SBEC Sugar Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the 30th Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2024.

The summarised financial results of SBEC Sugar Ltd. as well as Consolidated with its subsidiaries i.e. SBEC Bioenergy Limited and SBEC Stockholding and Investment Limited for the financial year ended 31st March, 2024 are as under:

The crushing for the season 2023-24 started on November 04, 2023 and ended on April 15, 2024 and cane crushed during season 2023-24 was 134.31 Lac Qtls as compared to 133.44Qtls in the last season.

Company crushed 134.31 Lac Qtls sugarcane. During this season the recovery increased by 0.59 %.

Your Companys sugar factory is in U.P. where state government announces the Sate Administered cane Price (SAP), which is much higher than the Fair Remunerative Price (FRP). This creates a distortion in the industry because SAP is neither linked to sugar recovery nor does it take into account domestic and global prices and other relevant parameters. As a result, when sugar prices are low, mill owners are unable to pay to farmers resulting in delayed payment, huge cane price arrears and trust deficit between farmers and millers.

Sugar season 2023-24 started with the overall industry opening stock at 57 Lac Tons. All India Production of sugar is estimated to be around 320 Lac Tons (against initial estimates of 305 Lac Tons) and domestic consumption at 285 Lac Tons. As a result, the closing stock of sugar as on 30th September, 2024 is estimated to be around 92 Lac Tons which is sufficient for 4 months consumption.

Despite several challenges, your company lays continuous thrust on strong farmer relationship, cost control, efficiency improvement and continue to focus on cane development activities, comprising clean cane, varietal change and modern agriculture practices which is expected to further improve productivity in the coming years.

Next to Brazil, India is the largest global producer of sugar. In India, sugarcane is produced majorly in nine states, viz., Uttar Pradesh, Maharashtra, Karnataka, Punjab, Andhra Pradesh, Bihar, Gujarat, Haryana, and Tamil Nadu. It is one of those important agro-based industries that impacts the rural livelihood of many. Demand for cane and sugar is increasing in India because of their extensive use in applications like food and beverages, bakery, confectionery, and others.

Indias forecast of sugarcane produce was 31.6 million tonnes for the current 2023-24 (October- September) sugar season and is expected to move down to 29 million tonnes in the upcoming 2024- 25 season. The projected sugar production for India in the 2024-25 season is anticipated to decline to 28 million tonnes.

2024, which will be operated by Agriculture and Processed Food Products Export Development Authority (APEDA).

Shipments under the TRQ enjoy lower customs duty. Post the completion of the quota, a higher duty is imposed on additional imports. In July 2023, the Office of the US Trade Representative had announced the country-specific (including from India) and first come, first-served in-quota allocations of the TRQs on imported raw cane sugar, refined and specialty sugar, and sugar-containing products for the sugar season 2023-24.

Sugar production has reached 302.20 LMT till March of the current season against 300.77 LMT of the previous season. The industry body Indian Sugar and Bio-Energy Manufacturers Association (ISMA) is expecting a normal to above normal southwest monsoon for the year 2024 based on the reports from weather forecasting agencies.

Consequently, a moderate crushing season is expected in the 2024- 25 season. It has also revised the sugar production estimate for 2024-25 upwards to

340 LMT; up by 2.9% from its earlier estimate of 330 LMT issued in January 2024.

The industry body stated that closing stock will be sufficient enough to cater around three months into next season (2024-25). In its report/statement, it stated that the recent weather conditions have been favourable for the standing cane crop, and cane commissioners of major states like Uttar Pradesh, Maharashtra and Karnataka have done an upward revision of around 5-10% in their sugar production estimates for the 2024-25 season.

The future of the sugar industry appears encouraging; nevertheless, certain concerns need urgent attention. The Government has always been proactive and supportive of the industry, keeping in mind the size of the sugar industry and the number of livelihoods associated with it. However, the focus equally needs to be on addressing problems connected to Fair and Remunerative Price (FRP) or increase in Minimum Selling Price (MSP) and cane arrears. In June 2018, the Indian government fixed the MSP of sugar for the first time at Rs. 29 per kg when the FRP of sugarcane was Rs. 2,550 per ton.

Subsequently, The Cabinet Committee on Economic Affairs approved the Fair and Remunerative Price (FRP) of sugarcane for Sugar Season 2024-25 at Rs. 340/quintal at sugar recovery rate of 10.25%. This price of sugarcane is about 8% higher than FRP of sugarcane for current sugar season 2023-24. The revised FRP will be applicable w.e.f. October 2024. Following the Central Governments decision to raise the Fair and Remunerative Price (FRP) for sugarcane 2024-25 season, associations and other sugar millers have come together and represented the Government to increase the Minimum Support

Price (MSP).

