Notes to Accounts of Bajaj Hindusthan Sugar Ltd.

Mar 31, 2018

1 Corporate information:

“Bajaj Hindusthan Sugar Limited (‘the Company’) is a public limited company incorporated in India under the provisions of the Companies Act and its shares are listed on BSE Ltd. and National Stock Exchange of India Ltd. The registered office of the Company is situated at Golagokarannath, Lakhimpur - Kheri, District Kheri, Uttar Pradesh - 262 802, and its principal place of business is at TC-13, Vibhuti Khand, Gomti Nagar, Lucknow - 226 010. The Company is engaged in the manufacture of sugar, alcohol and generation of power.

The Standalone financial statements of the Company are for the year ended March 31, 2018 and are prepared in Indian Rupees being the functional currency. The values in Indian Rupees are rounded to crore, except otherwise indicated.

Nature and description of reserve:

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

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

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

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

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

2.1 34,83,24,626 (P.Y. nil) Unlisted, Unrated, Redeemable, Optionally Convertible Debentures (Series 1/2017-18) of Rs.100/- each issued on Preferential basis to the lenders in accordance with S4A Scheme on December 18, 2017. Debentures are to be redeemed in 13 equal annual instalments starting from March 31, 2025. The coupon rate for year 1 & 2 is 0.01% p.a., for year 3 & 4 is 1.00% p.a. and thereafter 2.50% p.a, payable annually on the last date of every financial year. The redemption premium is payable on redemption of debentures to be decided by lenders at going weighted average interest cost so that there is no NPV loss to the lenders.

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

Due to losses incurred by the Company during the year, Debenture Redemption Reserve as required by Section 71 of the Companies Act, 2013 has not been created.

2.2 Details of securities

(i) Term Loans and debentures from Banks are secured on first pari-passu charge basis, by way of mortgage over all immovable fixed assets and hypothecation over all movable fixed assets (both present and future) of the Company, on first pari-passu charge by way of hypothecation over all current assets (both present and future) of the Company. The said loans are further secured by personal guarantee of Managing Director (Promoter) and corporate guarantee by a promoter group company, pledge of entire shares held by the Promoters of the Company and 33,00,001 shares of Bajaj Energy Ltd. held by promoters group company.

(ii) The Sugar Development Fund loan (SDF) from Government of India is secured on exclusive second charge basis, by hypothecation of the whole of movable fixed assets and properties and by mortgage on the whole of immovable fixed assets and properties of the concerned sugar unit of the Company.

2.3 Loan from promoters

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

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

2.4 The principal of Rs.133.09 crore on term loan are due on March 31, 2018.

Working capital loan from Banks are secured on first pari-passu charge basis, by way of mortgage over all immovable fixed assets and hypothecation over all movable fixed assets (both present and future) of the Company, on first pari-passu charge by way of hypothecation over all current assets (both present and future) of the Company. The said loans are further secured by personal guarantee of Managing Director (Promoter) and corporate guarantee by a promoter group company, pledge of entire shares held by the Promoters of the Company.

The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on March 31, 2018 of Rs. Nil ( Rs.166.47 crore) as per the estimated pattern of despatches. During the year, Rs.95.99 crore was utilised for clearance of goods till June 30, 2017. Since the GST (Goods and Services Tax) has been implemented w.e.f. July 01, 2017, no provision is recognised for the year, as GST is payable on supply of goods. Excess provision of Rs.70.48 crore (P.Y. Rs. Nil) is reversed during the year.

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

The Gratuity Liability is computed on actuarial valuation basis done at year end using the Project Unit Credit Method is provided for in the books of account and is based on a detailed working done by a certified Actuary. Past service cost is recognised immediately to the extent that the benefits are already vested.

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

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

The expected contributions for Defined Benefit Plan for the next financial year will be in line with financial year 2017-18.

These gratuity plan typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Investment risk

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

Interest risk

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

Longevity risk

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

Salary risk

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

c. Provident fund

The Company has an obligation to fund any shortfall on the yield of the trust’s investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The actuary has provided a valuation based on the below provided assumptions and there is no shortfall as at March 31, 2018.

d. Share-based payment

Erstwhile Bajaj Hindusthan Sugar & Industries Limited, which was merged with the Company w.e.f. 01.04.2010, had formed Employees Stock Option Plan (ESOP) in 2007. All options granted have either been expired or exercised.

3 Foreign currency exposure that are not hedged by derivative instruments as on March 31, 2018 amounting to SGD 0.24 crore (P.Y. SGD 0.24 crore) in respect of loan given to subsidiary.

4 As per Ind AS 108 - “Operating segment”, segment information has been provided under the notes to consolidated financial statements (refer note 38 to the consolidated financial statements).

5 The disclosures in respect of Related Parties as required under Ind AS 24 ‘Related Party Disclosures’ is stated herein below:

Notes:

1 Related party relationship is as identified by the Company based on the available information and relied upon by the auditors.

2 No amount has been written off or written back during the year in respect of debts due from or to related parties.

3 Rent received Rs.7.56 crore (P.Y. 7.56 crore) from Bajaj Aviation Pvt. Ltd, Rs.3.19 crore (P.Y. Rs.3.17 crore) from Bajaj Energy Ltd and Lalitpur Power Generation Company Ltd Rs.0.21 crore (P.Y. Rs.0.21 crore).

4 Interest received includes ‘104.47 crore (P.Y. Rs.104.47 crore) from Bajaj Power Generation Private Limited and Rs.2.93 crore (P.Y. ‘2.93 crore) from Bajaj Aviation Pvt Ltd. on loan given to them.

5 Remuneration includes ‘1.84 crore (P.Y. Rs.1.76 crore) to Mr. Kushagra Bajaj, and Rs.0.99 crore (P.Y. Rs.0.92 crore) to Mr. A.K. Gupta.

6 Rent paid includes Rs.0.93 crore (P.Y. Rs.0.87 crore) to Bajaj Capital Ventures Pvt. Ltd , Rs.2.22 crore (P.Y. Rs.2.08 crore) to Shishir Bajaj Family Trust, Rs.0.88 crore (P.Y. Rs.0.86 crore) to Bajaj Resources Ltd. and Rs.2.12 crore (P.Y. Rs.0.56 crore) to Abhitech Developers Pvt. Ltd.

7 Advance lease rent received Rs.0.21 crore (P.Y. Nil) from Lalipur Power Generation Company Ltd.

8 Advance rent paid Rs.4.25 crore (P.Y. Nil) to Abhitech Developers Pvt. Ltd.

9 Loan taken Rs.6.50 crore (P.Y. Nil) from Shishir Bajaj Family Trust, Rs.4.11 crore (P.Y. Nil) from Lambodar Stocks Pvt. Ltd. and ‘1.39 crore (P.Y. Nil).

10 Loans given including interest includes Rs.104.42 crore (P.Y. Rs.104.41 crore) to Bajaj Power Generation Private Ltd., Rs.2.93 crore (P.Y. ‘2.93 crore) to Bajaj Aviation Pvt Ltd and ‘0.78 crore (P.Y. Rs.0.65 crore) due to change in currency rate to Bajaj Hindusthan (Singapore) Pvt. Ltd.

11 Security deposit repaid Rs.5.82 crore (P.Y. Rs.0.42 crore) from Abhitech Developers Pvt. Ltd.

12 Restructured term loan from banks aggregating to Rs.6,790.77 crore are secured by personal guarantee of Mr. Kushagra Bajaj (Managing Director) and corporate guarantee by M/s Bajaj International Realty Private Ltd. (a promoter group company) and pledge of entire shares held by the promoters of the Company.

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

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

b) The MRA as well as guidelines of Reserve Bank of India issued on debt restructuring under JLF route give a right to the JLF lenders to get recompense of their waivers and sacrifices made as per corrective action plan. The recompense payable by the Company is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense is treated as a contingent liability. The aggregate present value of recompense till March 31, 2018 payable to the JLF lenders as per MRA is approximately ‘144.79 crore for the Company.

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

d) For restructuring of certain outstanding debts of the Company, the Joint lenders’ forum (JLF) of the Company adopted the scheme for sustainable structuring of stressed assets (S4A Scheme) with reference date as June 23, 2017, which was approved by the overseeing committee (OC) on November 30, 2017. As per the S4A Scheme, the total fund-based debt of Rs.8,284.59 crore (including funded interest of Rs.354.51 crore), were bifurcated in two parts - 57.81% as Part A (Sustainable Debt) amounting to Rs.4,789.34 crore to be serviced as per existing terms and conditions of these debts and remainder 42.19% as Part B (Unsustainable Debt) amounting to Rs.3,495.25 crore. While a sum of Rs.12.00 crore has been adjusted against the consideration payable to Promoters towards transfer of 11,99,87,344 equity shares, at a price of Rs.1/- per equity share, to JLF lenders and the balance Rs.3,483.25 crore has been converted into optionally convertible debentures allotted to the JLF lenders.

