the Cost Auditors of the Company. The cost auditors have submitted the Cost Audit Reports to the Central Government within the time limit of 180 days from the end of the extended financial year of 18 months ended on March 31, 2014 for the following products:

SI. Product Report submitted Financial Date of No. with Central year ended filing Government 1 Sugar Cost Audit Report 31.03.2014 26.09.2014 2 Industrial Alcohol Cost Audit Report 31.03.2014 26.09.2014 3 Electricity Cost Audit Report 31.03.2014 26.09.2014

Secretarial auditors and their report

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Anant B Khamankar & Co., Company Secretaries were appointed as Secretarial Auditor of the Company. The Secretarial Audit Report is annexed as "Annexure II" and forms part of this report. The report does not contain any qualification, reservation or adverse remark or disclaimer.

Public deposits

The Company has not accepted deposit 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.

Particulars of loans, guarantees or investments

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

Audit committee

The Company constituted Audit Committee as required under Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 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 the Audit Committee.

Related party transactions

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

Internal financial control

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.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as "Annexure V" and forms part of this report.

Corporate Social Responsibility

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.

Policies

Policy for determining material subsidiary

During the year ended March 31, 2015, the Company does not have any material listed/unlisted subsidiary companies as defined in Clause 49 of the Listing Agreement. 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-policie.php

Policy on remuneration and other aspects of directors and KMP

The Board has, on the recommendation of the Nomination & 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 Company's website at www.bajajhindusthan.com/investorcorner-policies.php

Vigil mechanism/Whistle blower policy

The Company has formulated a Vigil Mechanism/Whistle Blower Policy in accordance with Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing agreement. The details of the Vigil Mechanism/Whistle Blower Policy are provided in the Corporate Governance Report and also posted on the website of the Company at www.bajajhindusthan.com/ investorcorner-policies.php

Risk management policy

The Company has a Risk Management Policy to identify, 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 level 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.

Related party transaction policy

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

Corporate Social Responsibility (CSR) policy

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

Anti sexual harassment policy

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.

The following is the summary of sexual harassment complaints received and disposed off during the current financial year.

Number of Complaints received: Nil Number of Complaints disposed off:Nil

Significant and material orders passed by the regulators or courts or tribunals

No significant or material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

Particulars of employees and related disclosures

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.

Transfer of amounts to investor education and protection fund

The amounts of dividend, sum of matured fixed deposits, sum of interest on matured deposits, etc. which has remained unpaid or unclaimed for 7 years have been transferred to the Investor Education and Protection Fund within time stipulated by law on respective due dates in accordance with the provisions of Section 124(5) of the Companies Act, 2013.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

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

Corporate governance

The Company has vigorously striven to follow the best corporate governance practices aimed at building trust among the key stakeholders, shareholders, employees, customers, suppliers (including farmers) and other stakeholders on four key elements of corporate governance - transparency, fairness, disclosure and accountability. As per Clause 49 of the listing agreement, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company's Auditors conforming compliance forms part of this Report.

Acknowledgements

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.

For and on behalf of the Board of Directors

Kushagra Bajaj Chairman & Managing Director (DIN: 00017575)

Mumbai, July 08, 2015

Sep 30, 2012

The Directors have pleasure in presenting their Eighty First annual report and the audited statement of accounts for the financial year ended September 30, 2012.

Amalgamation of Bajaj Eco-Tec Products Limited

The Scheme of Amalgamation of wholly-owned subsidiary Bajaj Eco-Tec Products Limited (BEPL) with the Company in terms of the provisions of Sections 391 and 394 of the Companies Act, 1956 ("the scheme") with the Appointed Date as April 01, 2012 was unanimously approved by the Equity Shareholders of the Company, and also by the Secured Creditors and Unsecured Creditors of the Company and BEPL at their respective court convened meetings held on June 16, 2012.

Subsequently, upon sanction of the Scheme vide Orders passed by the Hon''ble High Court of Judicature at Bombay on September 14, 2012 and completion of other formalities in this regard on October 01, 2012 by both the Companies, the Scheme has become effective from October 01, 2012.

Financial Results

The summarised financial results of the Company for the year ended September 30, 2012 are presented below:

2011-2012 2010-2011 (Rs. Crore) (Rs. Crore)

Sales and other income 4,368.78 4,919.15

Profit before depreciation, interest and taxation 563.91 865.80

Depreciation & amortisation 348.82 330.91

Profit after depreciation but before interest and taxation 215.09 534.89

Finance costs (Net) 536.41 515.95

Profit / (Loss) before taxation (321.32) 18.94

Provision for taxation (Net) 0.99 2.63

Provision for deferred tax (87.74) 4.31

Profit / (Loss) after tax (234.57) 12.00

Disposable surplus after adjustments (18.36) 253.81

Transfer to reserve for molasses storage tank 0.37 0.31

Transfer to general reserve - 9.01

Transfer from general reserve 255.58 -

Proposed dividend 6.39 9.14

Corporate dividend tax on proposed dividend 1.04 1.48

Amount pursuant to scheme of amalgamation (229.42) -

Balance carried to balance sheet - 233.87

On a stand-alone basis, the Company achieved a turnover of Rs. 4,368.78 crore as compared to Rs. 4,919.15 crore in the previous year mainly due to lower volume of sugar sales in 2011-12 and sale of raw sugar in 2010-11 inspite of higher production and higher sales realisation as compared to the previous year. The loss after tax stood at Rs. 234.57 crore as compared to the profit of Rs. 12.00 crore in the previous year. On a consolidated basis, the turnover including other income was Rs. 4,451.30 crore compared to Rs. 5,081.90 crore in the previous year. The loss after tax and minority interest is Rs. 320.11 crore as against profit of Rs. 21.45 crore in the previous year.

The financial and operating results for current financial year are not strictly comparable with those of previous financial year 2010-11 to the extent that current financial year includes figures pertaining to the erstwhile subsidiary Bajaj Eco-Tec Products Limited for half year viz. from Appointed Date as April 01, 2012 to September 30, 2012 consequent upon the merger of BEPL with the Company whereas in the previous year these were for the Company only.

Dividend

The Board of Directors of the Company recommend, for consideration of shareholders at the 81st Annual General Meeting, payment of dividend of 10% (Rs. 0.10 per share) on equity shares of the face value of Rs. 1/- each for the year ended September 30, 2012. The dividend paid during the previous year was 40%. Despite absence of profits during the year, the proposed dividend of 10% being the maximum amount payable out of the Reserves as per provisions of "The Companies (Declaration of Dividend out of Reserves) Rules 1975" is recommended to maintain the continuity in payment of dividend of the Company.

Operations

The Company continues to be the number one sugar and ethanol manufacturing company in India with 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 443 MW, two MDF manufacturing plants having capacity of 1,20,000 MT per annum and one PB manufacturing plant having capacity of 35,000 MT per annum.

Sugar

The operations during the financial year ended September 30, 2012 at all the fourteen sugar plants were satisfactory

During the financial year 2011-12, the Company crushed 12.756 MMT of sugarcane and processed 671.2 MT of raw sugar. The recovery of sugar from sugarcane was at 9.14% as against 9.31% in the previous year.

The Company produced 1 1,65,761 MT sugar from sugarcane and 611 MT sugar from raw sugar and 6,47,585 MT molasses during the financial year 2011-12.

The Company sold 11,38,494 MT of sugar as against 13,74,407 MT during the previous year, registering a decline of 17%. The Company also sold 95,407 MT of molasses as against 96,497 MT in the previous year.

Distillery

During the year, Industrial Alcohol / Ethanol production was higher at 1,45,156 KL as compared to 89,059 KL in the previous year. Alcohol / Ethanol sale during the year was higher at 1,48,835 KL as against 1,24,366 KL during the previous year, reporting an increase of 20%.

Power

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

Power generation was substantially higher at 8,21,215 MW as compared to 5,56,578 MW in the previous year recording a growth of 48%. This was achieved primarily out of higher quantum of bagasse available from the crushing of sugarcane and optimum utilisation of co-gen capacities resulting from efficient planning. The Company exported 3,46,180 MW of power during the year as against 1,75,842 MW during the previous year, an increase of 97%.

Bagasse Boards

During the period from April 01, 2012 (Appointed Date of Amalgamation) to September 30, 2012, the Company manufactured 4,905 MT of Particle Board (PB) and 10,118 MT of Medium Density Fibre Board (MDF) at its two plants at Kinauni and Palia Kalan, respectively. Operations at the Kundarkhi plant remained suspended due to non-availability of adequate quantity of sugarcane bagasse in and around that area.

The Company sold 5,513 MT of PB and 14,415 MT of MDF during the period.

Change in Capital Structure

Rights Issue

An aggregate of 41,10,42,800 equity shares were allotted to the eligible shareholders on October 31, 2011 against the valid applications for the Rights Issue of equity shares in the ratio of two equity shares at a price of Rs. 36 per share for every one equity share held announced by the Company in the last year. Consequent to allotment of the aforesaid shares, the paid-up equity share capital of the Company increased from Rs. 22,83,57,111 to 63,93,99,911.

Out of the aggregate proceeds of Rs. 1,479.75 crore from this Rights Issue, as on September 30, 2012, the Company has utilised Rs. 1,374.98 crore towards the repayment of loan, Rs. 40.88 crore towards general corporate purposes and Rs. 37.87 crore towards issue expenses aggregating to Rs. 1,453.73 crore. The balance Rs. 26.02 crore has been utilised for temporary reduction of working capital loan which would be redrawn, when necessary as stated in the letter of offer.

Listing of Securities

The Company''s equity shares are listed on the BSE Limited and The National Stock Exchange of India Limited. The Annual Listing fees to each of these Stock Exchanges have been paid by the Company. The Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange and London Stock Exchange.

Employees Stock Option

The information required to be disclosed in terms of the provisions of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is enclosed as per Annexure II to this report.