As the Company has earned profit during the year under review, your Board has not recommended any dividend for the financial year ended March 31,

2024, as the Company incurred losses in the previous years.

The paid up equity capital as on March 31, 2024 was Rs.4765.38 Lacs. During the year under review, the Company has not issued any shares or any

other security.

No material changes or commitments have occurred between the end of the financial period to which the financial statements relate and the date of this report, affecting the financial position of the Company.

The Board of Directors in its meeting held on November 06, 2024 approved the acquisition of rest 45% equity shares of the SBEC Bioenergy Ltd from Moderate Leasing & Capital Services Ltd, subject to shareholders approval. Subsequently the shareholders of the Company approved the said acquisition through postal ballot on 28th December, 2023.

Due to said acquisition, as on March 31st 2024, the Company has two Wholly Owned Subsidiary i.e. SBEC Stockholding & Investments Limited & SBEC

Bioenergy Limited.

There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies are annexed in Form AOC-1 and marked as "Annexure-A" to the Annual Financial Statements.

On the basis of Audited Financials Accounts of the Company for the FY.2023-24 the Company has two Material Subsidiary Companies i.e. SBEC Bioenergy Limited and SBEC Stockholding & Investment Limited. The Minutes of the Board Meetings of the subsidiary companies are placed at the Board Meetings of the Company. Details of significant transactions and arrangements entered into by the subsidiary companies are noted by the Board. The Audit Committee of the Company reviews the financial Statement of the subsidiary companies including investments made.

There has been no change in relationship of any subsidiary company during the financial year.

The consolidated financial statements of the Company for the financial year 2023-24, are prepared in compliance with applicable provisions of the

Companies Act, 2013, Indian Accounting Standard (Ind AS) and SEBI (LODR) Regulations, 2015.

During the year Mr. Sudhanshu Goil & Mr. J. C. Chawla had resigned as Independent Directors w.e.f. September 06, 2023 & November 06, 2023 respectively.

In the previous Annual General Meeting the shareholders of the Company had approved the Change in designation of Mr. Vijay Kumar Modi from Non- Executive Independent Director to Non-Executive Non Independent Director & also approved the re-appointment of Sh. Abhishek Modi as Whole Time Director.

The Board of Directors had in its meeting held on November 06, 2023 appointed Dr. Pramod Kumar Gupta as Non-Executive Independent Director and accept the request of Mr. Abhishek Modi for change in his designation from Whole Time Director to Non-Executive Director, as he had shown his unwillingness to act as Whole Time Director of the Company. The said appointment and change in designation was later approved by the shareholders through the postal ballot dated December 28, 2023.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Kumkum Modi & Mr. Jayesh Modi, Directors of the Company retire by rotation at the ensuing Annual General Meeting and they are eligible for re-appointment.

The Board has also approved the Appointment cum Change in designation of Mr. Vipin Kumar as Whole Time Director and it designate him as Whole Time

Director cum Occupier in its meeting held on August 14, 2024 and recommend the same for shareholders approval in the ensuing Annual General Meeting.

In the Board Meeting held on August 14, 2024, the Board members has approved the re-appointment of Sh. Umesh Kumar Modi as Director w.e.f. April 01, 2024 under Regulation 17(1)(D) of the SEBI (LODR) Regulations, 2015 and recommend the same for shareholders approval in ensuing Annual General Meeting.

The Board of Directors in its meeting held on August 26, 2024 appointed following persons as Additional Non-Executive Independent Director of the period of five years w.e.f. September 16, 2024. The Board also recommend their regularization as Independent Directors of the Company in ensuing Annual General Meeting.

Particulars of Directors seeking appointment/re-appointment have been given in the explanatory statement annexed to the notice for the Annual General Meeting.

All the Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

During the financial period ended 31.03.2024, details of Chairman & Whole Time Key Managerial personnel (KMP) of the Company are as follows:

Shri. Vipin Kumar was appointed as Manager by the Board of Directors in its Meeting held on November 06, 2023 and had designated him Manager Cum Occupier w.e.f. November 27, 2023 and same was approved by the shareholders through postal ballot dated December 28, 2023.

Shri. Abhishek Modi was step down as Whole Time Directors to Non-Executive Director of the Company w.e.f. November 06, 2023

The Board met seven times during the financial year 2023-24, the details of which are given in the Corporate Governance Report. The intervening gap

between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR), Regulations, 2015.

