1.19 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation in respect of which reliable estimate can be made as on the balance sheet date. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Contingent Liabilities are present obligations arising from a past event, when it is not probable / probability is remote that an outflow of resources will be required to settle the obligation and they are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements except where it has become virtually certain that an inflow of economic benefit will arise, the asset and the related income are recognized in financial statements of the period in which the change occurs Provisions for Contingent Liabilities and Contingent Assets are reviewed at the end of Balance Sheet date.

1.20 Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.21 Exceptional items

Items of income and expenditure within profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items are disclosed separately as Exceptional Items.

1.22 Commitments

(a) Commitments are future liabilities for contractual expenditure.

(b) Commitments are classified and disclosed as follows:

• Estimated amount of contracts remaining to be executed on capital account and not provided for;

• Uncalled liability on shares and other investments partly paid;

• Funding related commitment to subsidiary, associate andjoint venture companies and

• Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.

(c) Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.

a. Share application money pending allotment

This contains Share application money received, pending for allotment to the extent nonrefundable is shown under other Equity.

b Equity Component of Compounded Financial Instrument

This contains the equity portion of the 6% Optionally convertible preference shares.

c. Securities Premium Account

Securities premium is used to record the premium received on the issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

d. Retained Earnings

Retained Earnings are the profits/ (Losses) that the Company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders.

e. Re-measurement gains/(losses) on defined benefits

The Company recognises remeasurement gain / (loss) on defined benefit plans in Other Comprehensive Income. These changes are accumulated within the equity under "Remeasurement gain / (loss) on defined benefit plans" reserve within equity.

f. Money Received against Share Warrants

Represents amounts received towards subscription of compulsorily convertible warrants

11.1 Working Capital Term Loan and Demand loan:

A Primary Security

First and Exclusive charge on entire Current Assets and un-encumbered Fixed Aseets both present and future.

First Charge on immovable properties and Fixed assets of Sugar Unit and Distillery Unit at Kamareddy.

Second Charge on immovable properties and Fixed assets of Sugar Unit at Nizamsagar.

Extension of Charge on current rentals and future rentals of received/receivable by Gayatri Hotels & Theatres Pvt Ltd (i.e. Company in which KMP / Relatives of KMP are interested).

B Collateral Security

1 158.10 Acres Land along with structures owned by Gayatri Sugars Ltd, Kamareddy Unit, located at Adloor Yellareddy Village, Sadasiva Nagar Mandal, Kamareddy District,

2 Second charge on 86.90 Acres Land along with several structures owned by Gayatri Sugars Ltd, Nizamsagar Unit, located at Maagi Village, Gorgal Village and Waddepally village, Nizamsagar Mandal, Kamareddy District,

3 Mortgage of Agricultural Land owned by Gayatri Sugars Ltd admeasuring Ac 3.00 Gts situated at Sy No.161/A Tekriyal Village, Kamareddy Mandal, Kamareddy District on pari-passu basis

4 Mortgage of Agricultural Land owned by Gayatri Sugars Ltd admeasuring Ac 0.10 Gts situated at Sy No.98/A Tekriyal Village, Kamareddy Mandal, Kamareddy District on pari-passu basis

5 Mall & Multiplex Maheshwari Parameshwari situated at Kachiguda Chowrasta, Sultan Bazar, owned by Gayatri Hotels & Theatres Pvt Ltd and Mrs. Aparna Reddy.

6 Pledge of 79 lacs of shares of M/s Gayatri Sugars Ltd belonging to Smt. T. Indira Subbarami Reddy and Sri T. V. Sandeep Kumar Reddy

C Rate of interest

The rate of Interest is K-MCLR 6M, presently 9.20% 4.80%i.e 14%

D Gurantees

1 Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy; Directors of the Company.

2 Corporate guarantee of M/s. Gayatri Fin-Holdings Private Limited, M/s TSR Holdings Private Limited and M/s. Gayatri Hotels and Theaters Private Limited

11.2 Term Loan from Sugar Development Fund (SDF)

A Primary Security

First charge on movable and immovable fixed assets of sugar unit situated at Maagi Village, Nizamsagar Mandal, Kamareddy District, Telangana.