Management Discussion and Analysis

Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

Subsidiaries

As on September 30, 2012, the Company had the following Subsidiaries, all of them are presently unlisted:

1. Bajaj Aviation Private Limited

2. Lalitpur Power Generation Company Limited

3. Bajaj Power Generation Private Limited

4. Bajaj Hindusthan (Singapore) Pte. Ltd.

In terms of General Circular No. 2/2011 dated February 08, 2011 issued by the Government of India, Ministry of Corporate Affairs granting general exemption under Section 212 of the Companies Act, 1956, and consent of the Board of Directors vide their resolution passed at the Board Meeting, the Company has not attached with its Balance Sheet as at September 30, 2012, copies of the balance sheet, statement of profit and loss and reports of the Board of Directors and Auditors of the Company''s subsidiaries and has disclosed the requisite information in the Consolidated Balance Sheet as at September 30, 2012.

Pursuant to the General Circular No. 2/2011 dated February 08, 2011 the Company hereby undertakes that:

I. Annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time.

II. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholder in the registered office of the Company and of the subsidiary companies concerned.

III. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

Subsidiaries'' Operations

Bajaj Eco-Tec Products Limited (Amalgamated with BHL)

During the year ended March 31, 2012, Bajaj Eco-Tec Products Limited (BEPL) recorded a turnover of Rs. 122.25 crore as compared Rs. 160.37 crore in the previous year. The Net Loss after Tax was Rs. 55.36 crore as against Rs. 49.53 crore recorded during the previous year. The reduction in turnover was primarily on account of lower availability of main raw material - sugarcane bagasse - in and around the areas near all the three factories of BEPL. Scarce availability of raw material, higher raw material prices, high finance cost, general inflationary conditions and lower realisation continued to put margins under pressure.

In order to improve the Medium Density Fibre Board and Particle Board operations by minimising the impact of tax outgoings on the prices of these bagasse boards and to improve the efficiencies by reducing cost of supervision and management, the Board of Directors of both BEPL and BHL approved a Scheme of Amalgamation of BEPL with BHL. The Orders sanctioning the Scheme was passed by the Hon''ble High Court of Bombay on September 14, 2012. Upon accomplishment of the applicable formalities under the law, the Scheme has come into effect from October 01, 2012 and BEPL stood dissolved without winding up. The appointed date fixed for the Scheme was April 01, 2012.

Bajaj Aviation Private Limited

Bajaj Aviation Private Limited (BAPL), was a wholly-owned subsidiary of Bajaj Eco-Tec Products Limited (BEPL) and accordingly after amalgamation of BEPL with BHL, BAPL became a wholly-owned subsidiary of BHL. During the year ended September 30, 2012, BAPL generated an income of Rs. 0.96 crore and posted net loss of Rs. 1.54 crore.

Bajaj Energy Private Limited (ceased to be subsidiary w.e.f. March 19, 2012)

Bajaj Energy Private Limited (BEnPL) was implementing projects for thermal power having generation capacity of 450 MW and projects at all five locations in the State of Uttar Pradesh were successfully commissioned during March and April, 2012.

As on March 31, 2012, BEnPL has earned revenue of Rs. 20.14 crore from sale of power and Rs. 0.01 crore from Interest on Fixed Deposits for the year ended March 31, 2012. Total expenses incurred during the year was at Rs. 32.58 crore. The loss after tax was at Rs. 12.43 crore for the year ended on that date. Earning per share was Rs. (7.78). BEnPL sells power generated from its projects to Uttar Pradesh Power Corporation Limited in terms of Power Purchase Agreement at a provisional price of Rs. 4/- per unit which is subject to upward revision on finalisation of tariff.

BENPL had allotted 1,96,05,882 equity shares of the face value of Rs. 10/- each on March 19, 2012. Consequent to said allotment, BEnPL ceased to be a subsidiary of Bajaj Hindusthan.

Lalitpur Power Generation Company Limited

The Company was awarded 1,980 MW (3x660 MW) mega thermal power project at Lalitpur, Uttar Pradesh which is being implemented through Lalitpur Power Generation Company Limited (LPGCL), SPV created for this purpose.

The estimated cost of project is Rs. 12,000 crore.

LPGCL has entered into a facility agreement dated August 24, 2011 with Consortium of lenders for term loan financing of Rs. 8,886 crore.

LPGCL has acquired 1288.76 acres land till date out of the total estimated land requirement of 1320 acres. LPGCL has also obtained all clearances including major ones from Irrigation Department, Ministry of Environment and Forest (MoEF) and Uttar Pradesh Pollution Control Board (UPPCB) etc. The Boiler Turbine Generators (BTG) and Balance of Plant (BoP) orders through International Competitive Bidding route have also been placed.

LPGCL''s application for domestic coal duly recommended by Central Electricity Authority and Ministry of Power is submitted to Ministry of Coal and shall be taken up in the next Standing Linkage Committee meeting. The Company has also made arrangements for procuring imported coal from Indonesia to meet 100% fuel requirements of the project until domestic coal is awarded to the project.

Till date, LPGCL had issued and allotted 92,48,700 equity shares of Rs. 10/- each to the Company and to other promoter group companies.

Bajaj Power Generation Private Limited

Bajaj Power Generation Private Limited (BPGPL), a wholly owned subsidiary of the Company is mandated with implementation of 1,980 MW (3x660 MW) thermal power project at Bargarh, district Chitrakoot, Uttar Pradesh at an estimated cost of around Rs. 12,000 crore. BPGPL had initiated steps to acquire land in Bargarh and nearby villages and has also applied for various licenses, approvals and clearances, including application for coal linkages, required for setting up its project. BPGPL has received permission from Joint Secretary,

Uttar Pradesh Government and clearance from Central Water Commission, Irrigation Planning (North) Dte., Government of India for withdrawal of water from Yamuna river for its power plant and permission from Central Ground Water Authority, Ministry of Water Resources, Government of India to withdraw ground water to facilitate construction activities at the plant site. The Irrigation Department has also accorded in-principle consent for making water available to the project from Yamuna river subject to construction of barrage on the river. BPGPL can avail water from Yamuna only on receipt of approval from the concerned legal entities of Government of India for construction of barrage across the river.

Citing delay in implementation of its project as a result of this development, application had been made to Uttar Pradesh Power Corporation Limited (UPPCL) for shifting the project site from Bargarh, district Chitrakoot to Mirchwara, district Lalitpur. UPPCL has granted permission to the Company to change the project location from Bargarh to Lalitpur subject to receipt of approval from Uttar Pradesh Electricity Regulatory Commission.

BPGPL is exploring options to develop logistical and infrastructural support for its upcoming power project.

Bajaj Internacional Participates Limitada (Subsidiary in Brazil) (ceased to be subsidiary w.e.f. January 26, 2012)

Since no operation in this Wholly Owned Subsidiary (WOS) was started, the Company had initiated steps of winding up of its operations in 2011 and the resolution for termination of Bajaj Internacional Participates Limitada (BIPL) was duly registered at the Board of Trade, Brazil on January 26, 2012 and accordingly BIPL ceased to be subsidiary of the Company with effect from January 26, 2012.

Bajaj Hindusthan (Singapore) Private Limited

Bajaj Hindusthan (Singapore) Pte. Ltd. (BHSPL), a Wholly Owned Subsidiary of the Company in Singapore engaged in trading in commodities and also exploring opportunities for coal mine acquisition in Indonesia. The Company achieved a turnover including other income of US$ 12.79 million and posted a net loss after taxation of US$ 0.13 million for the year ended March 31, 2012. Company is exploring a possibility for acquisition of coal mines in Indonesia.

Consolidated Financial Statements

In compliance with Accounting Standards 21, 23 and 27 of Companies (Accounting Standards) Rules, 2006 and pursuant to the Listing Agreement with the Stock Exchanges, the Consolidated Financial Statements form part of this Annual Report.

As directed by the Central Government and pursuant to the Accounting Standard - 21 (AS - 21) prescribed under the Companies (Accounting Standards) Rules, 2006, Consolidated Financial Statements presented by your Company include financial information about its aforesaid subsidiaries. The financial statements of BHL as well as its aforesaid subsidiaries will be available on the website of the Company (www.bajajhindusthan.com).

Directors

Mr. Manoj Maheshwari joined the Company in September 2007 as Chief Finance Officer (CFO) of the Company. He was inducted on the Board on whole time basis and designated as Director & Group CFO for a period of five years with effect from October 01, 2012. In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company,

Mr. Manoj Maheshwari would hold office as Additional Director (appointed with effect from October 01, 2012 at the Board Meeting held on August 14, 2012) only up to the date of the 81st Annual General Meeting of the Company. The Company has received notice from a member pursuant to Section 257 of the Companies Act, 1956, proposing the appointment of Mr. Manoj Maheshwari as Director of the Company. The Board of Directors recommends the appointment of Mr. Manoj Maheshwari as Director of the Company

Mr. Ashok Kumar Gupta joined the Company in May 1982. During his long tenure with BHL, he had gained experience in different departments and immediately prior to his induction on the Board, he was Senior President (Group Operations), Sugar & Distillery Divisions. He was inducted on the Board on whole time basis and designated as Director (Group Operations) for a period of five years with effect from October 01, 2012. In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company,

Mr. Ashok Kumar Gupta would hold office as Additional Director (appointed with effect from October 01, 2012 at the Board Meeting held on August 14, 2012) only up to the date of the 81st Annual General Meeting of the Company. The Company has received notice from a member pursuant to Section 257 of the Companies Act, 1956, proposing the appointment of Mr. Ashok Kumar Gupta as Director of the Company. The Board of Directors recommends the appointment of Mr. Ashok Kumar Gupta as Director of the Company.