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

e) ”Finance Cost” includes a sum of Rs.354.51 crore, which instead of being paid in cash have been converted into OCDs as a part of “Unsustainable Debt” in accordance with the S4A Scheme, resulting into substantial savings of cash outflow during the year. The OCDs are redeemable by paying the Principal Amount together with YTM accrued till the date of respective redemption date in 13 equal annual instalments, commencing at the end of financial year 2024-25.

7 Details of Loans given, investment made and guarantee given covered under Section 186(4) of the Companies Act, 2013:

- Investment made are given under note 4

- Loan given to subsidiaries are given under note 11

8 Financial Risk Management

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

A Credit risk

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

Following table summarises the change in loss allowances measured using life time expected credit loss model. No significant changes in the estimation techniques or assumption were made during the period.

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

B Liquidity risk

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

C Market risk

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

i) Interest rate risk

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

ii) Inventory price risk

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

iii) Foreign exchange risk

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

9 Fair value of financial assets and financial liabilities

Financial instruments measured at fair value can be divided into three levels for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

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

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

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

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

c) Non-listed shares and other securities fall within level 3 of the fair value hierarchy. Valuation is based on the net asset method.

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

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

During the year ended March 31, 2018, there was no transfers between level 2 and level 3 fair value hierarchy. During the year ended March 31, 2017, there was no transfers between level 2 and level 3 fair value hierarchy.

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

10 During the current year and in past four years, Company has incurred losses resulting into reduction of net worth to that extent. The losses were mainly attributable to high raw material i.e. sugarcane price (as fixed by the Government) and relatively lower price of finished goods i.e. sugar and molasses (determined by market forces based on the demand-supply equation), both of which are external factors. As at year end, Company has overdue instalments of certain debts and dues payable to farmers for sugarcane purchases. The Company continues to operate at optimal levels and expects improvement in the operational efficiencies in the form of improvement in yield, sugar recovery, reduction of overheads, finance and other costs, sale of certain non-core assets etc. The debt restructuring concluded during the year as per RBI’s S4A Scheme, will result into improved liquidity during next 7 years. Also pursuant to a favourable Order of Hon’ble Supreme Court of India, the Company expects to receive benefits under the Sugar Promotion Policy 2004. In view of the above, the management expects to generate positive cash flow from operations and accordingly, the financial statements are continued to be presented on going concern basis, which contemplates realisation of assets and settlement of liabilities in the normal course of business.

11 Capital Management

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

12 The Proposal for sale of Co-Generation power business of the Company as was initiated in earlier years primarily for the purpose of utilising the sale proceeds towards repayment/ prepayment of Company’s debt which has consequently been shelved as the Company has restructured loan under the scheme for sustainable structuring of stressed assets (S4A Scheme).

13 The financial statements were approved for issue by the Board of Directors, at its meeting held on May 26, 2018.

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

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Mar 31, 2017

1. Foreign currency exposure that are not hedged by derivative instruments as on March 31, 2017 amounting to USD 0.24 crore (P.Y. USD 0.24 crore) in respect of loan given to subsidiary.

2. The disclosures in respect of Related Parties as required under Ind AS 24 ''Related Party Disclosures'' is stated herein below:

a) Details of related parties:

Name of related parties Description of relationship

A. Subsidiary companies

1. Bajaj Aviation Private Ltd. Wholly-owned subsidiary

2. Bajaj Power Generation Private Ltd. Wholly-owned subsidiary

3. Bajaj Hindusthan (Singapore) Private Ltd., Singapore Wholly-owned subsidiary

4. PT. Batu Bumi Persada, Indonesia Step down subsidiary

5. PT. Jangkar Prima, Indonesia Step down subsidiary

B. Directors and their relatives

1. Mr. Kushagra Bajaj Chairman & Managing Director (Also key management personnel)

2. Mr. Ashok Kumar Gupta Director (Group Operations) (Also key management personnel)

C. Enterprises over which key management personnel and their relatives are able to exercise significant influence

1. Abhitech Developers Pvt. Ltd.

2. Bajaj Capital Ventures Private Ltd.

3. Bajaj Infrastructure Development Company Ltd.

4. Bajaj Energy Ltd.

5. Bajaj Resources Ltd.

6. Bajaj Power Ventures Private Ltd.

7. Bajaj International Realty Private Ltd.

8. Shishir Bajaj Family Trust

9. SKB Roop Commercial, LLP

10. Lalitpur Power Generation Company Ltd.

Notes:

1 Related party relationship is as identified by the Company based on the available information and relied upon by the auditors.

2 No amount has been written off or written back during the year in respect of debts due from or to related parties.

3 Rent received Rs, 7.56 crore (P.Y. Rs, 7.56 crore) from Bajaj Aviation Pvt. Ltd., Rs, 3.17 crore (P.Y. Rs, 3.00 crore) from Bajaj Energy Ltd and Lalitpur Power Generation Company Ltd Rs, 0.21 crore (P.Y. Rs, 0.05 crore).

4 Interest received includes Rs, 104.47 crore (P.Y. Rs, 104.47 crore) from Bajaj Power Generation Private Limited and Rs, 2.93 crore (P.Y. Rs, 2.93 crore) from Bajaj Aviation Pvt Ltd. on loan given to them.

5 Remuneration includes Rs, 1.76 crore (P.Y. Rs, 1.77 crore) to Mr. Kushagra Bajaj, and Rs, 0.92 crore (P.Y. Rs, 0.86 crore) to Mr. A.K. Gupta.

6 Rent paid includes Rs, 0.87 crore (P.Y. Rs, 0.86 crore) to Bajaj Capital Ventures Pvt. Ltd. Rs, 2.08 crore (P.Y. Rs, 2.05 crore) to Shishir Bajaj Family Trust, Rs, 0.86 crore (P.Y. Rs, 0.32 crore) to Bajaj Resources Ltd. and Rs, 0.56 crore (P.Y. Rs, 2.45 crore) to Abhitech Developers Pvt. Ltd.

7 Loans given including interest includes Rs, 104.41 crore (P.Y. Rs, 104.42 crore) to Bajaj Power Generation Private Ltd. Rs, 2.93 crore (P.Y. Rs, 2.93 crore) to Bajaj Aviation Pvt Ltd and Rs, 0.65 crore (P.Y. Rs, 0.89 crore) due to change in currency rate to Bajaj Hindusthan (Singapore) Pvt. Ltd.

8 Security deposit repaid Rs, 0.42 crore (P.Y. Nil) from Abhitech Developers Pvt. Ltd.

9 Restructured term loan from banks aggregating to Rs, 7,007.19 crore are secured by personal guarantee of Mr. Kushagra Bajaj (Managing Director) and corporate guarantee by M/s Bajaj International Realty Private Ltd. (a promoter group company) and pledge of entire shares held by the promoters of the Company.

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

3. As required by paragraph 46 inserted by vide notification dated March 31, 2009 to the Accounting Standard AS

11 "The Effect of Changes in Foreign Exchange Rate", as read with paragraph D13AA of appendix D of Indian Accounting Standard (Ind AS) 101 - First-time Adoption of Indian Accounting Standards, the Company had opted to adjust the exchange fluctuations on long-term monetary items to the carrying cost of fixed assets. The unamortized foreign exchange fluctuation capitalized to fixed assets, amount of Rs, 313.65 crore (P.Y. Rs, 330.37 crore) as at March 31, 2017.

4. a) At the request of the Company, the Joint lenders'' forum (JLF Lenders) led by State Bank of India has approved

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

b) The MRA as well as guidelines of Reserve Bank of India issued on debt restructuring under JLF route give a right to the JLF lenders to get recompense of their waivers and sacrifices made as per corrective action plan. The recompense payable by the Company is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense is treated as a contingent liability. The aggregate present value of recompense till March 31, 2017 payable to the JLF lenders as per MRA is approximately Rs, 100.66 crore for the Company.

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

d) As per the terms of MRA, interest payable on the term loan for the period from August 01, 2014 to July 31, 2016 would be converted into Funded Interest Term Loan (FITL). 70% of FITL shall be converted into equity. The shareholders approved the preferential issue of shares to lenders through postal ballot. Part of the FITL, has been converted into equity by allotment of 49,41,60,031 equity shares to lenders till March 31, 2017 at the premium of Rs, 20.77 per share.

5. Details of Loans given, investment made and guarantee given covered under Section 186(4) of the Companies Act, 2013.

- Investment made are given under note 4

- Loan given to subsidiaries are given under note 11

- Loans given to others and guarantees/securities given by the Company as at March 31, 2017 are as under:

6. During the year the Company proposed to sell its power business to Lalitpur Power Generation Co. Ltd. (LPGCL) on slump sale basis. The entire sales consideration is proposed to be used for part repayment of its certain secured loans. The Company will transfer land, building, plant and machinery and other associated equipment which are in exclusive use of power generation along with associated assets and liabilities, if any.

Approval of shareholders have been obtained as on May 01, 2017, final sanction from lenders, statutory and regulatory authorities are pending. The transaction is expected to be executed in financial year 2017-18. The assets proposed to be hived off are reported under power segment.