B Terms of Repayment

i The SDF term loan was restructured on 20.05.2022 by capitalising the accrued outstanding interest due of Rs. 1,654.15 Lakhs to the principal amount of the term loan.

ii The restrustured SDF Term Loan carries a moratorium period of 24 Months from the date of restructuring. During the Moratorium period interest shall continue to accrue.

iii Post the Moratorium period, the SDF term Loan including accrued simple interest till 20.06.2024 shall be paid in 60 Equal Monthly Instalments.

iv The restructed SDF Term Loan Carries a interest rate of 4.65% Per Annum.

v Refer note no. 28.14.

11.2 Rights, preferences and restrictions attached to preference shares - Refer note no. 9A(ii)

11.3 Unsecured Loan - From Related Parties

a The loan from related parties carries an interest rate of 9.5%. The interest is payable on or before 01.04.2027 along with principle amount. Further, the lender has an option to convert the said loan in full or part into Equity or Preferential shares at any time during the tenure of the loan. As at 31.03.2024 the lenders has not exercised the option to convert the loan.

b The loan from Gayatri Estates (Enterprises where KMP/Relative of KMP are interested) carries an interest rate of 9.5% and the interest is payable on or before 01.04.2027 along with principle amount.

11.4 Unsecured Loan - From Others

The Lender, has an option to convert the loan in full or partly into Equity or Preference shares of the company at any time

during the tenure of term loan which is 01.04.2027 and rate of interest is 9.5%. The interest is payable on or before

01.04.2027 along with principal amount. As at 31.03.2024 the said lender has not exercised the option to convert the loan.

11.5 Maturity Profile of borrowings including current maturities and interest is as below :

28.4 Capital Management

For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The Company's capital management is intended to maximise the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend payment to shareholders (if permitted). Consistent with other entities in the industry, the Company monitors its capital using the gearing ratio which is net debt divided by total equity.

Financial risk management objectives and policies

The Company's activities expose it to a variety of financial risks like market risk, credit risk and liquidity risks. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk, includes loans and borrowings.

b. Foreign Currency Risk

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee. There is no Foreign Currency Risk as the Company doesn't have exposure in currencies other than Indian Rupee.

c. Equity Price Risks:

Since the Company has not invested in equity investments, the changes of equity securities price would not have a effect on the profit or loss of the Company.

(ii) Comodity Price Risk

Commodity price risk arises due to fluctuation in prices of Sugar Cane, other raw material and products. Cost of Sugar cane is depend on Government policy on fixation of Fair and Remunerative Price (FRP) which is the major cost of production. The company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The company's commodity risk is managed centrally through well-established trading policies and control processes.

(iii) Credit Risk Management

Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities.

The maximum exposure of the assets is contributed by trade receivables, cash and cash equivalents and other bank balances. Credit risk on trade receivables is limited as the customers of the Company mainly consist of the amount to be received from state government entities with respective sale of sugar and power. The company takes into account ageing of accounts receivables and the company's historical experience of the customers and financial conditions of the customers.

(iv) Liquidity Risk:

The company has issued 3,38,00,000 Share Warrants on preferential basis having face value of Rs. 10/-, the amount raised from such allotment shall help the company in its working capital needs. Further, the fact the Sugar Development Fund Term Loan is restructured and only certain provisional aspects are pending thereon. The management of the company is of the view that these factors compiled with the fact that the company has made profit during the year will help the company to improve its future financial position and accordingly the company doesnt forsee any liquidity risks thereon.

Note: In absence reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax Assets, the Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the tax base of assets as per books and as per Income Tax.