Dr. Sanjeev Kumar (DIN 00364416) and Mr. Alok Krishna Agarwal (DIN 00127273), Directors of the Company, will retire by rotation and being eligible, offer themselves for re-appointment. All the appointments of the Directors of the Company are in compliance with the provisions of Section 274 (1)(g) of the Companies Act, 1956.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, as amended, with respect to the directors'' responsibility statement, it is hereby confirmed:

(i) that in preparation of accounts for the financial year ended September 30, 2012, the applicable accounting standards have been followed along with proper explanation relating to the material departures;

(ii) that the directors of the Company have 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 as at September 30, 2012 and of the loss of the Company for the year ended September 30, 2012;

(iii) that the directors of the Company have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the directors of the Company have prepared the accounts of the Company for the financial year ended September 30, 2012 on a going concern basis.

Auditors and Auditors'' Report

M/s. Chaturvedi & Shah, Chartered Accountants, existing Statutory Auditors will retire at the conclusion of the ensuing (81st) Annual General Meeting and seek re-appointment as Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Company has received certificate from M/s. Chaturvedi & Shah to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Board of Directors recommends to the shareholders the appointment of M/s. Chaturvedi & Shah as Auditors of the Company

The observations and comments given in the report of the Auditors read together with notes to accounts are self explanatory and hence do not call for any further information and explanation under Section 217(3) of the Companies Act, 1956.

International Accountants

M/s. B S R & Company, Chartered Accountants, appointed as International Accountants of the Company have submitted the report on the Company''s Consolidated Financial Statement to the Board of Directors for the year under review and the same forms a part of this report for the information of members.

Cost Auditors

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. B.J.D. Nanabhoy & Co., Cost Accountants, Mumbai (Firm Regn. No. 000011) were appointed as the Cost Auditors of the Company. The cost auditors have submitted the Cost Audit Reports to the Central Government within the time limit of 180 days from the close of the financial year for the following products:

Sl. Product Financial Date of No. year ended filing

1 Sugar 30.09.2011 21.03.2012

2 Industrial Alcohol 30.09.2011 21.03.2012

Particulars of employees

As required under the provision of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, particulars of employees are set out in Annexure-III and forms part of this report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

Transfer of amounts to Investor Education and Protection Fund

The amounts of dividend, sum of matured fixed deposits, sum of interest on matured deposit, etc. which has remained unpaid or unclaimed for 7 years have been transferred to the Investor Education and Protection Fund within the time stipulated by law on respective due dates in accordance with the provisions of Section 205C of the Companies Act, 1956.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The relevant particulars regarding the above is given in Annexure-I hereto and forms part of this report.

Corporate Governance

The Company has vigorously striven to follow the best corporate governance practices aimed at building trust among the key stakeholders, shareholders, employees, customers, suppliers (including farmers) and other stakeholders on four key elements of corporate governance -- transparency, fairness, disclosure and accountability.

Acknowledgements

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.

For and on behalf of the Board of Directors

SHISHIR BAJAJ

Chairman & Managing Director

Mumbai,

November 26, 2012

Sep 30, 2010

The Directors have pleasure in presenting their Seventy-Ninth annual report and the audited statement of accounts for the financial year ended September 30, 2010.

Amalgamation of Bajaj Hindusthan Sugar and Industries Limited

The Scheme of Amalgamation of subsidiary Bajaj Hindusthan Sugar and Industries Limited (BHSIL) with the Company in terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 ("the Scheme") with the Appointed Date as April 01, 2010 was unanimously approved by the Equity Shareholders, Secured and Unsecured Creditors of the Company as well as BHSIL at their respective court convened meetings held on September 07, 2010.

Subsequently, upon sanction of the Scheme vide Orders passed by Honble High Court of Judicature at Bombay

on November 26, 2010 and completion of other formalities in this regard on December 20, 2010 by both the Companies, the Scheme has become effective from December 20, 2010. Consequently, the financial and operating results of BHSIL with effect from the Appointed Date of the Scheme being April 01, 2010 have been included with the financial results of the Company for the financial year ended on September 30, 2010 and hence are not strictly comparable with those of previous financial year 2008-09.

Financial Results

The summarised financial results of the Company for the year ended September 30, 2010 are presented below:

2009-2010 2008-2009 (Rs. Crore) (Rs. Crore)

Sales and other income 3,028.98 1,814.89

Profit before interest, depreciation and taxation 613.82 595.29

Interest (Net) 301.34 187.08

Depreciation & Amortisation 257.44 202.21

Profit before taxation 55.04 206.00

Provision for taxation (Net) 0.10 0.66

Provision for deferred tax 3.19 49.11

Profit after tax 51.75 156.23

Disposable surplus after adjustments 204.56 161.14

Transfer to reserve for Molasses Storage Tanks 0.33 0.16

Transfer to general reserve 10.03 40.00

Transfer to debenture redemption reserve - 27.50

Proposed dividend 13.40 12.38

Corporate dividend tax on proposed dividend 2.22 2.10

Balance carried to balance sheet 178.58 79.00

On a stand-alone basis the Company achieved a turnover of Rs. 3,028.98 Crore as compared to Rs. 1,814.89 Crore in the previous year. The Profit after tax stood at Rs. 51.75 Crore as compared to the Profit of Rs. 156.23 Crore in the previous year. On consolidated basis, the turnover is Rs. 3,340.68 Crore as compared to Rs. 2,333.52 Crore in the previous year. The Profit after tax and minority interest is Rs. 44.06 Crore as compared to Rs. 61.78 Crore in the previous year.

Dividend

The Board of Directors of the Company recommend, for consideration of shareholders at the 79th annual general meeting, payment of dividend of 70% (Re.0.70 per share) on equity shares of the face value of Re.1/- each for the year ended September 30, 2010. The dividend paid during the previous year was also 70%.

Operations

The merger of subsidiary BHSIL with the Company has further consolidated BHLs leadership position in the Indian Sugar Industry. Post amalgamation the Company now has fourteen Sugar Factories with an aggregate sugarcane crushing capacity of 1,36,000 TCD, six distilleries having capacity to produce Industrial Alcohol of 800 kilolitres per day and Co-Generation plants having power generation capacity of 428 MW.

The operations during the financial year ended September 30, 2010 at all the fourteen sugar mills of the Company, six distilleries and co-generation facilities were satisfactory. Despite volatile conditions, the Company had achieved commendable results during the year 2009-10.

Sugar

During the sugar season 2009-10, the sugarcane crop acreage reduced in U.P. primarily due to defcient rainfall and relatively low sugar prices during the previous few sugar seasons. To meet the perceived shortfall in sugar production and with a view to optimise its sugar production capacity utilisation, the Company had imported an aggregate of 5,27,805 MT of raw sugar. However owing to a ban imposed in inward transportation of imported raw sugar in the U.P. state during the continuance of the sugarcane crushing season, the Company could process only 3,27,062 MT of imported raw sugar during this season. The recovery of sugar from sugarcane was higher at 9.24% as against 9.09% in the previous year owing to better quality of sugarcane crop and certain other favourable factors. The Company produced an aggregate of 10,97,380 MT Sugar and 4,42,433 MT Molasses during the sugar season 2009-10.

Initial estimate of sugar production during the crushing season 2009-10 was around 14.7 million tonnes against annual consumption of around 22 million tonnes due to which, the prices of sugar in the frst half of the year upto February, 2010 remained high. Average monthly sugar prices were in the range of Rs. 2,950 to Rs. 3,800 per qtl. during this period. However, as the Sugar price going high, with a view to check the infation, the Central Government imposed several restrictions such as fixing weekly restrictions on quantities to be sold and despatched, fixing stock limits not only for the trade but also for bulk consumers etc. At the same time, the production estimates also got revised and the actual production was 18.7 million tonnes. These resulted in a sharp correction in, the sugar prices from around Rs. 32 per kg in March, 2010 to Rs. 26 per kg in September, 2010.

During the year the Company sold 9,26,966 MT of Sugar as against 6,72,180 MT during the previous year, registering an increase of 38%. The Company also sold 54,602 MT of Molasses as against 71,120 MT in the previous year, reporting a downfall of 23% due to more molasses used for production of Alcohol during the year.

Industrial Alcohol

The operations at all the six distilleries of the Company having an aggregate industrial alcohol production capacity of 800 KL per day were satisfactory.

During the year Industrial Alcohol / Ethanol production was higher at 94,719 KL as compared to 32,070 KL in previous year recording a growth of 195%. Alcohol/ Ethanol sales during the year were also higher at 63,123 KL as against 32,128 KL during the previous year, reporting an increase of 96%.

Power

The operations of electric power generation were smooth at all of our fourteen sugar mills. While most of the power generated by us continued to be used captively for the operational needs of the Company, the surplus power is sold to the Uttar Pradesh State grid.

Power generation was higher at 4,48,901 MW as compared to 2,76,300 MW in previous year recording a growth of 62%, largely due to higher quantum of bagasse available from the crushing of sugar cane.The average price at which we sold our surplus power was approximately Rs.3,978 per 1000 Units. The Company exported 1,30,635 MW of power during the year as against 73,271 MW during the previous year, reporting an increase of 78%.

Changes in Capital Structure

Allotment of Equity Shares to Promoter upon exercise of option on Warrants allotted on preferential basis

During the year the promoters exercised their option on 1,45,00,000 Equity Warrants allotted on preferential basis during the last year. The Company has received an aggregate sum of Rs.56.70 Crore equivalent to the balance 75% of the total subscription amount on the aforesaid warrants and have allotted 1,45,00,000 fully paid-up equity shares of Re.1/- each on January 04, 2010.

Post issue of 1,45,00,000 equity shares to the Promoter group, the paid-up equity share capital of the Company has increased from Rs. 17,68,57,111 to Rs. 19,13,57,111 divided into 19,13,57,111 equity shares of face value Re. 1/- each. The net proceeds from the preferential issue were utilised in full for repayment/ prepayment of working capital loans in accordance with the terms of the issue.