7.Financial Risk Management

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

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

B Liquidity risk

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

C Market risk

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

i) Interest rate risk

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

ii) Inventory price risk ^

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

iii) Foreign exchange risk

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

8. Fair value of financial assets and financial liabilities

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

value of financial instruments by valuation technique.

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

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

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

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

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

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

c) Non-listed shares and other securities fall within level 3 of the fair value hierarchy. Valuation is based on the net asset method.

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

e) Ind AS 101 allow Company to fair value Property, Plant and Equipment on transition. Company has fair valued certain land at fair value as deemed cost and the fair valuation is based on replacement cost approach falling within level 2 hierarchy.

Set out below is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments

that are recognized in the financial statements:

During the year ended March 31, 2017, there were no transfers between level 1 and level 2 fair value hierarchy. During the year ended March 31, 2016, there were transfers from level 1 to level 3 fair value hierarchy, due to cessation of associates.

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

9. In the past few years, Company incurred operational losses resulting into erosion of considerable net worth of the Company. The operational losses were mainly attributable to high sugarcane price and low sugar realization, particularly in case of sugar mills in the State of Uttar Pradesh. Sugar season 2015-16 and 2016-17 has brought respite for sugar mills after a long gap. Improvement in the sugar yield of sugar for sugarcane and sugar price has resulted in low sugarcane cost per quintal of sugar and better revenue generation. As at year end, Company has overdue installment of bank loan and interest and dues to farmers for cane purchase. Company is in the process of raising additional funds by way of sale of power business assets. Considering the future expected improvement in market scenario in coming years, Company expects generation of sustainable cash flows and accordingly the financial statement continue to be presented on a going concern basis, which contemplates realisation of assets and settlement of liabilities in the normal course of business.

a) Fair valuation as deemed cost for Property, Plant and Equipment

The Company have considered fair value for property viz. land with impact of '' 3,267.90 crore in accordance with stipulations of Ind AS 101 with the resultant impact on the transition date being accounted for in the opening reserves.

b) Fair value of Investments

The Company has valued financial assets (other than Investment in subsidiaries which are accounted at cost), at fair value on the transition date. Impact of fair value changes as on the date of transition, is recognized in opening reserves and changes thereafter are recognized in Profit and Loss Account or Other Comprehensive Income, as the case may be.

c) Provision for expected credit loss on trade receivables

The Company has made impairment for trade receivable as per simplified approach based on the life time expected credit loss model. The impact of Rs, 8.56 crore on the transition date is recognized in opening reserves and changes thereafter in Profit and Loss Account.

d) Loans

Advance of Rs, 8.69 crore to ESOP Trust has been reduced under treasury shares; corresponding effect taken in equity share capital and security premium.

e) Classification of trust shares

Company hold beneficial interest in BHL Security Trust which holds 3.11 crore shares of the Company allotted on amalgamation of its subsidiary Bajaj Sugar and Industries Limited in 2010. Company has also formed ESOP Trust under the ESOP scheme. Trust as at year end hold 0.18 crore equity shares. Under previous gap, these were classified as investment/advance. Under Ind AS, these shares are treated as treasury shares as per Ind AS 32 - Financial Instruments

- Presentation and shown as reduction from equity.

f) Other equity

Refer to note no. 49, on other equity reconciliation.

Gain / Loss on re-measurement of actuarial liabilities of defined benefit plan

Under previous gap, gain / loss on re-measurement of actuarial liabilities of defined benefit plan were accounted under Profit and Loss account. Under Ind AS, these are accounted under Other Comprehensive Income.

g) Classification of promoters'' loan and unwinding of discount

Promoters'' contribution of Rs, 200 crore (Rs, 175 crore up to March 31, 2015) was received during the period from Nov. 2014 to Sept. 2015 in terms of restructuring scheme approved by lenders. Under previous gap, said amount is treated as unsecured loan with the option to convert into equity/preference or any other similar instrument. No interest has been provided or paid on the said amount. As per Ind AS 32 contribution amount received is classified as compound instrument bifurcated into Rs, 64.22 crore as debt and Rs,135.78 crore as other equity (Rs, 56.20 crore as debt and Rs, 118.80 crore as other equity up to March 2015), by discounting the amount @12% p.a. for a tenure of 10 years. The unwinding of discount subsequent to transition date is recognized in Profit and Loss account.

h) Deferred tax liability

The impact of transition adjustments for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the Profit and Loss account for the subsequent periods.

i) Classification of Funded Interest Term Loan (FITL)

FITL loan to be converted into equity shares as per scheme of restructuring were classified as borrowing under previous gap. Under Ind AS, these are classified as equity. j) Reclassifications

The amounts of the previous gap stated above in the Balance Sheet as on March 31, 2015 and March 31, 2016 and Statement of Profit and Loss for the year ended March 31, 2016 are after considering the regrouping and reclassification of the line items as per Ind AS financial statement.

Notes:

a) Promoters'' contribution of Rs, 200 crore (Rs, 175 crore up to March 31, 2015) was received during the period from Nov. 2014 to Sept. 2015 in terms of restructuring scheme approved by lenders. Presently, said amount is treated as unsecured loan with the option to convert into equity/preference or any other similar instrument. No interest has been provided or paid on the said amount. As per Ind AS 32 contribution amount received is classified as compound instrument bifurcated into Rs, 64.22 crore as debt and Rs, 135.78 crore as other equity (Rs, 56.20 crore as debt and Rs, 118.80 crore as other equity up to March 2015), by discounting the amount @12% p.a. for a tenure of 10 years.

b) Provision for expected credit loss has been made as per the provision policy in accordance with Ind AS 109.

c) Deferred tax impact of fair valuation of plant, property and equipment and fair valuation of financial instruments, has resulted charge on reserve, on the date of transition, with consequential impact to the statement of profit and loss for the subsequent periods.

As per Ind AS 19 - Employee Benefits, actuarial gains and losses are recognized in other comprehensive income as compared to being recognized in the statement of profit and loss under previous GAAP.

d) FITL (funded interest term loan) pending for conversion to equity on 31.03.2016 reclassified to other equity from short-term borrowings as per Ind AS 32.

e) The Company has valued financial assets (other than investment in subsidiaries, associate and joint ventures which are accounted at cost), at fair value. Impact of fair value changes as on the date of transition, is recognized in opening reserves / retained earnings and changes thereafter are recognized in other comprehensive income (FVOCI).

f) The Company has considered fair value for property, viz. land in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves.

g) Company hold beneficial interest in BHL Security Trust which holds 3.11 crore shares of the Company allotted on amalgamation of its subsidiary Bajaj Sugar and Industries Limited in 2010. Company has also formed ESOP Trust under the ESOP Scheme. Company has an advance Rs, 8.69 crore to ESOP Trust which hold 0.18 crore equity shares. Under previous GAAP, these were classified as investment/advance. Under Ind AS, these shares are treated as treasury shares as per Ind AS 32 - Financial Instruments - Presentation and shown as reduction from equity.

a) As per Ind AS 19, employee benefits, actuarial gains and losses are recognized in other comprehensive income and not reclassified in profit and loss in subsequent years.

b) Interest Rs, 7.50 crore towards unwinding of discount on promoters loan, as per Ind AS 32 financial instruments.

c) Provision for expected credit loss on trade receivables of Rs, 5.35 crore.

d) Deferred tax impact of fair valuation of property, plant and equipment has been charged to the statement of profit and loss.

e) Other comprehensive income includes subsequent fair valuation of financial assets (net of tax) and actuarial gain / (loss) on valuation of defined benefits obligation.

10. The financial statements were approved for issue by the Board of Directors, at its meeting held on May 25, 2017.

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

classification/disclosures.

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Mar 31, 2016

Funded Interest Term Loan (FITL) from Banks are secured on first pari passu charge basis, by way of mortgage over all immovable fixed assets and hypothecation over all movable fixed assets (both present and future) of the Company, on first pari passu charge by way of hypothecation over all current assets (both present & future) of the Company. The said loans are further secured by personal guarantee of Managing Director (Promoter) and corporate guarantee by a promoter group company, pledge of entire shares held by the promoters of the Company,

* Lalitpur Power Generation Company Limited (LPGCL) has ceased to be an associate of the Company w.e.f. March 03, 2016 consequent upon allotment of further equity shares by LPGCL on March 03, 2016 resulting in reduction of the Company''s shareholding from 20.97% to 18.87%

# These investments are pledged against loans taken by other company

* Includes Rs, 15.32 crore (P.Y. Nil) earmarked for specific purposes ** Includes Rs, 40.70 crore (P.Y. Rs, 27.40 crore) earmarked for specific purposes

Note : Loans and advances shown above are given for business purposes.

b) Investments by the loaners in the shares of subsidiaries:

Notes:

1. Related party relationship is as identified by the Company based on the available information and relied upon by the auditors.