Pursuant to the requirements of Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements), 2015, the Board has carried out a performance evaluation of itself, its Committees, the Chairman and each of the other Directors.

A structured questionnaire was prepared after taking into consideration the inputs received from the Directors covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligation and governance.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board. The performance evaluation of Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors at their meeting held separately.

At the conclusion of the evaluation exercise, the Members of the Board assessed that the Board as a whole together with each of its committees was working effectively towards performance of its key functions.

In the opinion of Board, said directors have high moral values, rich experience in the field of finance, Business management & administration.

Pursuant to the provisions contained in Section 134 (5) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according

to information and explanations obtained from the management, confirm that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed and

there are no material departures from the same;

2. the Board of Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the statement of profit and loss of the Company for the year ended on that date;
3. the Board of Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions

of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the Annual Accounts on a going concern basis.
5. The Directors have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating

effectively; and

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and

operating effectively.

All Independent Directors of the Company have given declarations for the financial year 2023-24, that they meet the criteria of Independence as laid down

under Section 149(6) of the Companies Act, 2013 and SEBI (LODR), Regulations, 2015.

Your company has in place an adequate internal control system in order to ensure that all transactions are authorized, recorded and reported correctly and that all assets are protected against the perils of unauthorized use or disposition. Towards enhancing the efficiency of internal controls, services of consultants are hired wherever necessary, and their suggestions are reviewed and implemented. Your Company has in place an Internal Audit system, whereby an independent professional firm of Internal Auditors conducts regular audit across the Company and their scope and findings are reviewed by the Management and Audit Committee on a regular basis.

The Audit Committee of the board also meets periodically to review the internal controls, internal audit findings, action taken reports and to advise the

management on corrective policies, if any.

M/s. Doogar & Associates, Chartered Accountants (FRN.000561N) were appointed as Statutory Auditors of the Company for a term of 5 Years to hold office from the conclusion of 28th Annual General Meeting (AGM) held on September 29, 2022 and their tenure will expire after the conclusion of the 33rd Annual General Meeting.

The Auditors Report of M/s. Doogar & Associates, Chartered Accountants contains qualifications and the Company has given its comments on Auditor Qualified Opinion for the Financial Year 2023-24. The details are mentioned here under:

Under the power vested with the Cane Commissioner (U.P) for waiver of interest under U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 in respect of loss making/ sick companies, the Company had made an application to Cane Commissioner (U.P.) for waiver of interest on Cane Dues. Pending receipt of the Cane Commissioners decision, no interest has been provided on the cane dues. The Company has decided to account for the same on actual payment basis.

The management is of the opinion that no provision for doubtful debts is required as the company is the major secured creditor of Modi Industries Limited which owns substantial properties which are quite sufficient to take care of its entire liabilities. In view of that the management is confident for recovery of whole amount.

The Company has valued closing stock at NRV of Rs. 3669.92 considering the current market price of around Rs. 3800 per quintal. The same is still lower

As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and

Audit) Rules, 2014 as amended from time to time, your Companys cost records are subject to Cost Audit.

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. M.K. Singhal & Co., Cost Accountants, as the Cost Auditors to audit the cost accounting records maintained by the Company for the financial year 2024-25 at a remuneration of Rs.1,00,000/- plus taxes as applicable and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the notice convening the Annual General Meeting.

The Board appointed M/s Soniya Gupta & Associates, Practicing Company Secretaries, as the Secretarial Auditors to undertake the Secretarial Audit of the Company for Financial Year 2023-24. The Report of the Secretarial Audit along with report of Secretarial Auditors of Material Subsidiary Companies are annexed in "Annexure-B" to this Report.

The observations in secretarial audit report are self-explanatory and therefore do not call for any further explanation.

During the financial year, Company has not accepted any deposit from public within the meaning of section 73 of the Companies Act, 2013 read with

Companies (Acceptance of Deposit) Rules, 2014.

As per Section 134(3) (n) of the Companies Act, 2013, the Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to recognize and reduce exposure to risks wherever possible. The Companys risk management policies are based on the philosophy of achieving substantial growth while mitigating and managing risks involved. Major risks identified are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

The Audit Committee comprises of four Independent Directors, viz., Sh. Anirudh Kumar Modi as Chairman, Sh. Vijay K. Modi, Sh. N.P. Bansal & Dr. Pramod Kumar Gupta as Members. The details of terms of reference of the Audit Committee, number and dates of meeting held, attendance, among others are given separately in the attached Corporate Governance Report.