Equity Shares to be allotted pursuant to the sanctioned Scheme of Amalgamation

Pursuant to the Scheme of Amalgamation of BHSIL with BHL (the Scheme) sanctioned by the Honble Bombay High Court, the Company will be required to allot an aggregate of 3,70,00,000 fully paid up equity shares of Re.1 each. These include an aggregate of 3,11,00,000 shares to be allotted to the BHL Securities Trust formed for the purpose towards non-cancellation of cross holding of 75% equity in BHSIL and principal value of loan of Rs. 335 Crore, in accordance with the terms of the Scheme. Post allotment of the aforesaid shares, the paid-up equity share capital of the Company will increase to Rs. 22,83,57,111.

Listing of Securities

The Companys equity shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Annual Listing fees to each of these Stock Exchanges have been paid by the Company. The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) are listed on the Luxembourg Stock Exchange and London Stock Exchange respectively.

Employee Stock Option

Bajaj Hindusthan Limited did not have a stock option plan. In terms of scheme of amalgamation, the outstanding options under PSIL Employees Stock Option Plan, 2006 held by the eligible employees of group companies have been transferred. Since under the Plan, BHSIL had already allotted 8.89 Crore shares to a trust, the corresponding number of equity shares in the exchange ratio of 1:5 will be allotted to the trust. The entitlement of the option granted stands changed from 10 equity shares of face value of Re. 1/- each of BHSIL to 2 equity shares of face value of Re.1/- each of BHL.

The information required to be disclosed in terms of the provisions of the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is enclosed as per Annexure II to this report.

Expansion of Power Capacity

Modifcation of Boilers for use of alternate fuel

The conversion of Bagasse fred Boiler into Multi-fuel Boiler at our Gangnauli, Kinauni & Maqsoodapur Sugar Units has been completed and put in operations successfully. Now we have option to run the Boiler on alternate fuels i.e. with Coal separately, with Bagasse separately and jointly with Bagasse & Coal as a fuel for the purpose of Power Export. We have also run the Boiler on coal as a fuel for Re-processing of Raw Sugar with Power Export to Grid during off season.

New Coal-fred Power Plants

Sugar Industry in India of late has witnessed an intense volatility in sugar prices. Considering the cyclical nature of industry the Company constantly endeavours to evolve a business model that can insulate itself from the vagaries of cyclicality of sugar business. Since the year 2003, the Company had expanded its sugar capacity rapidly from 24,000 TCD to the present capacity of 1,36,000 TCD. With no immediate plans for further expansion in sugar capacity, various opportunities for diversifcation were being explored.

The Power Industry in India (including in the State of Uttar Pradesh) has been historically characterised by energy shortages as the gap between demand and supply of power has been increasing. U.P. Government has also announced U.P. Energy Policy 2009 inviting private participation in the power sector to generate over 32,000 MW of power by 2014. The Company has been in the business of power generation through the co-generation bagasse fred power generation plants located at all of its sugar units of which major part, around 75%-80% was used for captive purpose and surplus sold to the Uttar Pradesh Government.

Considering the Companys experience in power generation and tremendous scope for growth of power and energy business, the Company has considered diversifying into power sector by setting up coal fred thermal power plants (TPP) in the state of Uttar Pradesh. To begin with the Company plans to set up around 4,500 MW of Power Generating Capacity.

Phase I Ã 450 MW

In the frst phase, the Company had commenced project for an aggregate power generating capacity of 400 MW comprising of 80 MW thermal power plants at five locations on the unused land available in the vicinity of the sugar mills of the Company at Khamberkhera, Barkhera, Maqsoodapur, Kundarkhi and Utraula all located in the State of Uttar Pradesh. Subsequently the capacity of these thermal power plants were upwardly revised to 450 MW (90 MW x 5). The project cost was estimated at around Rs. 2,320 Crore to be funded by way of debt to equity mix of 3:1.

The requisite Memorandum of Understanding and Power Purchase Agreement for these five coal based thermal power plants have been executed with the Government of Uttar Pradesh. EPC contracts and order for all the major machinery and equipments required for these power plants have been placed. The process of various environment and water clearances and other approval including coal linkages are at an advance stage.

As advised by the consortium of lenders and primarily considering the variance in parameters for debt-equity ratio for extending the projects fund to a power sector company vis-ÃÂ -vis a sugar company, it was decided to develop this 450 MW TPP through an SPV. The under construction power plants were assigned/transferred to Bajaj Energy Private Limited (BEnPL), a subsidiary of the Company.

The financial closure of Rs. 1,740 Crore for the debt portion for this the project has been achieved. More than half of the equity component of project funding has already been provided jointly by the Company and an entity belonging to its promoter group. The commercial operation of power plants at these five locations is expected to commence as the schedule within next eight to ten months.

Phase II Ã 1,980 MW at Lalitpur

The Company was awarded 1,980 MW (3X660 MW) ultra mega thermal power project at Lalitpur, Uttar Pradesh. This project is proposed to be implemented through Lalitpur Power Generation Company Limited (LPGCL), a SPV created for this purpose by the Government of U.P. The approximate cost of project is estimated at around Rs. 12,000 Crore. The Company had entered into a Memorandum of Understanding (MOU) with Government of Uttar Pradesh and have acquired LPGCL from UPPCL to make it a subsidiary of the Company with effect from December 10, 2010.

The acquisition of land for the power plant is in progress. Necessary application for coal linkage and processes of obtaining clearance for use of underground water, environmental and other clearance from relevant authorities are in progress. The discussions for appointing agency for financial closure for the projects have been initiated. The commercial operation of these power plants at Lalitpur is expected to commence around 4 to 5 years.

Phase III Ã 1,980 MW at Bargarh

The Company has also been awarded another 1,980 MW (3 x 660 MW) ultra mega thermal power project at Bargarh, district Chitrakoot, Uttar Pradesh. The cost of project is estimated at around Rs. 12,000 Crore. A Memorandum of Understanding has been executed with Government of Uttar Pradesh in this regard. The Bargarh TPP shall be implemented through another SPV Ã Bajaj Power Generation Private Limited (BPGPL), a subsidiary of the Company.

As per the terms and conditions stipulated by the Government of Uttar Pradesh, the Company is obligated to hold atleast 26% of the equity of all the above three SPVs and shall be jointly responsible with these SPVs for implementing the respective MOU. The Company expects to complete all the above projects as per the respective schedule. The diversifcation in Power Business is expected to provide the Company with the ability to perform optimally during all phases of the sugar business cycle and achieve steady cash fows to mitigate the adverse effect of cyclicality.

Bio-Gas/Power from Press Mud

In addition to the Bagasse and Molasses, the sugar mill operations also generate suffcient amount of Press mud (approximately 4% of cane crushed). At six out of fourteen units of the Group, Distilleries are attached to the Sugar Plant. In these cases, such Press mud is partly utilised gainfully in compost making with bio- methanated effuent for Distilleries to accomplish Zero Discharge and rest is sold at very nominal price. At other locations the entire quantity is sold at nominal prices. The Company has at time experienced great diffculty for disposal of the Press mud.

With around 30-35% biomass content, Press mud has the potential to be converted into biogas through anaerobically. Keeping above in consideration and also in order to utilise the Press mud valuably the Company has actively considered tapping renewable energy from industrial waste. It was considered desirable to utilise the surplus Press mud generated in the Sugar Units which do not have a distillery attached by gainfully converted it into biogas which in turn can also be consumed advantageously in power generation through Gas Engine. This is expected to create a win- win situation by resolving Press mud disposal diffculty on one hand and conserve the environment through utilisation of industrial waste in addition to becoming a source to generate income. The Cost of Setting up the project is approx Rs.16 Crores for each of the locations.

Management Discussion and Analysis

Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

Subsidiaries Operations

Bajaj Hindusthan Sugar and Industries Limited (since merged with BHL)

During the year Bajaj Hindusthan Sugar and Industries Limited (BHSIL), a 75% subsidiary of the Company has ceased to be a subsidiary of the Company pursuant to the Scheme of Amalgamation of BHSIL with the Company with effect from April 1, 2010 fxed as Appointed Date.

The Order sanctioning the Scheme was passed by the Honble High Court of Bombay on November 26, 2010. Upon accomplishment of the applicable formalities under the law, the Scheme has come into effect from December 20, 2010 and BHSIL stood dissolved without winding up. The effect of the amalgamation has been given in the books of accounts of the Company for the year ended on September 30, 2010 with effect from the Appointed Date.

Bajaj Eco-Tec Products Limited

Bajaj Eco-Tec Products Limited (BEPL) is a Wholly Owned Subsidiary of Bajaj Hindusthan Limited engaged in manufacture of Medium Density Fibre (MDF) boards and Particle boards from sugarcane bagasse.

During the financial year ended March 31, 2010 BEPL recorded a turnover (sales and other income) of Rs. 154.63 Crore as against Rs.59.48 Crore during the previous year. The Net Loss after Tax for the year was reduced to Rs. 50.57 Crore as against Rs. 73.95 Crore recorded during the previous year.

Bajaj Aviation Private Limited

Bajaj Aviation Private Limited (BAPL), is a Wholly Owned Subsidiary of Bajaj Eco-Tec Products Limited and therefore is a subsidiary of the Company. During the year ended September 30, 2010, it generated an income of Rs.1.76 Crore and posted Profit after taxation of Rs.0.67 Crore.

Bajaj Energy Private Limited (BEnPL) (formerly Bajaj Eco-Chem Products Private Limited)

During the year the proposed plans of carrying on the business of manufacture and sale of specialty chemicals through this subsidiary were abandoned. The entire pre-operative expenditure aggregating to Rs. 0.63 Crore on the aforesaid project has since been written off. The holding company Ã BHL had decided during the year to diversify into thermal power sector and this Subsidiary was proposed to be used as SPV for its initial foray in power sector by setting up five thermal power projects of 90 MW each aggregating to 450 MW involving an estimated project cost of Rs. 2,320 Crore.