2. No amount has been written off or written back during the year in respect of debts due from or to related parties.

3. Sale of capital goods includes Rs, 27,863/- (P.Y. Rs, 0.01 crore) to Lalitpur Power Generation Company Limited.

4. Sale of goods includes Rs, 34,483/- (P.Y. Nil) to Lalitpur Power Generation Company Limited.

5. Rent received Rs, 7.56 crore (P.Y. Rs,7.20 crore) from Bajaj Aviation Pvt. Ltd., Rs, 3.00 crore (P.Y. Rs, 2.78 crore) from Bajaj Energy Ltd. and Lalitpur Power Generation Company Ltd. Rs, 0.05 crore (P.Y. Rs, Nil).

6. Interest received includes Rs, 104.47 crore (P.Y. Rs, 103.63 crore) from Bajaj Power Generation Private Limited and Rs, 2.93 crore (P.Y. Rs, 2.98 crore) from Bajaj Aviation Pvt. Ltd. on loan given to them.

7. Purchase of stores of Rs, 0.26 crore (P.Y. Rs,0.10 crore) from Bajaj Energy Ltd.

8. Remuneration includes Rs, 1.77 crore (P.Y. Rs, 1.32 crore) to Mr. Kushagra Bajaj, and Rs, 0.86 crore (P.Y. Rs, 0.84 crore) to Mr. A.K. Gupta.

9. Rent paid includes Rs, 0.86 crore (P.Y. Rs, 0.85 crore) to Bajaj Capital Ventures Pvt. Ltd., Rs, 2.05 crore (P.Y. Rs, 2.02 crore) to Shishir Bajaj Family Trust , Rs, 0.32 crore to Bajaj Resources Ltd. and Rs, 2.45 crore to Abhitech Developers Pvt. Ltd.

10. Loan taken of Rs,25 crore (P.Y. Rs, 64.50 crore) from M/s SKB Roop Commercial LLP (a promoter group company).

11. Loans given including interest includes Rs, 104.42 crore (P.Y. Rs, 107.79 crore) to Bajaj Power Generation Private Ltd., Rs, 2.93 crore (P.Y. Rs, 2.68 crore) to Bajaj Aviation Pvt. Ltd. and Rs, 0.89 crore (P.Y. Rs, Nil) (due to change in currency rate) to Bajaj Hindusthan (Singapore) Pvt. Ltd.

12. Restructured term loan from banks aggregating to Rs, 6,812.19 crore are secured by personal guarantee of Mr. Kushagra Bajaj (Managing Director) and corporate guarantee by M/s Bajaj International Realty Private Ltd. (a promoter group company) and pledge of entire shares held by the promoters of the Company.

13. As required by paragraph 46 inserted vide notification dated March 31, 2009 to the Accounting Standard

AS-11 "The Effect of Changes in Foreign Exchange Rates", the Company had already opted to adjust the exchange

fluctuations on long-term monetary items to the carrying cost of fixed assets. The unamortized foreign exchange

fluctuation capitalized to fixed assets, amounts to Rs, 330.37 crore (P.Y. Rs, 355.34 crore) as at March 31, 2016.

14. (a) At the request of the Company, the Joint Lenders'' Forum (JLF lenders) led by State Bank of India has approved

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

(b) The MRA as well as guidelines of Reserve Bank of India issued on debt restructuring under JLF route give a right to the JLF lenders to get recompense of their waivers and sacrifices made as per corrective action plan. The recompense payable by the company is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense is treated as a contingent liability. The aggregate present value of recompense till March 31, 2016 payable to the JLF lenders as per MRA is approximately Rs, 57.55 crore for the company.

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

(d) As per the terms of MRA, interest payable on the term loan for the period from August 01, 2014 to July 31,

2016 would be converted into Funded Interest Term Loan (FITL). 70% of FITL shall be converted in to equity. The shareholders approved the preferential issue of shares to lenders through postal ballot. Part of the FITL, has been converted into equity by allotment of 47,74,17,863 equity shares to lenders till March 31, 2016 at a premium of Rs, 20.77 per share. The balance 1,67,42,168 shares have been allotted to lenders on April 06, 2016 at the premium of Rs, 20.77 per share.

15. Details of Loans given, investment made and guarantee given covered under Section 186(4) of the Companies Act, 2013:

- Investment made are given under note 13

- Loan given to subsidiaries are given under note 19

- Loans given to others and guarantees / securities given by the Company as at March 31, 2016 are as under:

16. The Company holds entire beneficial interest in BHL Securities Trust ("the Trust") that holds equity shares of the Company carried at Rs, 693.72 crore as at March 31, 2016, which were allotted to the Trust in 2010 pursuant to the Scheme of Amalgamation of its erstwhile subsidiary Bajaj Hindusthan Sugar and Industries Ltd. with the Company as approved by the Hon''ble Bombay High Court. The market value of these shares as at March 31, 2016 is Rs, 62.20 crore, resulting into substantial diminution in its value. The Company also holds unquoted non-convertible Preference Shares at Rs, 350.04 crore and unquoted optionally convertible debentures at Rs, 370.48 crore as at March 31, 2016 in Phenil Sugars Ltd. whose net worth has been substantially eroded. Based on the likely policy measures for the sugar industry by Central and State Governments, approval of debt restructuring schemes for the company as well as Phenil Sugars Ltd, and their resultant business outlook, the management is of the opinion that these diminution in value of investments are temporary in nature and will be recovered in the next few years with improved performance and therefore no provision for the same is made during the year,

17. For the sugar season 2015-16, the cane liability has been provided @ Rs, 280/- per quintal (SAP declared by Government of Uttar Pradesh). The "financial assistance" on cane purchased receivable (subject to certain conditions) from the Government of Uttar Pradesh, pursuant to its letter No.150 CD/46-3-16-3(48)/98-99 dated January 22, 2016, will be recognized by the Company as and when the Company becomes eligible.

Central Government has announced subsidy of Rs, 4.50 per quintal of cane crushed for the sugar season 2015-16 vide its notification no. 20(43)/201 5-S.P.-I dated December 02, 2015. Company has accounted for subsidy of Rs, 20.04 crore on the basis of eligibility,

18. Exceptional items in respect of previous year includes Rs, 294.76 crore written back of depreciation due to change of method, Rs,148.02 crore impairment of fixed assets of board division and Rs, 142.91 crore written off of current assets.

19. Since last few sugar seasons, sugar industry have been reeling under continuous operational losses. This scenario was mainly attributable to high sugarcane price and low sugar realization, particularly in case of sugar mills in the State of Uttar Pradesh. During the last few years, due to surplus sugar production as compared to domestic consumption, sugar realization has remained lower than cost of production. These factors coupled with high interest burden significantly impacted the performance and cash flows of the Company. Operational losses in past three years have resulted into erosion of considerable net worth of the Company. Sugar season 2015-16 has brought slight respite for sugar mills after a long gap. Improvement in the yield of sugar from sugarcane and sugar prices has resulted in low sugarcane cost per quintal of sugar and better revenue generation. Considering certain key policy decisions and reliefs for sugar mills being contemplated by the governments and better market scenario in coming years, the Management expects to improve operating cash flows through cost synergies, revenue management, improved realization etc. These measures are expected to result in sustainable cash flows and accordingly the Financial Statements continue to be presented on a going concern basis, which contemplates realization of assets and settlement of liabilities in the normal course of business.

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

21. As per Accounting Standard (AS)-17 on "Segment Reporting", segment information has been provided under the notes to Consolidated Financial Statements.

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Mar 31, 2015

1. Corporate information

Bajaj Hindusthan Sugar Limited ('the Company') is a public limited company incorporated in India. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is engaged in the manufacture of sugar, alcohol and generation of power.

The name of the Company has been changed from Bajaj Hindusthan Limited to Bajaj Hindusthan Sugar Limited w.e.f. January 30, 2015.

2. Share capital

(i) Terms/Rights of Equity Shares:

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

(ii) Option on unissued share capital:

Under Master Restructuring Agreement (MRA) lenders would convert 70% of the Funded Interest on Term Loan (FITL) into equity shares in various tranches. (refer note 40)

2. Disclosure as required under AS-18 in respect of related party transactions:

a) Details of related parties

Name of related parties Description of relationship

(i) Bajaj Aviation Private Ltd. Wholly owned subsidiary

(ii) Bajaj Power Generation Private Wholly owned subsidiary Ltd.

(iii) Bajaj Hindusthan (Singapore) Wholly owned subsidiary Private Ltd., Singapore

(iv) FT. Batu Bumi Persada, Indonesia Step down subsidiary

(v) PT. Jangkar Prima, Indonesia Step down subsidiary

(vi) Lalitpur Power Generation Associate (subsidiary up to Company Ltd. January 28, 2014)

(vii) Bajaj Energy Private Ltd. Associate (up to March 26, 2014)

Chairman & Managing Director (Also key management personnel) (viii) Mr. Shishir Bajaj up to October 16, 2014 (ix) Mrs. Minakshi Bajaj Wife of Mr. Shishir Bajaj

(x) Mr. Kushagra Bajaj a) Vice Chairman and Joint Managing Director (Also key management personnel and also son of Mr. Shishir Bajaj). up to October 17, 2014

b) Chairman and Managing Director (Also key management personnel) from October 18, 2014

(xi) Mr. Apoorva Bajaj Son of Mr. Shishir Bajaj

(xii) Dr. Sanjeev Kumar Executive Director (Also key management personnel) up to March 29, 2015

(xiii) Mr. Manoj Maheshwari Director and Group CFO (Also key management personnel) up to March 29, 2015

(xiv) Mr. Ashok Kumar Gupta Director (Group Operations) (Also key management personnel) (xv) Bajaj Capital Ventures Private Ltd.