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with Rules made there under, the Board has constituted a Nomination & Remuneration Committee and the details of terms of reference, number & dates of meeting held, attendance and other details are given separately in the attached Corporate Governance Report. The Board on the recommendation of Nomination & Remuneration Committee framed a policy i.e. Nomination and Remuneration Policy for selection and appointment of Directors, senior managerial personnel and their remuneration.

Pursuant to the provisions of the Section 135 of the Companies Act, 2013 (the Act), the CSR provisions are not applicable as per financial results of immediately preceding financial years of the Company. The CSR Committee constituted by the Board of Directors has been dissolved w.e.f. 9th August, 2018.

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is enclosed in "Annexure-C" and forms part of this Report.

The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014 and forming part of the Boards Report for the year ended March 31, 2024 are given in "Annexure –D" to this Report.

The details of Loans, Guarantees and Investment covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to

financial statements.

The relevant information regarding related party transactions has been set out in Note No. 30 of the Financial Statements for the financial year ended

31.3.2024.

However, there was a transaction between the Company and SBEC Bioenergy Limited which was on arms length basis but the same was a material transaction. All the relevant details of the said transaction have been given in AOC-2 which is enclosed as "Annexure E" and forms part of this directors report.

The Company is committed to a workplace free of harassment, including sexual harassment at the workplace, and has zero tolerance for such unacceptable conduct. The Company encourages reporting of any harassment concerns and is responsive to complaints about harassment or other unwelcome or offensive conduct. The Company has in place a policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Policy). An Internal Complaint Committee is in place to redress the complaints received regarding sexual harassment. All employees are covered under this policy. Necessary disclosures in relation to the sexual harassment complaints received and redressal thereof are provided in Boards Report 2024. The Company also has a Whistleblower Policy to report genuine concerns and grievances. As part of Whistleblower Policy and POSH Policy, there is a provision on the protection of identity of the complainant to provide necessary safeguards against victimization of employees. All such matters are dealt in strict confidence. Also as part of its Code of Conduct, the Company does not tolerate any form of retaliation against anyone reporting legitimate concerns.

During the year from April 1, 2023 to March 31, 2024 the Committee has not received any complaint under the Sexual Harassment of Women at Workplace

(Prevention, Prohibition and Redressal) Act, 2013. At the end of March 31, 2024, no complaint was pending for redressal.

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central

Government as required under Section 118(10) of the Companies Act, 2013.

The equity shares of your Company are listed on the BSE Limited and the Calcutta Stock Exchange Association Limited. The Companys application for

delisting of shares with the Calcutta Stock Exchange Association Limited is still pending.

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website (www.sbecsugar.com). More detail on diversity is available in the corporate governance report that forms part of this Annual Report.

In Compliance with Regulation 17 to 27 of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015, a detailed Corporate Governance

Report has been given elsewhere in this report, along with Management Discussion and Analysis Report, which form an integral part of the Annual Report.

A certificate from M/s Soniya Gupta & Associates, a firm of Company Secretaries in practice confirming compliance by the Company with the conditions of Corporate Governance as stipulated under part E of schedule V of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015 is attached to this report.

The Whole Time Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under SEBI (LODR), Regulations, 2015.

During the year no complaint was filed against the Company under Insolvency & Bankruptcy Code, 2016.

In previous year an application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 against the Company before the National Company Law Tribunal, Allahabad bench alleging default of an amount of Rs. 1,08,02,731/- (Rupees One Crore Eight Lakh Two Thousand Seven Hundred Thirty One). The Honble NCLT bench, Allahabad vide its order dated February 02, 2024 found the petition not maintainable being below the threshold limit. Subsequently the applicant has filed an appeal to the Honble National Company Law Appellate Tribunal, New Delhi against the above said order passed by Honble NCLT bench, Allahabad.

During the year there were no differences in the valuation of the Company, as there was no one time settlement during the FY 2023-24.

During the year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals that could impact the going

concern status of the Company and its future operations.

Your directors hereby place on record their appreciation for the services rendered by the executives, staff and workers of the Company for their hard work, dedication and commitment. During the year under review, relations between the employees and the management continued to remain cordial.

Your directors thank the various Central and State Government Authorities and Agencies for the continued help and cooperation extended by them. The Directors gratefully acknowledge all stakeholders of the Company viz., farmers, customers, members, dealers, vendors and banks for their excellent support during the year. The Directors also place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued cooperation to the Company