The name of the Company was therefore changed from Bajaj Eco-Chem Products Private Limited to Bajaj Energy Private Limited with effect from March 19, 2010.

After obtaining approval of Government of Uttar Pradesh, these five under construction power projects were assigned to be developed by Bajaj Energy Private Limited. As per the terms and conditions stipulated by the Government of U.P., BHL is obligated to hold 26% of the equity of this SPV. Also BHL and this SPV shall have the joint responsibility for setting up these projects.

The project has been appraised by SBICAP Trustee Company Limited on behalf of a consortium of lenders and financial closure for debt aggregating to Rs. 1,740 Crore has been achieved. The equity requirement for the project has been estimated at Rs. 580 Crore. Till date, BHL has subscribed equity to the tune of Rs. 137.81 Crore and Rs. 149.88 Crore has been subscribed by an entity belonging to the promoters of BHL. Resultantly, the shareholding of BHL has come down from 100% to 51% of the paid up capital of BEnPL with effect from September 24, 2010.

The commercial operations for all these five power plants are expected to commence as per the schedule within next eight to ten months.

Bajaj Internacional ParticipaÃÂ§ÃÂµes Limitada (Subsidiary in Brazil)

During the year too, no business as envisaged to be undertaken through this Wholly Owned Subsidiary (WOS) in Brazil could be commenced. The amount invested by the Company had remained deployed in Bank Deposits. Since the company did not see any opportunity of commencing business soon, the process of its winding up and repatriation of capital has been initiated.

Bajaj Hindusthan (Singapore) Private Limited

During the year Bajaj Hindusthan (Singapore) Pte. Ltd, a Wholly Owned Subsidiary of the Company in Singapore decided to commence operations of Trading in Commodities like Sugar, Coal etc. The Company also plans to acquire a Coal Mine located in Indonesia.

To meet the fund requirements of its business, BHL has further invested a sum of US$ 27 Million equivalent to Rs. 92.31 Crore in this subsidiary.

The financial year of this subsidiary has been changed from October-September period to April-March period with effect from March 31, 2010. No business operations has been commenced upto March 31, 2010. With the aggregate expenditure during the period amounting to Rs. 0.03 Crore, the net loss for the period was Rs. 0.03 Crore and accumulated carried forward loss upto March 31, 2010 is Rs. 0.12 Crore.

Consolidated Financial Statements

In compliance with Accounting Standards 21, 23 and 27 of Companies (Accounting Standards) Rules, 2006 and pursuant to the Listing Agreement with the Stock Exchanges, the Consolidated Financial Statements form part of this Annual Report.

Subsidiaries

As per the provisions of Section 212 of the Companies Act, 1956, the Directors Report, Balance Sheet and Profit and Loss Account of the subsidiary companies are required to be attached with the Balance Sheet of a company. However, in terms of approval granted under Section 212(8) of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of India vide its letter No.47/652/2010-CL-III dated 29-07-2010, the Company has been exempted from complying with the provisions contained in sub-section (1) of Section 212 of the Companies Act, 1956 in respect of its following subsidiaries, viz:- 1. Bajaj Eco-Tec Products Limited

2. Bajaj Aviation Private Limited

3. Bajaj Internacional ParticipaÃÂ§ÃÂµes Ltda. (Brazilian subsidiary)

4. Bajaj Hindusthan (Singapore) Pvt. Ltd. (Singapore subsidiary)

5. Bajaj Energy Private Limited

As directed by the Ministry of Corporate Affairs, certain key information has been disclosed in an Annexure to the Consolidated Accounts forming part of this Annual Report.

The Company undertakes that the annual accounts of the subsidiary companies and the related detailed information will be made available to the investors of the Company and its subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any investor at the registered offce and head offce of the Company and those of its subsidiaries. The annual accounts and the details of accounts of all its subsidiary companies shall be put on the Companys website - www.bajajhindusthan.com. The hard copy of the same will be furnished to any shareholder on a written demand received in this regard.

Group

Pursuant to an intimation from the Promoters, the names of the Promoters and entities comprising "group" as Defined under the Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Directors

Mr. D.S. Mehta (DIN 00038366) and Mr. M. L. Apte (DIN 00003656), Directors of the Company, will retire by rotation and being eligible, offer themselves for re-appointment. All the appointments of the Directors of the Company are in compliance with the provisions of Section 274 (1)(g) of the Companies Act, 1956.

Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, as amended, with respect to the directors responsibility statement, it is hereby confrmed:

(i) that in preparation of accounts for the financial year ended September 30, 2010, the applicable accounting standards have been followed along with proper explanation relating to the material departures;

(ii) that the directors of the Company have 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 as at September 30, 2010 and of the Profit of the Company for the year ended September 30, 2010;

(iii) that the directors of the Company have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the directors of the Company have prepared the accounts of the Company for the financial year ended September 30, 2010 on a going concern basis.

Auditors and Auditors Report

M/s. Chaturvedi & Shah, Chartered Accountants, existing Statutory Auditors will retire at the conclusion of the ensuing (79th) Annual General Meeting and seek re-appointment as Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Company has received certifcate from M/s. Chaturvedi & Shah to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Board of Directors recommends to the shareholders the appointment of M/s. Chaturvedi & Shah as Auditors of the Company.

The observations and comments given in the report of the Auditors read together with notes to accounts are self explanatory and hence do not call for any further information and explanation under Section 217(3) of the Companies Act, 1956.

International Accountants

M/s. B S R & Company, Chartered Accountants, appointed as International Accountants of the Company have submitted the report on the Companys Consolidated Financial Statement to the Board of Directors for the year under review and the same forms a part of this report for the information of members.

Cost Auditors

The Central Government has directed an audit of the cost accounts maintained by the Company in respect of sugar and industrial alcohol businesses. For conducting the cost audit for these businesses for the financial year ended September 30, 2010, the Central Government has approved the appointment of M/s. B.J.D. Nanabhoy & Co., Cost Accountants, Mumbai.

Particulars of employees

As required under the provision of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, particulars of employees are set out in the Annexure- III and forms part of this report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered offce of the Company.

Transfer of amounts to Investor Education and Protection Fund

The amounts of dividend, interest on debenture and matured debentures, interest on fxed deposits and matured fxed deposits, etc. which has remained unpaid or unclaimed for 7 years have been transferred to the Investor Education and Protection Fund within time stipulated by law on respective due dates in accordance with the provisions of Section 205C of the Companies Act, 1956.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The relevant data regarding the above is given in the Annexure-I hereto and forms part of this report.

Corporate Governance

The Company has vigorously striven to follow the best corporate governance practices aimed at building trust among the key stakeholders, shareholders, employees, customers, suppliers (including farmers) and other stakeholders on four key elements of corporate governance - transparency, fairness, disclosure and accountability.

Acknowledgements

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 Companys employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board of Directors

SHISHIR BAJAJ

Chairman & Managing Director

Mumbai, December 20, 2010

Sep 30, 2009

The Directors have pleasure in presenting their Seventy-eighth annual report and the audited statement of accounts for the financial year ended September 30, 2009.

Financial Results

The summarised Financial results of the Company for the year ended September 30, 2009 are presented below:

2008-09 2007-08 (Rs.million) (Rs.million)

Sales and other income 18,148.94 18,028.72

Profit before interest, depreciation and Taxation 5,952.94 2,185.44

Interest (Net) 1,870.77 1,394.44

Depreciation 2,022.13 1,872.21

Profit/(Loss) before taxation 2,060.04 (1,081.21)

Provision for taxation (including Fringe Benefit Tax) 6.60 13.80

Provision for deferred tax (Net) 491.07 (618.17)

Profit/(Loss) after tax 1,562.37 (476.84)

Disposable surplus after adjustments 1,609.82 164.53

Transfer to general reserve 400.00 -

Transfer to debenture redemption reserve 275.00 -

Proposed dividend 123.80 84.84

Corporate Dividend Tax on Proposed Dividend 21.04 14.42

Balance carried to balance sheet 789.98 65.27

On a stand-alone basis the Company achieved a turnover of Rs. 18,148.94 million as compared to Rs. 18,028.72 million in the previous year. The Profit after tax stood at Rs. 1,562.37 million as compared to the loss of Rs. 476.84 million on the previous year. On consolidated basis, the turnover is Rs. 23,335.19 million as compared to Rs. 21,202.60 million in the previous year. The profit after tax and minority interest is Rs. 617.84 million compared to a loss after tax and minority interest of Rs. 1,574.22 million in the previous year.

Dividend

The Board of Directors of the Company recommend, for consideration of shareholders at the 78th annual general meeting, payment of dividend of 70% (Re. 0.70 per share) on equity shares of the face value of Re. 1/- each for the year ended September 30, 2009. The dividend paid during the previous year was 60% (Re. 0.60 per share) on equity shares of face value of Re. 1/- each.

Operations

The financial year 2008-09 witnessed lower than demand sugar production in India for the second year in a row. The situation was primarily caused by a lower availability of sugarcane-the principal raw material for Companys operations-which was on a decline due to various factors like crop switching, climate, sugarcane yield, sugar recovery, etc. The increase in the minimum support prices (MSP) of alternative crops, especially wheat and paddy, increased as a CAGR of around 18% in past three years, resulted in a quantum jump in the wheat and paddy production levels in the past five years. The rate of sugar recovery was relatively lower due to adverse agro-climatic conditions. The average recovery rate declined to 9.09% from 9.99% in the 2007-2008 Sugar Season (SS), and caused the overall production of sugar to decline. Lower sugarcane availability coupled with lower recovery during the season 2008-09 resulted in lower production of sugar and other downstream products-industrial alcohol, power, etc. - by the Company.