28.13 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

28.14 During the previous years, the company had defaulted in repayment of the Sugar Development Fund (SDF) loan. Pursuant to the said default, SDF through its monitoring Institution i.e., IFCI Limited had filed a petition before the Debt Recovery Tribunal (DRT) for recovery of its dues. Subsequently, the Company made an application to the Ministry of Consumer Affairs, Food and Public Distribution (Ministry), Government of India (GOI) for restructuring of the SDF loan as per the operational guidelines issued by the GOI. The Company's application was accepted by the Committee for rehabilitation and recommended to GOI for Administrative Approval (AA) for restructuring of the SDF loan. The GOI issued AA approval on 20.05.2022 which is valid till 30/04/2024, with terms of waiver of penal interest and capitalise the regular interest with principal amount, Rate of Interest @4.65% p.a, moratorium period of 24 months and loan repayable in 60 EMIs. The Company complied with all the terms and conditions of AA and executed loan documents i.e., Tripartite Agreement, Escrow Agreement, Hypothecation Deed and Memorandum of Deposit of Title Deeds (MODT) and registration of MODT in the office of the Sub Registrar of Assurances. The company is confident of registering the MODT before the expiry of the AA granted. In view of the above the company is very much confident that the petition filed by IFCI Ltd before the Debt Recovery Tribunal (DRT) will be withdrawn/disposed.

28.15 (A) During the Financial Year 2023-24, The Company has taken approval for Increase in Authorised

Share Capital of the Company from Rs. 110,00,00,000/- divided into Rs.65,00,00,000/- ( Rupees Sixty Five Crores Only) divided into 6,50,00,000 (Six crores fifty lakhs ) equity shares of Rs.10/- each and Rs. 45,00,00,000/- (Rupees Forty Five Crores Only) divided into 4,50,00,000 (Four Crores Fifty Lakhs) Preference Shares of Rs.10/- each to Rs. 145,00,00,000/- (Rupees One Hundred and Forty Five Crores Only) divided into Rs.100,00,00,000/- (Rupees One Hundred Crores Only) divided into Rs.10,00,00,000/- (Ten Crores) equity shares of Rs.10/- each, and Rs.45,00,00,000/- (Rupees Forty Five Crores Only) divided into 4,50,00,000 (Four Crores Fifty Lakhs) preference shares of Rs.10/-each. The Company has initiated the process of raising funds of Rs.4150.00 lakhs by way of issue of Equity Warrants on preferential basis to arrange the working capital requirement of the Company and general corporate purpose and against such offer the Company had got subscription of 3,38,00,000 share warrants. Against such subscribed share warrants the Company had received amount of Rs.2.50 per share warrant amounting of Rs.845.00 lakhs. Further, the Company has received full subscription amount for 1,00,96,662 shares, amounting to Rs. 1009.67 lakhs and the balance amount shall be received in the due course as per the terms of the share warrants. Further, During the current year the Company had also converted the 1,10,00,000- 6% Optionally convertible preference shares in to same number of equity shares of Rs.10/- each to the promoter group.

(B) During the Financial Year 2023-24, the Company earned a net profit of Rs.703.94 lakhs and further, the Company has raised fund by issue of share warrants and allotment of equity shares against the

share warrants on receipt full subscription amount as stated in note 28.15 (A) above. Further The Company yet to receive the balance subscription amount against pending allotment share warrants and the Company has significantly reduced the working capital exposure. Further based on approvals received from the lenders of the unsecured loans and 6% Optionally convertible preference shares holders, the Company has written off interest accrued during the year on unsecured loans amounting to Rs.187.79 lakhs and has written off preference dividend of Rs.175.48 lakhs. The Management of the Company is of the view that these factors along with the fact that the Company has made a profit during the year will help the Company to improve its future financial position.

28.16 "The Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh dismissed the Company's writ petition (along with the other petitions on the same matter filed by other companies) vide its common order dated May 19, 2016 ('the Order') in which it upheld the validity of levy of Electricity Duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. In the year 2016-17, the Company filed a Special Leave Petition (SLP) in the Hon'ble Supreme Court which dismissed the SLP vide order dated September 27, 2016 on the grounds that these matters were pending before the Board for Industrial and Financial Reconstruction (BIFR), and unless payments were being made by the petitioners as directed in its interim orders @ 15 paisa per unit. The Hon'ble Supreme Court also granted liberty to the petitioners to revive the petitions after the decision is given by the BIFR. Currently, the case filed before BIFR stands abated and the Company has not initiated any proceedings before the NCLT.