(xvi) Shishir Bajaj Family Trust

(xvii) Kushagra Trust no. 2

(xviii) Shishir Bajaj, HUF

(xix) Bajaj Power Ventures Private Ltd.

(xx) Bajaj Infrastructure Development Company Ltd. Enterprises over which key management personnel and their (xxi) SKB Roop Commercial, LLP relatives are able to exercise significant influence

(xxii) Bajaj Energy Private Ltd.

(xxiii) Bajaj Resources Ltd.

(xxiv) A.N. Bajaj Enterprises Private Ltd.

(xxv) KNB Enterprises, LLP

(xxvi) Global World Power Projects Private Ltd.

(xxvii) Bajaj International Realty Private Ltd.

4. Contingent liabilities and commitments

(I) Contingent liabilities

(a) In respect of disputed demands/claims against the Company not acknowledged as debts:

(i) Central excise matters 36.45 42.60 (ii) Trade tax matters 73.03 69.73 (iii) Income tax matters 18.49 - (iv) Recompense payable (refer note 40(b)) 17.98 - (v) Other claims 24.94 25.02 170.89 137.35

(b) Guarantees

The Company has furnished guarantees/securities on behalf of subsidiary / associate company 858.99 1 008 33

(c) Erstwhile Bajaj Eco-Tec Products Ltd. (merged with the Company) has procured imported as well as indigenous capital goods under Export Promotion and Capital Goods Scheme (EPCG). The Export obligation pending against such EPCG licenses 4.29 4.50

(d) Interest payable on promoters contribution (refer note 40 (c)) is not determinable

(II) Commitments

Estimated amount of contracts remaining to be 7.13 9.56 executed on capital account and not provided for (net of advances)

5. As required by paragraph 46 inserted vide notification dated March 31, 2009 to the Accounting Standard AS-11 "The Effect of Changes in Foreign Exchange Rates", the Company had already opted to adjust the exchange fluctuations on long-term monetary items to the carrying cost of fixed assets. Further as per paragraph 46A, inserted vide notification dated December 29, 201 1 to AS-11, the Company has adjusted Rs. 8.08 crore being the loss on exchange fluctuation on long-term monetary items for the year ended March 31, 2015 to carrying cost of fixed assets. The unamortised foreign exchange fluctuation capitalised to fixed assets, amounts to Rs. 355.34 crore as at March 31, 2015.

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

b) The Company and JLF Lenders have executed the MRA during the year. The MRA as well as guidelines of Reserve Bank of India issued on debt restructuring under JLF route give a right to the JLF lenders to get recompense of their waivers and sacrifices made as per corrective action plan. The recompense payable by the Company is contingent on various factors including improved performance of the company and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense is treated as a contingent liability. The aggregate present value of recompense till March 31, 2015 payable to the JLF lenders as per MRA is approximately Rs. 17.98 crore for the Company.

c) As per terms of restructuring approved by lenders, the promoters are required to bring promoter contribution amounting to Rs. 200 crore in phased manner till September 2015 in the form of equity capital / preference capital / unsecured loan / other similar instruments. An amount of Rs. 175 crore has been brought by promoters as unsecured loan till March 31, 2015. Interest on the unsecured loan of promoters, if any, payable shall be determined after the restructuring period is completed.

d) As per the terms of MRA, interest payable on the term loan for the period from August 01, 2014 to July 31, 2016 would be converted into Funded Interest Term Loan (FITL). 70% of FITL shall be converted into equity. The shareholders approved the preferential issue of shares to through postal ballot. Part of the FITL, has been converted into equity by allotment of 17,08,41,266 equity shares to lenders on March 30, 2015 at the premium of Rs. 20.77 per share. Company would issue further equity for conversion of balance FITL as and when demanded by the lenders. Since there is uncertainty on the number of shares which shall be issued pursuant to such conversion, the computation of which is dependent on the provisions of applicable guidelines of SEBI, the possible impact of the same on the diluted earnings per share of the company has not been given.

7. Details of loans given, investment made and guarantee given covered under Section 186(4) of the Companies Act, 2013.

- Investment made are given under note 14

- Loans given to subsidiaries are given under note 20

8. The Company holds entire beneficial interest in BHL Securities Trust ("the Trust") that holds equity shares of the Company carried at Rs. 693.72 crore as at March 31, 2015, which were allotted to the Trust pursuant to the Scheme of Amalgamation of its erstwhile subsidiary Bajaj Hindusthan Sugar and Industries Ltd. with the Company as approved by the Hon'ble Bombay High Court. The market value of these shares as at March 31, 2015 is Rs. 44.78 crore, resulting into substantial diminution in its value. The Company also holds unquoted non-convertible Preference Shares at Rs. 350.04 crore and unquoted optionally convertible debentures at Rs. 370.48 crore as at March 31, 2015 in Phenil Sugars Ltd. whose net worth has been substantially eroded. However, based on the likely policy measures for the sugar industry by Central and State Governments, approval of debt restructuring schemes for the company as well as Phenil Sugars Ltd, and their resultant business outlook, the management is of the opinion that diminution in value of investments are temporary in nature and will be recovered in the next few years with improved performance and therefore no provision for the same is made during the year.

9. From April 01, 2014, as per the new Companies Act, 2013, the Company has changed its method of providing depreciation with retrospective effect on tangible fixed assets other than Plant and Machinery and Aircraft, from the 'Written Down Value' method to 'Straight Line' method. Management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets and will be uniform with the method of depreciation provided for other assets. Accordingly, surplus arising from retrospective computation aggregating to Rs. 294.76 crore for the period upto March 31, 2014 has been accounted as per Accounting Standard (AS-6) and disclosed under exceptional item. Had the Company continued to use the earlier method of depreciation, the depreciation charge for the year would be higher by Rs. 108.38 crore.

10. For the sugar season 2014-15 the cane liability has been provided @ Rs. 280 per quintal (SAP declared by Government of Uttar Pradesh). The "financial assistance" on cane purchased receivable (subject to certain conditions) from the Government of Uttar Pradesh, pursuant to its letter No.2970 CD/46-3-14-3(48)/98-99 dated December 24, 2014, will be recognised by the Company as and when the Company becomes eligible.

11. Exceptional items includes Rs. 294.76 crore written back of depreciation due to change of method, Rs. 148.02 crore impairment of fixed assets of board division and Rs. 142.91 crore written off of current assets.

12. The Indian sugar industry has been adversely affected over past few years due to continuous operational losses incurred by the sugar mills. The wide gap between the high cost of sugarcane and low realisation from sugar particularly in the state of Uttar Pradesh have severely impacted the financial and economic condition of the sugar mills. The surplus production as compared to the domestic consumption year after year coupled with lower international prices has kept the domestic sugar prices subdued. These factors coupled with high interest burden significantly impacted the performance and cash flows of the Company and its subsidiaries.

The Company has incurred cash losses in the current year and also during the immediately preceding financial year. The accumulated losses have resulted into erosion of considerable net worth of the Company. However, with the approval of scheme for restructuring of existing credit facilities by the lender banks of the Company in accordance with RBI's "Framework for Revitalising Distressed Assets in the Economy", during the year and certain key policy decisions and reliefs for sugar mills being contemplated by the governments, the Management expects to improve operating cash flows through cost synergies, revenue management, improved realisations, etc. These measures are expected to result in sustainable cash flows and accordingly the Financial Statements continue to be presented on a going concern basis, which contemplates realisation of assets and settlement of liabilities in the normal course of business.

13. Figures for the current year are of 12 months from April 01, 2014 to March 31, 2015, whereas figures for the previous period are for 18 months for period from October 01, 2012 to March 31, 2014, hence such figures are not comparable. Previous period figures have been regrouped/reclassified whereever necessary to correspond with the current year's classification/disclosures.

14. As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the notes to Consolidated Financial Statements.

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Sep 30, 2012

1. Corporate information

Bajaj Hindusthan Limited (''the Company'') is a public limited company incorporated in India under the provisions of the Companies Act, 1956. Its Shares are listed on BSE Limited and The National Stock Exchange of India Limited. The Company is engaged in the manufacture of sugar, alcohol and generation of power.

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

3,70,00,000 (3,70,00,000) Equity Shares have been issued, for consideration other than cash to the members of erstwhile Bajaj Hindusthan Sugar and Industries Limited pursuant to Scheme of Amalgamation.