On the other hand, this resulted in emerging of situation of deficit inventory in the Indian Sugar industry from the earlier position a surplus inventory situation. Imports of sugar in India were also on a rise during the 2008-2009 SS and are expected to rise further during in 2009-2010 SS to balance the sugar inventory levels within the country. Resultantly, the sugar prices in India started firming up during the year and are expected to rise further in the coming year.

The operations during the financial year ended September 30, 2009 at all the ten sugar mills of the Company having an aggregate sugarcane crushing capacity of 96,000 TCD, five distilleries having an aggregate capacity of 640 KL of industrial alcohol per day and co-generation facilities which have an aggregate installed capacity of 340 MW were satisfactory. Despite adverse conditions and lower production, the Company had achieved commendable results during the year 2008-09.

Sugar

The decrease in overall availability of sugarcane during the Sugar Season (SS) 2008-09 also affected the Company. The sugarcane crushing was lesser by around 46% with relatively shorter duration of crushing operations in all of its sugar mills ranging from 68 to 123 days during SS 2008-09 as against the duration ranging from 92 to 142 days during the previous SS 2007-08. The aggregate sugarcane crushed by the Company during SS 2008-09 dropped to 5.425 Million MT (MMT) as against 10.012 MMT in SS 2007-08. Further more the unfavourable weather conditions also caused a reduction in recovery rate by around 0.90% - from an average recovery of 9.09% during SS 2008-09 as against that of 9.99% achieved in SS 2007-08. As a result, the sugar production during SS 2008-09 dropped to 4,93,268 tonnes compared to 9,99,890 tonnes during the preceding SS 2007-08.

The sugarcane price in form of State Advised Price (SAP) was fixed at Rs.140 per quintal in SS 2008-09 by the state government of Uttar Pradesh. The higher SAP coupled with lower sugarcane availability and lower recovery rate resulted in an increase per unit cost of production of sugar - from an average cost of about Rs.1,657 per quintal in SS 2007-08 to Rs.2,019 per quintal in SS 2008-09.

The sugar prices however began to rise during the second half of the financial year 2008-09, mainly due to depleting sugar inventory levels in the country. The average selling price of free sale sugar, being 90% of the total quantity of sugar produced by the Company was up by around 41% - to about Rs. 2,205 per quintal during the financial year 2008-09, as against Rs. 1,563 per quintal during financial year 2007-08. On the other hand, for the remaining 10% of the total quantity of sugar produced by the Company, as required to be sold to the Public Distribution System, remained unchanged at Rs. 1,333 per quintal. The profitability of sugar segment of the Company during the year 2008-09 was Rs.1,594.77 million as against a loss of Rs. 602.64 million in the previous year.

Industrial Alcohol

The operations at all the five distilleries of the Company having an aggregate industrial alcohol production capacity of 640 KL per day were satisfactory. The total production of industrial alcohol during the year 2008-09 however was lower 52,469 KL as against 139,260 KL in the year 2007-08, primarily due to lower availability of molasses which in turn can be attributed to the lower availability of sugarcane. Ethanol, which is the major contributory for the industrial alcohol segment of the Company, continued to be sold to the oil companies in India at the price determined through a competitive tender mechanism. While average ethanol prices during the year 2008-09 were constant at Rs.22.0 per litre, the average prices of other types of industrial alcohol during the year significantly up to Rs. 28.33 per litre as against Rs.19.01 per liter in the previous year. In quantitative terms, Ethanol sales constituted around 64% of our industrial alcohol sales during the financial year 2008-09, while the other products like denatured spirit and extra neutral alcohol together constituted the balance 36%. Lower capacity utilisation during the year resulted in Distillery segment incurring a loss of Rs.68.38 million as against the profit of Rs.587.71 million in the preceding year.

Power

The operations of electric power generation were smooth at all of our ten sugar mills. While most of the power generated by us continued to be used captively for the operational needs of the Company, the surplus power is sold to the Uttar Pradesh State grid. Lower sugarcane crop also impacted the availability of the by-product bagasse- the fuel presently used by the Company to generate power.

The average price at which we sold our surplus power was approximately Rs.3.08 per KWH. The profit earned by the power segment of the Company during the year 2008-09 was also lower at Rs.484.04 million as against a profit of Rs. 887.57 million in the previous year.

Change in Capital Structure

During the year, the Company had focused on measures to improve in its net worth.

Preferential Allotment to Promoter

Your Company issued and allotted 14,500,000 Equity Warrants on preferential basis to the Promoter Group on May 18, 2009, entitling the warrant holder to apply for and be allotted one fully paid Equity Share of the Company of Re.1/- each at a premium of Rs.51.14 per share in accordance with applicable SEBI guidelines.

An aggregate sum of Rs.189.01 million equivalent to 25% of the total subscription amount was received prior to the allotment of warrants. The balance 75% is payable by the warrant holders anytime on or before expiry of 18 months from the date of allotment of warrants, prior to exercise of option to apply for the equity shares.

Qualified Institutions Placement

During the year, the Company has successfully raised equity funds of approximately Rs. 7,231.80 million equivalent to approximately US$ 150.19 million under a Qualified Institutions Placement (QIP) in accordance with the applicable SEBI Guidelines. The Company has allotted an aggregate of 35,450,000 Equity Shares of Re.1/- each at a premium of Rs. 203 per share to certain Qualified Institutional Buyers (QIBs) on July 3, 2009.

Post issue of 35,450,000 equity shares to the QIBs, the paid-up equity share capital of the Company has increased from Rs. 14,14,07,111/- to Rs. 17,68,57,111/-, divided into 176857111 equity shares of face value Re. 1/- each. The net proceeds from the QIP issue was utilized in full for repayment/ prepayment of debts in accordance with the terms of the issue.

Re-purchase of Foreign Currency Convertible Bonds

The Company had issued Zero Coupon Foreign Currency Convertible Bonds (the ÃFCCBsÃ) aggregating to US$ 120 million in 2006. These bonds are convertible into equity shares of the Company or Global Depository Receipt representing equity shares before February 2011. With FCCBs aggregating to US$ 0.5 million having been converted earlier, FCCBs of the face value aggregating to US$ 119.50 million were outstanding.

Pursuant to the guidelines issued by the Reserve Bank of India for prepayment/re-purchase (buyback) of Bonds issued by Indian companies, the Company through a combination of ÃOpen MarketÃ and a ÃTender OfferÃ to Bondholders, had repurchased bonds of face value aggregating to US$ 19.93 million at an average discount of 9% of the face value of FCCBs, which were subsequently cancelled. The aggregate principal amount of bonds that are currently outstanding is US$ 99.57 million.

Listing of Securities

The Companys shares are listed on the Bombay and National Stock Exchanges. The Annual Listing fees to each of these Stock Exchanges have been paid by the Company. The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) are listed on the Luxembourg Stock Exchange and London Stock Exchange respectively.

Subsidiaries

As per the provisions of Section 212 of the Companies Act, 1956, the Directors Report, Balance Sheet and Profit and Loss Account of the subsidiary companies are required to be attached with the Balance Sheet of a company. However, in terms of approval granted under Section 212(8) of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of India vide its letter No. 47/ 687/2009-CL-III dated 14-10-2009, the Company has been exempted from complying with the provisions contained in sub-section (1) of Section 212 of the Companies Act, 1956 in respect of its following subsidiaries, viz:- 1. Bajaj Hindusthan Sugar and Industries Limited

2. Bajaj Eco-Tec Products Limited

3. Bajaj Aviation Private Limited

4. Bajaj Internacional ParticipaÃÂ§ÃÂµes Ltda. (Brazilian subsidiary)

5. Bajaj Hindusthan (Singapore) Pvt. Ltd. (Singapore subsidiary)

6. Bajaj Eco-Chem Products Private Limited

As directed by the Ministry of Corporate Affairs, certain key information has been disclosed in an Annexure to the Consolidated Accounts forming part of this Annual Report.

Upon written request, the annual accounts of the subsidiary companies and the related detailed information will be made available to the investors seeking such information, at any point of time, and the same will also be kept for inspection at the registered office of the Company.

Bajaj Hindusthan Sugar and Industries Limited

During the year 2008-09, Bajaj Hindusthan Sugar and Industries Limited (BHSIL) achieved a turnover sales and other income of Rs.4,157.79 million as compared to Rs.3,021.69 million in the previous year. The Company recorded Net loss of Rs. 89.29 million against a loss of Rs.757.48 million in the previous year. BHSIL crushed 1.308 Million MT (MMT) of sugar cane during the season 2008-09 as against 1.342 MMT during the sugar season 2007-08. Production of sugar for the season 2008-09 was 0.115 MMT as against 0.140 MMT during the season 2007-08. The recovery during the season 2008-09 was 8.79% as compared to 9.75% during the season 2007-08. BHSILs co- generation plants have generated 37,242 MW power during the year 2008-09 as against 44,564 MW power generated during the previous year.

BHSIL is still awaiting from a lender the approval for a Scheme of Arrangement, inter alia, comprising merger of Phenil Sugars Private Limited, which is presently holding more than 99% shares in two companies having one sugar plant each of the capacity of 6,000 TCD located in the State of Uttar Pradesh and conversion into Zero Coupon Secured Optionally Convertible Securities of (i) loans including interest thereon; and (ii) loans including interest thereon taken over by it from its future subsidiaries - due to the Company. The Company will obtain approvals of the shareholders and creditors of the Company, the High Court of judicature at Bombay and other concerned authorities. The said approval is expected shortly. On receipt of the same, Company will file application with Bombay High Court to obtain necessary directions from the said Court.

Bajaj Eco-Tec Products Limited

Bajaj Eco-Tec Products Limited (BEPL) is one of the Wholly Owned Subsidiary (WOS) of Bajaj Hindusthan Limited.

BEPL is one of the only two companies in the world, to manufacture Medium Density Fibre (MDF) boards from sugar cane bagasse.