The management is of the view that as the case filed before BIFR stands abated and no demand notices were received thereafter for the payment, the Company has treated the estimated duty amount aggregating Rs. 283.99 lakhs as a Contingent Liability and no provision has been made in respect of the same. In the event of an unfavourable verdict/outcome in this matter, the Management based on the Supreme Court's interim orders and considering the inherent uncertainty in predicting the final outcome of the above litigation estimates the impact of the potential liability to be Rs. 170 lakhs.

In view of the above, the auditors have made a Qualified Opinion in their Audit Report about their inability to comment on the ultimate outcome of this matter and the consequential impact, if any, on these financial statements.

Note for Variance in ratios

1 Current ratio: Due to decrease in Trade Payables

2 Debt Equity Ratio: Due to increase in Equity and Decrease in borrowings

3 Debt Service Coverage Ratio: DSCR has decreased due to lower earnings before interest and Tax.

4 Return on Equity Ratio: Due to increase in share capital

5 Trade receivables turnover ratio: Due to decrease in Turnover

6 Net Capital Turnover Ratio: Due to decrease in current liabilities and also due to decrease in curret assets

7 Net Profit Ratio: Due to decrease in turnover.

28.18 The managerial remuneration paid to Managing Director fr the financial year 2023-2024 of ' 60 lakhs was approved by the Share holders at the Annual General Meeting held on 27/09/2023 as per requirement of Section 197 read with schedule V of the Companies Act, 2013.

28.19 Additional Regulatory Information as required by Schedule III of the Companies Act, 2013:

a No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

b No charges are pending for registration with Registrar of Companies (ROC) beyond the statutory period.

c During the current financial year, to the best knowledge of the company, it didn't have any relationship with

Struck-off Companies.

d The Company has not traded or invested in Crypto Currency or Virtual Currency during the current or previous year.

e The Company is not been declared as a Wilful Defaulter by any Bank, Financial Institution or other lenders.

f There is no income surrendered or disclosed as income during the current or previous year in the tax assessments

under the Income Tax Act, 1961, that has not been recorded in the books of account.

g The Company has not entered into any Scheme of Arrangement in terms of sections 230 to 237 of the Companies Act, 2013. Hence there will be no accounting impact on the current or previous financial year.

h During the year the Company has raised funds through private placement of Equity Share Warrants.

i (A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including

foreign entities (Intermediaries) with the understanding that the Intermediary shall: -

a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by on or behalf of the company (Ultimate Beneficiaries) or

b) Provide any guarantee, security, or the like to or on behalf of the ultimate beneficiaries.

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

a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries), or

b) Provide any guarantee, security, or the like to or on behalf of the ultimate beneficiaries.

j The Company has not revalued its property, plant, and equipment during the current or previous year.

k The provisions of Corporate Social Responsibility Under Section 135 of Companies Act 2013 are not applicable

to the Company.

l The Company does not have any Immovable Properties where title deeds are not held in the name of the

Company.

m The Company has not made any investment and do not have subsidiaries, therefore clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, is not applicable.

28.20 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

28.21 Previous years figures have been regrouped / reclassified wherever considered necessary to correspond with the current year classification/ disclosures.

28.22 The financial statements were approved for issue by the Board of Directors on 25.04.2024s

As per our report attached

For M O S & Associates LLP For and on behalf of the Board of Directors

Chartered Accountants

Sd/- Sd/- Sd/-

Oommen Mani T. Sarita Reddy T.V. Sandeep Kumar Reddy

Partner Managing Director Vice Chairman & Director

Membership No. 234119 DIN No : 00017122 DIN No : 00005573

Sd/- Sd/-

Place : Hyderabad V.R. Prasad D.S.V.R. Susmitha

Date : 25th April, 2024 Chief Financial Officer Company Secretary