(ii) The reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period:

(iii) Terms / Rights of equity shares:

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

(v) Option on unissued capital:

FCCB''s of US$ 1.50 crore amounting to Rs.79.04 crore (P.Y. Rs.73.39 crore) (shown under long-term borrowings (refer note 5)) issued in the month of June 2007 and can be converted at the option of the bond holder into one equity share at Rs. 250 per equity share, at a pre determined exchange rate of US$ 1= Rs.42.42 at any time up to 26.04.2014.

(i) Term Loans from Banks (except IDBI Bank term loan of Rs.130 crore) are Secured, on first pari passu charge basis, by hypothecation of certain present and future movable fixed assets and properties including plant and machinery, tools and accessories of the Company and also secured/to be secured, on first pari passu charge basis, by mortgage (by deposit of title deeds) on certain immovable fixed assets and properties and certain term loans are further secured, on second pari passu charge basis, by hypothecation of certain present and future current assets of the Company including inventories, book debts and other receivables. Documentation for mortgage in respect of certain term loans/certain properties is under finalisation.

(ii) Term Loan of Rs.130 crore from IDBI Bank is Secured/to be secured on first pari passu charge basis, by mortgage (by deposit of title deeds) on certain immovable fixed assets and properties of the Company. Documentation for mortgage in respect of certain properties is under finalisation.

(iii) Term loans (ECB) in foreign currency from IFC of Rs.315.42 crore is secured on exclusive first charge basis, by hypothecation of Company''s movable and immovable assets (present and future) together with buildings and structures thereon and plant and machinery attached thereto at its factories at Pratappur, Rudauli, Kundarkhi and Utraula in Uttar Pradesh. Also further secured, on a second pari passu charge basis, by hypothecation of current assets (present and future) related to the factories at aforesaid four locations.

(iv) The Sugar Development Fund loan (SDF) from Government of India is secured/to be secured, on exclusive second charge basis, by hypothecation of the whole of movable fixed assets and properties and by mortgage on the whole of immovable fixed assets and properties of the concerned sugar unit of the Company. The Company has also created security in favour of Government of India for certain other SDF loans aggregating to Rs.24.10 crore, that are yet to be disbursed to the Company, on exclusive second charge basis, by hypothecation of the entire movable fixed assets and properties and by mortgage on the whole of immovable fixed assets and properties of the respective sugar units for which the said SDF loans have been sanctioned.

(v) Term loans from Punjab National Bank of Rs.4.33 crore related with amalgamating company Bajaj Eco-Tec Products Ltd. (BEPL) are secured on first pari passu charge basis by hypothecation of the whole of the present and future movable fixed assets and properties including plant and machinery, machinery spares, tools and accessories and other movables of the Company and also secured / to be secured on first pari passu charge basis by mortgage (by deposit of title deeds) on whole of the present and future immovable fixed assets and properties of the amalgamating company.

(i) Loan from banks (Working capital / Short term loans facilities) except Working Capital / Short term loans of Rs. 1,350.00 crore and Rs.63.99 crore (refer note (ii) to (v) below) are secured, on first pari passu charge basis, by hypothecation of inventories, book debts, other receivables and current assets and further secured / to be secured, on a third pari passu charge basis, by hypothecation of certain movable fixed assets and properties and by mortgage on certain immovable fixed assets and properties of the Company. Documentation for mortgage in respect of certain loans is under finalisation.

(ii) Cash credit limit of Rs. 50 crore from UCO Bank is secured by way of subservient charge on fixed assets (excluding land and building) and current assets of the Company.

(iii) Short term loans of Rs.400 crore is secured by subservient pari passu charge on the entire asset both present and future, short term loan of Rs.450 crore is secured by subservient pari passu charge on the entire fixed assets both present and future and Short term loan of Rs. 200 crore is secured by subservient pari passu charge on the entire asset (excluding Land & Building) both present and future.

(iv) Short term loan of Rs.250 crore from Bank of Maharashtra is secured by way of residual charge on the assets of the Company by way of hypothecation.

(v) Working capital loans of Rs.63.99 crore from banks in respect of amalgamating company i.e. (BEPL) are secured on first pari passu charge basis by hypothecation of present and future Inventories, book debts and other receivables and further secured on a second pari passu charge basis by hypothecation of the whole of present and future movable fixed assets and properties and also secured on a second pari passu charge basis by mortgage on whole of present and future immoveable fixed assets and properties of the amalgamating company.

* These figures do not include any amount due and outstanding to be credited to Investor Education and Protection Fund.

* Includes statutory dues, security deposits, advances from customer and other liabilities.

* The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 30th September, 2012 of Rs.16.30 crore (P.Y.Rs. 20.00 crore) as per the estimated pattern of dispatches. During the year, Rs.20.05 crore was utilised for clearance of goods. Provision recognised under this class for the year is Rs. 17.41 crore which is outstanding as on 30th September, 2012. Actual outflow is expected in the next financial year. Other class of provisions where recognition is based on substantial degree of estimation relates to supplier/ service provider/ customer/ third party claims, rebates or demand against the Company.

Notes:

(i) Loans and Advances shown above, to subsidiaries fall under the category of "Short Term Loans and Advances" in the nature of Loans where there is no repayment schedule and are repayable on demand.

(ii) The above loans and advances (outstanding) are interest bearing except advance against share application money.

(iii) Loans to employees as per Company''s policy are not considered above.

a. Provident Fund

The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the year ended September 30, 2012. The actuary has accordingly provided a valuation based on the below provided assumptions and there is no shortfall as at September 30, 2012.

Notes:

1. Related Party relationship is as identified by the Company based on the available information and relied upon by the Auditors.

2. No amount has been written off or written back during the year in respect of debts due from or to related parties.

3. Purchase of Capital Goods includes Rs. NIL (P.Y. Rs. 28.83 crore) from Bajaj Infrastructure Development Company Ltd.

4. Sale of Goods Includes Rs. 21.00 crore (PY. Rs. 280.75 crore) to Bajaj Hindusthan (Singapore) Pvt. Ltd., Singapore and Rs. 23.84 crore (P.Y. Rs. 48.84 crore) to Bajaj Eco-Tec Products Ltd.

5. Interest received includes Rs. 11.72 crore (P.Y. Rs. 12.47 crore) from Bajaj Eco-Tec Products Ltd. And Rs. 45.46 crore (PY. Nil) from Bajaj Power Generation Private Limited on loan given to them.

6. Remuneration includes Rs. 1.91 crore (PY. Rs. 2.18 crore) to Mr. Shishir Bajaj, Rs. 1.38 crore (PY. Rs. 1.44 crore) to Mr. Kushagra Bajaj and Rs. 2.00 crore (P.Y. Rs. 1.22 crore) to Dr. Sanjeev Kumar.

7. Advance Given (Project) includes Rs. NIL (P.Y. Rs. 50.00 crore) to Bajaj Infrastructure Development Company Ltd.

8. Advance Given (Project) repaid includes Rs. NIL (P.Y. Rs. 50.00 crore) from Bajaj Infrastructure Development Company Ltd.

9. Advance given (Against allotment of Shares) includes Rs. 250.00 crore (P.Y. NIL) to Lalitpur Power Generation Company Ltd. and Rs. 234.00 crore (P.Y. Rs. 26.00 crore) to Bajaj Energy Pvt. Ltd.

10. Advance given (Against allotment of Shares) refunded of Rs. 122.00 crore (P.Y. Nil) from Bajaj Energy Private Ltd.

11. Rent received includes Rs. 0.63 crore (PY. Rs. 0.63 crore) from Bajaj Energy Pvt. Ltd.

12. Rent paid includes Rs. 0.72 crores (P.Y. Rs. 0.72 crores) to Bajaj Capital Ventures Pvt. Ltd.

13. Investment made includes Rs. 66.00 crore (P.Y. NIL) in Bajaj Energy Pvt. Ltd. and Rs. NIL (P.Y. Rs. 234.98 crore) in Lalitpur Power Generation Company Ltd.

14. Investment brought back of Rs. NIL (PY. Rs. 4.55 crore) of Bajaj International Participacoes Ltda., Brazil.

15. Loans given includes Rs. 93.75 crore (P.Y. Rs. 243.28 crore) to Bajaj Eco-Tec Products Limited and Rs. 1,413.25 crore (P.Y. Nil) to Bajaj Power Generation Pvt. Ltd.

16. Loans given repaid includes Rs. 50.00 crore (P.Y. Rs. 109.36 crore ) from Bajaj Eco-Tec Products Ltd and Rs. 720.00 crore (P.Y. Nil) from Bajaj Power Generation Pvt. Ltd.