The two Medium Density Fibre (MDF) Board plants, (MDF plants) are situated at Palia Kalan, District Lakhimpur Kheri, U.P. and at Kundarkhi, District Gonda, U.P., each having a capacity to manufacture 80,000 m3 boards per annum. The Particle Board Plant is situated at Kinauni, District Meerut, U.P., and has a capacity to manufacture 50,000 m3 boards per annum. The combined capacity of all three plants, at 210,000 m3 boards per annum, is the largest in the country, and has been set up at a total cost of around Rs. 3,000 million. BEPL has installed the latest, state-of-the-art Plant & Machinery, at all three locations, which have been imported brand new, from Europe and China.

During the financial year 2008-09, BEPL has successfully commenced commercial operations of manufacturing Particle Boards (PB) and Medium Density Fibre Boards (MDF), from sugar cane bagasse, and launched its ÃZero Wood, Eco-friendly Particle Boards and Medium Density Fibre BoardsÃ in the Indian Market, under the brand ÃBajaj BoardsÃ.

BEPL had successfully resolved the initial quality issues of MDF boards, and the plants were also gradually stabilized. In view of worldwide recession and more particularly in real estate and infrastructure sectors, which is the main market for PB and MDF, the demand and consequently prices of PB and MDF boards dropped rapidly. Few countries, in order to keep their plants running, also resorted to dumping their products in India. As a result of this, the prices of PB and MDF boards in India went down by as much as 30%. The threat became so serious, that in February 2009, Government of India imposed Anti Dumping Duty on import of MDF from Sri Lanka, Thailand, Malaysia, China and New Zealand.

However, due to aforesaid, the turnover and margins of the Company in its first year of commercial operations were adversely affected. During the year 2008-09, BEPL recorded a turnover (Gross Sales and Other Income) of Rs.608.68 million and a net loss of Rs. 739.51 million.

BEPL has now launched complete range of PB and MDF boards in the market - Plain boards, Pre-laminated boards, Interior Grade, Exterior Grade, and in thicknesses ranging from 6 mm to 25 mm.

BEPL has also received ISI Certifications in respect of its PB and MDF boards manufactured at all three plants. Further, being manufactured from sugar cane bagasse, an agricultural residue, the Bureau of Indian Standards have also accorded ÃECO-MARKÃ to BEPLs PB and MDF boards. BEPL has also earned Membership of Indian Green Building Council (IGBC), an organization committed to promote and develop green building concepts, in India. BEPLs PB and MDF boards also enjoy Zero Excise Duty and Concessional VAT in number of states.

With ISI Mark, ECO-MARK and prestigious membership of IGBC, ÃBajaj BoardsÃ are now being specified in all major projects of Governments, Banks, Hospitals, Educational Institutions, Hotels, Public Undertakings, etc., all across the country.

ÃBajaj BoardsÃ provides a cost-effective and sustainable alternative/substitute for wood, plywood and other similar panel products, required for interiors and furniture manufacturing and in the process will significantly reduce deforestation, one of the main culprits of ÃGLOBAL WARMINGÃ. At full production capacity of 210,000 m3, ÃBajaj BoardsÃ has a potential to save 400,000 mature trees from being cut every year!

During the year, BHL had invested a further sum of Rs.600 million by way of Convertible Preference Shares subscription. Accordingly, till date, BHL has invested Rs.1,849.10 million by way of 11,500,000 equity shares of face value Rs.10/- each at a price of Rs.100/- per share (comprising Rs.90/- per share as premium); 10,000,000 - 7% Redeemable Cumulative Non-Convertible Preference Shares of face value of Rs.10/- each and 60,000,000 - 7% Redeemable Cumulative Convertible Optionally Preference Shares of face value of Rs.10/- each towards part funding of the overall project cost and working capital requirements of its subsidiary.

Bajaj Aviation Private Limited

Bajaja Aviation Private Limited (BAPL) commenced the operations of providing charter services of its Bell-407 helicopter acquired during the year. In its first year of commercial operations, BAPL generated income of Rs.10.64 million and recorded Profit after taxation of

Rs.2.02 million for the year ended September 30, 2009.

Bajaj Eco-Chem Products Private Limited

The proposed plan of undertaking and carrying the business of manufacture and sale of speciality chemicals by BECPL was deferred and as such no business has been commenced under Bajaj Eco-Chem Products Private Limited till date.

Bajaj Internacional ParticipaÃÂ§ÃÂµes Limitada (Subsidiary in Brazil)

The Company has not commenced any business operations through this Wholly Owned Subsidiary (WOS) in Brazil till date. Brazil is the largest sugar producing nation in the world, which may provide suitable business opportunity in this sector for being taken up through this WOS.

Bajaj Hindusthan (Singapore) Private Limited

Bajaj Hindusthan (Singapore) Pvt. Ltd. was incorporated in May 2007 for the purpose of leveraging foreign business opportunities. No business operation has yet commenced. The Company continues to explore suitable business opportunities.

Cane and Sugar Policy

The Central Government has announced several policy measures during the year under review as well as for the future. The salient features of the sugar policy effective from October 1, 2009 are:- 1. Levy sugar component has been increased from 10% in Sugar Season 2008-09 to 20% for Sugar Season 2009-10 to meet the requirements under the Public Distribution System at subsidized rates;

2. Levy sugar price will now onwards re computed based on the Fair and Remunerative Price (FRP) in place of the Statutory Minimum Price (SMP). The FRP would provide reasonable margin to the growers on account of risk and profits;

3. FRP is applicable from October 1, 2009;

4. The Central Government has allowed duty-free import of raw sugar till January 1, 2011 and white sugar till March 31, 2010 to enable the availability of sugar in the domestic market;

5. For the Sugar Season 2009-10, the Central Government has announced FRP at the rate of Rs. 129.84 per quintal linked to a base recovery rate of 9.50% subject to a premium of Rs. 1.37 per quintal for every 0.10% increase in recovery above that level; and

6. The Government of Uttar Pradesh has announced the sugarcane price at Rs.165 per quintal for normal variety as against Rs.140 per quintal during Sugar Season 2008-09. However, due to shortage of sugarcane, sugar mills in Uttar Pradesh have agreed to pay between Rs.200 and Rs.210 per quintal.

Ethanol Policy

The Government of India has recently reiterated its stand to implement mandatory 5% ethanol blending with petrol. This is expected to result in better utilization of the Alcohol business segment of the Company.

Power Policy

The Government of Uttar Pradesh has recently announced ÃEnergy Policy 2009Ã that provides for special relaxation for co-generation plants facing shortage of fuel. Emphasis was also given for enabling utilization of idle capacity to bridge the demand-supply gap in an energy deficient state such as Uttar Pradesh.

The relaxations as announced by the Government of Uttar Pradesh may be summarized as :- 1. Renewable energy (bagasse) based co-generation plants will be permitted use of fossil fuel such as coal or gas to generate power in the off-season;

2. All existing or future co-generation plants (bagasse) will be permitted to sell 10% of their total generation under open access to third party for the next 10 years; and

3. As an incentive for off-season generation, the Government of Uttar Pradesh will permit 50% of the power to be sold anywhere under Open Access System.

New Tariff

The Uttar Pradesh Electricity Commission, Lucknow (UPERC) vide its order dated September 9, 2009 reviewed Captive and Non Conventional Energy (CNCE) Regulations 2005 and has determined the new effective tariff for existing bagasse based co- generation plants from the financial years 2009-2010 to 2013-2014. By virtue of this order of UPERC, the effective bagasse based co-generation plants of the Company will stand increased progressively by approximately 30%. This would result in higher revenue and profits for the Company.

Expansion of Power Capacity

Modification of Boilers for use of alternate fuel

The Company is in the process of modifying its ÃBagasse-fired BoilersÃ at three of our sugar mills into multi-fuel boilers which will allow us to use coal as fuel at these locations, in addition to bagasse. The ability to use coal to fuel our co-generation facilities will allow us to divert our bagasse to more efficient uses and also allow the Company to generate power and supply it to the Uttar Pradesh State grid outside of the sugarcane crushing season, when bagasse is not readily available.

As a strategy to diversify our operations beyond the seasonal variations, the Company has proposed expanding its power generation capacity from existing 340 MW to 740 MW approximately, in addition to the conversion of boilers into multi-fuel boilers. This will enable the Company to generate and supply power to the Uttar Pradesh State Grid and other private parties during the off-season period.

New Coal-fired Power Plants

The Company has recently commenced work for expansion of power generation capacity by around 400 MW by setting up five new coal-fired thermal power plants, each with a capacity of approximately 80 MW. The total project cost in this regard has been estimated at Rs.1,600 crores - Rs. 1,700 crores approximately. These plants will be located within the premises of five of the sugar mills of the group. With commencement of commercial operations of these five new power plants, the total power generation capacity of the Company will increase to approximately 828 MW.

Consolidated Financial Statements

In compliance with Accounting Standards 21, 23 and 27 issued by The Institute of Chartered Accountants of India and pursuant to the Listing Agreement with the

Stock Exchanges, the Consolidated Financial Statements form part of this Annual Report.

Auditors and AuditorsÃ Report

M/s. Dalal & Shah, Chartered Accountants, existing Statutory Auditors will retire at the conclusion of the ensuing (78th) Annual General Meeting and have given a notice in writing expressing their intention not to seek re-appointment as Statutory Auditors of the Company at the ensuing Annual General Meeting.

Special Notice has been received by the Company from a member proposing the appointment of M/s. Chaturvedi & Shah as Auditors of the Company from conclusion of 78th Annual General Meeting till conclusion of 79th Annual General Meeting.

The Company has received certificate from M/s. Chaturvedi & Shah to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Board of Directors recommends to the shareholders the appointment of M/s. Chaturvedi & Shah as Auditors of the Company.

The comments on the statement of account referred to in the report of the auditors are self explanatory and therefore do not call for any further explanations/ comments.