17. Guarantees Given includes Rs. 2,483.93 (PY. 1,824.00 crore) to Lalitpur Power Generation Company Ltd.

18. Dividend received includes Rs. Nil (PY. 0.60 crore) from Bajaj International Participacoes Ltds., Brazil.

2. Contingent Liabilities and Commitments

2011-2012 2010-2011 Rs. Crore Rs. Crore

(I) Contingent liabilities

(a) In respect of disputed demands/claims against the Company not acknowledged as debts:

(i) Central excise matters 33.28 32.04

(ii) Trade tax matters 29.49 8.50

(iii) Other claims 33.21 46.24

95.98 86.78

(b) Guarantees

The Company has furnished guarantees / securities on behalf of subsidiary / associate company 3,040.04 2,409.33

(II) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 15.44 4.09

(c) Erstwhile Bajaj Eco-Tec Products Ltd. has procured imported as well as Indigenous Capital Goods under Export Promotion and Capital Goods Scheme (EPCG). The Export obligation pending against such EPCG licenses 22.24 -

(d) The Income tax assessment of the Company has been completed upto Assessment Year 2009-10. However, the Company as well as the Income Tax Department are in appeal before the Appellate authorities against the assessment of the earlier years. These appeals have not resulted into any demand on account of carry forward losses.

3. Pursuant to the Scheme of Amalgamation (the Scheme) under Sections 391 to 394 of the Companies Act, 1956, the Hon''ble High Court of Bombay pronounced an order on September 14, 2012, sanctioning the Scheme of Amalgamation of Bajaj Eco-Tec Products Limited (BEPL or Amalgamating Company) a wholly owned subsidiary company with the Company with effect from the appointed date April 01, 2012. Upon filing with the Registrar of Companies Maharashtra, Mumbai on October 01, 2012, the Scheme has become effective. BEPL is engaged in the business of manufacturing Medium Density Fibre (MDF) Boards and Particle Boards.

a) In terms of the Scheme approved by the Hon''ble High Court, the entire business and whole of the undertaking of BEPL, as a going concern stands transferred to and vested in the Company with effect from April 01, 2012 being the Appointed Date.

b) As BEPL was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation.

c) Accounting for Amalgamation: The amalgamation of BEPL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standards (AS)-14 on Accounting for Amalgamation specified in the Companies (Accounting Standard) Rules 2006 and in terms of the Scheme, as below.

d) All assets and liabilities of BEPL were recorded at their respective book values under the respective accounting heads of BHL. The intercompany balances and transaction stood cancelled. As a result of merger, there is no deficit or surplus arising between the aggregate value of assets taken over by the Company and aggregate value of the liabilities and reserves of BEPL. The cost or expenses related to merger amounting to Rs. 0.68 crore have been adjusted with general reserve of the Company, as per the Scheme.

e) From the effective date the authorised share capital of the Company will be Rs. 271.00 crore divided into 2,71,00,00,000 equity shares of the face value of Rs. 1 each.

f) BEPL stands dissolved without being wound up from the Effective Date i.e. October 01, 2012.

4. The Company concluded a Rights Issue in October 2011 and raised an aggregate of Rs. 1,479.75 crore with the principal object of repaying/prepaying certain loan funds. Upon allotment of 41,10,42,800 equity shares of face value Rs.1/- at a price of Rs. 36/- per share (including share premium of Rs.35/- per share) on October 31, 2011, the paid up Equity Share Capital and Share Premium Account have increased by Rs.41.10 crore and Rs. 1,438.65 crore respectively. These newly allotted shares rank pari passu in all respect with the existing equity shares of the Company. Out of the net Rights issue proceeds, an aggregate sum of Rs. 1,453.73 crore have been utilised towards objects of the issue upto September 30, 2012. Pending utilisation, the balance proceeds have been temporarily used to reduce the exposure of working capital borrowings from banks, which will be redrawn as and when necessary to meet the obligations as per the object of the issue.

5. As required by paragraph 46 inserted vide notification dated March 31, 2009 to the Accounting Standard AS-11 "The Effect of Changes in Foreign Exchange Rates", the Company had already opted to adjust the exchange fluctuations on Long Term Monetary Items to the carrying cost of fixed assets. Further as per paragraph 46A, inserted vide notification dated December 29, 201 1 to AS-11, the Company has adjusted Rs. 67.76 crore being the loss on exchange fluctuation on long-term monetary items for the financial year September 30, 2012 to carrying cost of fixed assets. The unamortised foreign exchange fluctuation capitalised to fixed assets, amounts to Rs.323.19 crore as at September 30, 2012.

6. Due to absence of profits during the year, the managerial personnel have been paid the remuneration as approved by shareholders and remuneration committee as minimum remuneration along with the approval of Central Government, wherever applicable.

7. Pursuant to the General Circular no. 2/2011 dated 8th February, 2011 of Ministry of Corporate Affairs and consent of the Board of Directors vide their resolution passed at the Board Meeting held on November 26, 2012 for not attaching the Balance Sheets of subsidiaries, the Company has not attached with its Balance Sheet as at September 30, 2012, the documents specified in Section 212(1) of the Act in respect of its four subsidiaries, viz. (i) Bajaj Aviation Private Limited, (ii) Lalitpur Power Generation Company Limited, (iii) Bajaj Power Generation Private Limited, (iv) Bajaj Hindusthan (Singapore) Private Limited, and has disclosed the requisite information in the Consolidated Balance Sheet as at September 30, 2012 in Annexure A.

8. For the year ended September 30, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company for preparation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year,

9. As per Accounting Standard (AS)-17 on "Segment Reporting", segment information has been provided under the notes to Consolidated Financial Statements.

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Sep 30, 2010

As at As at Sept. 30, 2010 Sept. 30, 2009 Rs. Crore Rs. Crore

1. Contingent Liabilities not provided for:

(a) In respect of disputed demands/ claims against the Company not acknowledged as debts:

(i) Central Excise matters 26.77 31.87

(ii) Trade Tax matters 2.53 0.58

(iii) Income Tax matters (Previous year Rs. 17,074/-) - 0.00

(iv) Other Claims 29.83 41.22

2. The disclosures in respect of Related Parties as required under Accounting Standard 18 (AS18) Related Party Disclosures is stated herein below / set out in a separate statement annexed hereto.

a) Related parties and relationships for which disclosure is required under AS18:

A. Subsidiary Companies

1. Bajaj Aviation Private Ltd. (Step Down Subsidiary)

2. Bajaj Eco-Tec Products Ltd. (Wholly owned)

3. Bajaj Energy Private Ltd. (Formerly known as Bajaj Eco-Chem Products Private Ltd.)

4. Bajaj Hindusthan Sugar and Industries Ltd. (upto 31.03.2010)

5. Bajaj Internacional Participações Ltda., Brazil (Wholly owned)

6. Bajaj Hindusthan (Singapore) Pte Ltd., Singapore (Wholly owned)

B. Associates and Joint Ventures Bajaj E-biz Private Ltd. – Associate

C. Directors and their relatives

Mr. Shishir Bajaj - Chairman & Managing Director (Key management personnel)

Mrs. Minakshi Bajaj (Wife of Mr. Shishir Bajaj)

Mr. Kushagra Bajaj - Joint Managing Director (Key management personnel) and also son of Mr. Shishir Bajaj.

Mr. Apoorva Bajaj (Son of Mr. Shishir Bajaj)

Dr. Sanjeev Kumar, Director (Corporate and Legal Affairs) (Key management personnel).

D. Enterprises over which any person described in (C) above is able to exercise signifcant infuence

1. Bajaj Capital Ventures Private Ltd.

2. Bajaj Holding & Investment Ltd.

3. Bajaj Infrastructure Development Company Ltd.

4. Shishir Bajaj Family Trust

3. As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

4. The Company has allotted 14,500,000 new Equity Shares on January 4, 2010, upon receipt of the entire remaining sum of Rs.56.70 Crore representing 75% of the total value for such warrants and exercise of the rights by a promoter group entity of the Company on all the 14,500,000 warrants allotted earlier on May 18, 2009 on preferential basis carrying right to subscribe for and be allotted one (1) fully paid equity share of face value Re. 1 each per warrant, at a price of Rs. 52.14 per equity share in accordance with the SEBI Preferential Issue Guidelines. Subsequently, after the allotment of these new Equity Shares, the paid up Equity Share Capital and Securities Premium Account have increased by Rs. 1.45 Crore and Rs.74.15 Crore respectively.

5. Pursuant to Approval under Section 212(8) of the Companies Act, 1956 (the Act) accorded by Government of India, Ministry of Corporate Affairs, vide its letter No. 47/652/2010-CL-III dated 29-07-2010, the Company has not attached with its Balance Sheet as at September 30, 2010, the documents specified in Section 212(1) of the Act in respect of its six subsidiaries, viz. (i) Bajaj Hindusthan Sugar and Industries Ltd., (ii) Bajaj Eco-Tec Products Ltd., (iii) Bajaj Aviation Pvt. Ltd., (iv) Bajaj Energy Pvt. Ltd., (v) Bajaj Hindusthan (Singapore) Pte. Ltd., and (vi) Bajaj Internacional Participações Ltda., and has disclosed the requisite information in the Consolidated Balance Sheet as at September 30, 2010.