Cost Auditors

The Central Government has directed an audit of the cost accounts maintained by the company in respect of sugar and industrial alcohol businesses. For conducting the cost audit for these businesses for the financial year ended September 30, 2009, the Central Government has approved the appointment of M/s. B.J.D. Nanabhoy & Co., Cost Accountants, Mumbai.

Necessary government approval for appointment of cost auditors for the financial year ending on September 30, 2010 is being obtained.

Directors

Mr. I. D. Mittal, Chief Executive Director resigned from the Board of the Company on February 6, 2009. The Board recorded its appreciation for the contribution made by Mr. I. D. Mittal during his tenure of directorship in the Company.

Dr. Sanjeev Kumar joined the Company in June 2004 to oversee Corporate and Legal Affairs and was subsequently elevated to Group President- Corporate and Legal Affairs. He was inducted on the Board on whole time basis and designated as Director (Corporate and Legal Affairs) for a period of five years with effect from March 12, 2009. Approval of the shareholders in this regard was obtained at the Extraordinary General Meeting held on May 4, 2009.

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr. Sanjeev Kumar would hold office as Additional Director (appointed at the Board Meeting held on March 24, 2009) only up-to the date of the 78th Annual General Meeting of the Company. The Company has received notice from a member pursuant to section 257 of the Companies Act, 1956, proposing the appointment of Dr. Sanjeev Kumar as Director of the Company. The Board of Directors recommends the appointment of Dr. Sanjeev Kumar as Director of the Company.

Mr. R. V. Ruia and Mr. Alok Krishna Agarwal, Directors of the Company, will retire by rotation and being eligible, offer themselves for re-appointment.

All the appointments of the Directors of the Company are in compliance with the provisions of Section 274 (1)(g) of the Companies Act, 1956.

Directors responsibility statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, as amended, with respect to the directors responsibility statement, it is hereby confirmed:

(i) that in preparation of accounts for the financial year ended September 30, 2009, the applicable accounting standards have been followed along with proper explanation relating to the material departures;

(ii) that the directors of the Company have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at September 30, 2009 and of the profit of the Company for the year ended September 30, 2009;

(iii) that the directors of the Company have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the directors of the Company have prepared the accounts of the Company for the financial year ended September 30, 2009 on a going concern basis.

Particulars of employees

As required under the provision of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, particulars of employees are set out in the Annexure- II and forms part of this report.

However, having regard to the provisions of Section 219(1((b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

Group

Pursuant to an intimation from the Promoters, the names of the Promoters and entities comprising ÃgroupÃ as defined under the Monopolies and Restrictive Trade Practices (ÃMRTPÃ) Act, 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Fixed deposits

Fixed deposits accepted from shareholders and public stood at Rs. 0.76 million as at September 30, 2009 as against Rs. 0.79 million in the previous year. As on September 30, 2009, there were unclaimed deposits from 5 deposit holders amounting to Rs. 0.76 million.

Transfer of amounts to Investor Education and Protection Fund

The amounts of dividend, interest on debenture and matured debentures, interest on fixed deposits and matured fixed deposits, etc. which has remained unpaid or unclaimed for 7 years have been transferred to the Investor Education and Protection Fund within time stipulated by law on respective due dates in accordance with the provisions of Section 205C of the Companies Act, 1956.

Environmental protection and pollution control

Change is only permanent and we adhere to change to achieve the heights of excellence in Environment, Health & Safety (EHS). EHS have become an integral part of core policies of the Company for better implementation at all the level. Initiative taken to develop safe environment for employees and community in the early years resulted into multitudes of activities last year.

EHS Department has implemented an Environment, Health & Safety Management System (EMS) and Occupational Health and Safety Systems all across the units to ensure that all activities which might have an impact on the Safety and Health of the people associated with operation or products and the environment are carried out in a safe manner. Our Gola, Gangnauli and Khambarkhera sugar & distillery units are certified for ISO 9001, 14001 & OHSAS 18001 for Quality, Environment & Health whereas Palia and Kinauni sugar & distillery units are ISO 14001 & OHSAS 18001 certified.

Keeping in mind the target of zero injuries, we take individual responsibility for the safety and health of ourselves, co-workers and our environment. We are having an active program in place to reduce the operational impact on the environment. We have complied with Government environmental regulations, identified and addressed key environmental risks, improved environmental awareness of employees and contractors, reduced our use of resources apart from environmental performance measures such as energy usage, air emissions, water consumption and waste generation.

To ensure a zero discharge effluent industry, we have installed Multi Effect Evaporators plant at Gola and Palia, whereas Biogas Plants at Gangnauli and Khambarkhera are under installation after the Flubex system. Gas produced in the bio-gas plant will be used as fuel in the boiler. Installation of burner for utilisation of biogas at Palia, Gola, Khambarkhera and Gangnauli distilleries units is also under process.

The treated effluent of bio-methanation is being used significantly for bio-composting process. Bio- composting is done in well designed compost yards by mixing press mud and treated effluents with a mechanized machine as per guidelines of the Central Pollution Control Board (CPCB) under Corporate Responsibility for Environmental Protection (CREP). We have signed MoUs with major fertilizer companies to supply bio-compost which is being utilized by the farmers for improving soil health, fertility and productivity. Also in order to cater to the demand of the urban areas, we have planned to launch bio- compost in small packing.

Multiple measures have been taken to minimise the emission of air pollutants. Processes having potential for particulate emissions are provided with Electrostatic precipitators (ESP) and Wet scrubbers. As a result of these initiatives, there has been a steady reduction in emissions. To minimise the air pollution we have installed Wet scrubber at Khambarkhera and Gangnauli distillery units during the year.

Adequate attention is paid to fire prevention and protection and safety at different stages such as planning and designing, erection, commissioning, operation and shut-downs. We maintain low inventories of hazardous materials.

To prevent the fire accidents, we have developed work permit, standard operation procedures followed by training, house keeping, safety audits, regular drill and demonstration, apart from well designed fire protection systems, which are put in place. Additionally, teams of trained personnel operate fire control appliances across all manufacturing locations with personal protective equipment. Even the tractors or any other vehicles being utilized in hazardous areas is provided with a spark arrestor system.

Fire hydrants and fire-fighting networks protect all flammable chemical storages at all the plants. Certain storage tanks, like the molasses storage tank, are covered by water recirculation systems as an additional safety measure. The handling of hazardous chemicals is mainly through a piping and closed system which is handled by trained operators. The on-site emergency plans are regularly updated. Last year we have installed a well designed fire protection system at Budhana sugar unit.

Training of personnel is aimed to improve the performance of individuals and groups / teams. Special attention is given on Education, Development and Job safety training programme.

We have developed an elaborated and strict system of inspection of the tankers transporting the Companys products to various parts of the country. Regular training programmes are conducted for the drivers and cleaners of the transport vehicles wherein training on the nature of the chemicals that they are transporting and safety measures to be adopted during transportation of such chemicals, including the Material Safety Data Sheet (MSDS), is imparted. Transporters are provided Transport Emergency (TREM) cards with pictorial depiction for alcohol leaving the factory premises. These TREM cards - in English and Hindi - incorporate instructions to handle emergency situations during transit. Monitoring, coupled with regular intensive training has reduced the number of transportation-related incidents. We have also developed a TREM card for immediate response during transportation.

For improvement in the area of Safety, we follow monthly internal safety audit & implementation of recommendations, six-monthly external EHS Audit by DNV & implementation of recommendations, conducting internal & external training programmes on EHS, six-monthly Mock Drill and implementation of its outcome.

To improve the efficiency, we also conduct Root Cause Failure Analysis, monthly audit on House Keeping, Visible Management, Drill and Demonstration ÃOnsite Emergency PlanÃ and application of Permit System for Hot Work, Height Job, Confined Space Entry, Digging Work & Cold work.

Our Gola distillery unit has been declared Winner of 8th Greentech Safety Gold Award for the year 2009 for outstanding achievement in Safety Management.

We have also given training to local farmers for the application of insecticides and pesticides in the field.

We have identified key areas of focus from the health perspective and are encouraging its facilities to develop initiatives to address them. The Company is procuring portable and fixed-type work zone monitoring systems for all the distilleries to detect and measure in the presence of organic vapours and other gases in the work zone atmosphere and take actions against any fugitive emissions.

Periodically, specialists from nearby cities are invited and health camps organised for both employees and their families. The Companys medical team is headed by an experienced and qualified Medical Officer, who is supported by medical staff.

Under the Kyoto Protocol, Company has identified Clean Development Mechanism (CDM), Chicago Climate Exchange (CCX) & Voluntary Carbon Standard (VCS) projects for bagasse based co-generation plants in sugar units and biogas based power generation in distillery units. Validation and verification have been completed under VCS for Thanabhawan sugar unit and certificate for carbon emission is awaited.

We have received approval for Greenhouse Gas Emission Reduction under CCX for Kinauni, Barkhera & Khambarkhera. Validation and verification have completed for Kinauni distillery for Green House Gas Emission Reduction under VCS. Gola, Palia, Gangnauli & Khambarkhera distillery units are at Project Draft Document stage for VCS.

Fly ash has a high content of Potash. For the proper disposal and effective utilization of the nutrient value of fly ash, we are planning to explore avenues for its marketing. Many companies have shown an interest in this.

We are committed to become a leader in the efforts of more responsible environmental stewards. We encourage to implement safety initiatives and to inculcate the best practices among the employees to act towards safety, self and environment apart from community.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The relevant data regarding the above is given in the Annexure-I hereto and forms part of this report.

Corporate Governance

The Company has vigorously striven to follow the best corporate governance practices aimed at building trust among the key stakeholders, shareholders, employees, customers, suppliers (including farmers) and other stakeholders on four key elements of corporate governance - transparency, fairness, disclosure and accountability.

Management Discussion and Analysis

Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

Acknowledgements

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 Companys employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board of Directors

SHISHIR BAJAJ

Chairman & Managing Director

Mumbai, December 15, 2009

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