6. The previous years figures have been regrouped, rearranged and reclassified wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year. In view of the amalgamation of Bajaj Hindusthan Sugar and Industries Limited described in Note- 2 above, the figures of the current year are to that extent not comparable with those of previous year.

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Sep 30, 2009

As at Sept. 30, 2009 Rs. Million

1. Contingent Liabilities not provided for:

a) In respect of disputed demands/claims against the Company not acknowledged as debts:

(i) Central Excise matters 318.65 338.33

(ii) Trade Tax matters 5.77 7.86

(iii) Income-tax matters 0.02 0.02

(iv) Other claims 412.21 306.56

(b) The Company has furnished following guarantees on behalf of Bajaj Eco-Tec Products Ltd., (wholly owned subsidiary):

(i) Corporate Guarantee of Rs. 740 Million (Rs. 740 Million) to a bank for credit facility given against which the outstanding balance as at the year end is Rs. 556.89 Million (Rs. 579.72 Million).

ii) Bank Guarantee of Rs. Nil (Rs. 1.50 Million ) in favour of U.P. State Pollution Control Board for obtaining No Objection Certificate (NOC) from the Pollution Control Department for setting up Medium Density Fibre Board and Particle Board Plants.

2. The disclosures in respect of Related Parties as required under Accounting Standard 18 (AS18) ‘Related Party Disclosures’ is stated herein below / set out in a separate statement annexed hereto.

a) Related parties and relationships for which disclosure is required under AS18:

A. Subsidiary Companies

1. Bajaj Aviation Private Ltd. (Step Down Subsidiary)

2. Bajaj Eco-Tec Products Ltd. (Wholly owned)

3. Bajaj Eco-Chem Products Private Ltd. (Wholly owned)

4. Bajaj Hindusthan Sugar and Industries Ltd.

5. Bajaj International Participações Ltda., Brazil (Wholly owned)

6. Bajaj Hindusthan (Singapore) Pte Ltd., Singapore (Wholly owned)

B. Associates and Joint Ventures Bajaj E-biz Private Ltd. – Associate

C. Directors and their relatives

Mr. Shishir Bajaj - Chairman & Managing Director (Also key management personnel)

Mrs.Minakshi Bajaj (Wife of Mr.Shishir Bajaj)

Mr. Niraj Bajaj - Non Executive Director (resigned w.e.f.December 31, 2008)

Mr. Kushagra Bajaj - Joint Managing Director (Also key management personnel) and also son of Mr. Shishir Bajaj

Mr. Apoorva Bajaj (Son of Mr.Shishir Bajaj)

Mr. I. D. Mittal - Chief Executive Director (Also key management personnel) (resigned w.e.f. February 6, 2009)

Mrs. Sureshtha Mittal - Wife of Mr. I. D. Mittal (upto February 05, 2009)

Dr. Sanjeev Kumar, Director (Corporate and Legal Affairs) (Also key management personnel) (Appointed w.e.f. March 12, 2009)

D. Enterprises over which any person described in (C) above is able to exercise significant influence

1. Bajaj Capital Ventures Private Limited

2. Bajaj Electricals Limited (up to December 31, 2008)

3. Bajaj Holding & Investment Ltd.

4. The Hindusthan Housing Co. Ltd. (up to December 31, 2008)

5. Hind Musafir Agency Ltd. (up to December 31, 2008) 6. Mukand Ltd. (up to December 31, 2008)

3. Segment Information:

The Company has identified its Business Segments as its Primary Reportable Segments comprising of Sugar, Distillery and Power Divisions.

Other disclosures :

1. The Company caters mostly to Indian markets and as such there are no reportable geographical segments. All the assets are also located in India.

2. Segments have been identified in line with the Accounting Standard - 17 "Segment Reporting" taking into account the organisation structure as well as differing risks and returns.

3. The Segment Revenue, Results, Assets and Liabilities include respective amounts identifiable to each of the segment and amounts allocated on reasonable basis.

4. The segment performance has been worked out after attributing the realisable value of inter segment transfer of material.

4. Out of outstanding Foreign Currency Convertible Bonds (FCCBs) aggregating to US$ 119.50 Million, FCCBs of the aggregate face value of US$ 19.93 Million were repurchased at discount and cancelled during the year. The resultant gain (net of expenses) of Rs. 337.15 Million on account of the extinguishment of corresponding liability has been accounted for under the head "Other Income".

5. The Company has allotted 14,500,000 warrants on preferential basis to the promoter group of the Company on May 18, 2009 after receipt of a sum of Rs. 189.01 Million representing 25% of the total value for such warrants in accordance with the SEBI Preferential Issue Guidelines. Each warrant entitles the holder to subscribe for and be allotted one (1) equity share of the company any time within a period of 18 months from the date of allotment of the warrants.The issue proceeds in this regard have been utilised for repayment of debts.

6. The Company had launched a Qualified Institutions Placement (QIP) on June 29, 2009 and raised equity funds aggregating to Rs. 7,231.80 Million (approx US $ 150 Million) by issuing an aggregate of 35,450,000 equity shares of face value Re. 1 each, at a price of Rs. 204 per equity share, to certain "Qualified Institutional Buyers" (QIBs) in accordance with the terms of Chapter XIII-A of the SEBI (DIP) Guidelines. Subsequently, after the allotment of these new equity shares to the respective QIBs on July 3, 2009, the paid up Equity Share Capital and Securities Premium Account have increased by Rs. 35.45 Million and Rs. 7,196.35 Million respectively. The net funds from the QIP proceeds have been utilised in full for repayment / pre-payment of debts, in accordance with the terms of the issue.

7. In compliance with the Notification dated March 31, 2009 issued by Ministry of Corporate Affairs, the Company has exercised the option as inserted by Paragraph 46 to the Accounting Standard AS-11 "The Effect of Changes in Foreign Exchange Rates". Accordingly Foreign Exchange Loss of Rs.1,322.84 Million for the year ended September 30, 2009 has been adjusted to Capital Assets. For the accounting year ended September 30, 2008, foreign exchange loss of Rs. 584.87 Million (net of Provision Rs. 836.53 Million, Gross Rs. 1,421.40 Million) was debited to profit and loss account. In terms of the said notification, while the gross loss of Rs. 1,421.40 Million has been carried to the capital assets and credited to General Reserve, Provision for Exchange Fluctuation of Rs. 836.53 Million now not required, has been written back to the Profit and Loss Account as Provision no longer required and reflected under the head “Other Income”.

As a result of this change, depreciation for the year is higher by Rs. 125.93 Million, loss on foreign currency fluctuation is lower by Rs. 1322.84 Million and profit for the year is higher by Rs. 1196.91 Million.

8. The Honble High Court of Allahabad while disposing the various Writ Petitions filed by the Company and other sugar producing factories, by its Order dated December 19, 2007 had, inter alia, quashed the State Advised Price (SAP) for the season 2006-07 being arbitrary and unreasonable. Based on the legal advice, the Company in previous year, had accounted for Sugar Cane liability for the season 2006-07 at Statutory Minimum Price (SMP) fixed by the Central Government.

Subsequently Honble Supreme Court on a Special Leave Petition directed the sugar companies by its interim order dated February 27, 2008 to pay @ Rs.118/- per quintal for general variety of sugar cane and accordingly the company has fully discharged its cane liability. Necessary adjustment in accounts arising out of difference between SAP and SMP amounts to Rs. 4,652.42 Million will be considered as and when the matter is finally decided.

9. During the Financial Year 2007-08 the Company has accounted for Sugar Cane Purchases for the season 2007-08 @ Rs.110/- per quintal pursuant to the Interim Order dated September 08, 2008 of the Honble Supreme Court of India. The Company has fully discharged its cane liability as per the said interim order. Necessary adjustment in accounts arising out of difference between SAP of Rs. 125/- per quintal and Rs. 110/- per quintal amounts to Rs. 1,054.57 Million will be considered as and when the matter is finally decided.

10. Pursuant to Approval under Section 212(8) of the Companies Act, 1956 (the Act) accorded by Government of India, Ministry of Corporate Affairs, vide its letter No. 47/687/2009-CL-III dated 14-10-2009, the Company has not attached with its Balance Sheet as at September 30, 2009, the documents specified in Section 212(1) of the Act in respect of its six subsidiaries, viz. (i) Bajaj Hindusthan Sugar and Industries Ltd., (ii) Bajaj Eco-Tec Products Ltd., (iii) Bajaj Aviation Pvt. Ltd., (iv) Bajaj Internacional Participações Ltda. Brazil, (v) Bajaj Hindusthan (Singapore) Pte. Ltd., and (vi) Bajaj Eco-Chem Products Pvt. Ltd, and has disclosed the requisite information in the Consolidated Balance Sheet as at September 30, 2009.

11. Previous year figures have been regrouped wherever necessary and have been shown in brackets.

12. Significant Accounting policies followed by the Company are as stated in the statement annexed to this Schedule (Annexure A).

13. Information required in terms of Part IV of Schedule VI to the Companies Act,1956 is attached. Signatures to Schedules “1” to “16”