<dhhead>DIRECTORS' REPORT</dhhead>

To

The Shareholders

SBEC Sugar Limited

Dear Members

Your Directors have pleasure in presenting the 28^th AnnualReport of the Company together with the Audited Accounts for the year ended 31st March2022.

FINANCIAL RESULT

The summarised financial results of SBEC Sugar Ltd. as well asConsolidated with its subsidiaries i.e. SBEC Bioenergy Limited and SBEC Stockholding andInvestment Limited for the financial year ended 31st March 2022 are as under:

(Rs. in Lacs)

OPERATIONS

The crushing for the season 2021-22 started on 10^thNovember 2021 and ended on 15^th May 2022 and cane crushed during season2021-22 was 134.08 Lac Qtls as compared to 148.84 Qtls in the last season.

Company crushed 134.08 lakh Qtls sugarcane. However recovery improvedby 0.12% over the previous Sugar Season due to better cane quality. With gradualacceptance of sugarcane variety Co-0238 by the farmers of the area the cane productionthroughout the State is expected to gradually increase. Your Company's sugar factory is inU.P. where state government announces the Sate Administered cane Price (SAP) which ismuch higher than the Fair Remunerative Price (FRP). This creates a distortion in theindustry because SAP is neither linked to sugar recovery nor does it take into accountdomestic and global prices and other relevant parameters. As a result when sugar pricesare low mill owners are unable to pay to farmers resulting in delayed payment huge canearrears and trust deficit between farmers and millers.

According to ICMR data in the year 2021-22 the sugar production isestimated upto 350 Lakh tons as compared to 311.92 Lakh tons produced in the previouscrushing season. Closing stock as percentage of off take is estimated at 24.80% ascompared to 30.80% last year. Considering an opening stock of 81.86 lakh tons as on 1stOctober 2021 India's consumption of 274 lakh tons sugar exports of 90 lakh tons and anestimated production of 350 lakh tons the closing stock of sugar in India as on 30thSeptember 2022 is placed at 67.86 lakh tons. The scenario may not undergo any significantchange during the forthcoming sugar season. It is expected that the pressure on the sugarprice would continue to remain given the over-supply scenario. Despite several challengesyour company lays continuous trust on strong farmer relationship cost control efficiencyimprovement and continue to focus on cane development activities comprising clean canevarietal change and modern agriculture practices which is expected to further improveproductivity in the coming years.

Long-term Industry Outlook

The Indian Sugar industry is facing a positive turnaround. Thecountry's sugar exports are expected to increase to around 9-10 million tonnes in sugarseason 2022 beginning October following lower production in Brazil due to adverseweather conditions.

With two successive seasons of production deficit international sugarprices hit a five-year high and have augured well for the domestic sugar industry. It isexpected that country's total export for sugar season 2022 will rise 9 to 10 milliontonnes surpassing the previous high of 7.2 million tons in previous season. While India'sexport restriction has not affected prices meaningfully prices are likely to remainrobust with a lower cane output and sugar mix in Brazil which bodes well for Indianexports.

Despite producing a high-quality sugar the competitiveness of Indianexports is affected by the country's high cane costs relative to other major producersincluding Brazil Thailand and Australia rendering exports unviable without subsidy untilabout a year back.

Despite an increase in the production higher exports and diversiontowards ethanol are likely to reduce the sugar stock further to around 7 million tonnes atend of Sugar Season 2022 although still higher than the normative carry forwardrequirement of around 5.5 million tonnes.

India's gross sugar production (before ethanol diversion) increased to38.3 million tonnes in Sugar Season 2022 (up to mid-May) up 5.8 million tonnes mainly dueto an increase in the production in Maharashtra and Karnataka.

However with a likely increase in sugar diversion towards ethanol to3.4 million tonnes (Sugar Season 2021: 2 million tonnes) the net sugar production islikely to come in at 35.5 million tonnes while consumption could continue to grow ataround 2 per cent increasing to 27.2 million tonnes in Sugar Season 2022.

Therefore while consumption is likely to grow at a modest rate of 1-2per cent the increase in cane diversion towards ethanol growth would result in anexportable surplus of 6-8 million tonnes in SS 23 (depending on cane output) hencemaintaining a healthy domestic balance.

The Government as part of Ethanol Blended Petrol Program has set atarget of 20% ethanol blending by 2025. As on May 2021 145.4 crore litres of Ethanol hasbeen supplied of which 77% is made from sugarcane juices. This bodes well for the sugarindustry in the long run. India has achieved a blending rate of more than 9% in thecurrent year. According to ICICI Securities Ethanol sales will contribute to 25-30% ofthe revenue of major sugar companies by FY 24.

Expansion of plant capacity:

SBEC Sugar has a total cane area of 26500 Hectare of land whichproduces approx. 238.50 Lac Qtl. Cane. The yield of sugarcane is going up year after year.Thus the yield of the company's cane area is going to be approx.. 265000 Ton. With 70%drawal the sugarcane availability for crushing is going to be 185500 Ton.

Currently the production facilities are designed for a daily sugarcanecrushing capacity of 8000 TCD (approx.). To take advantage of the increasing caneproduction the Company is considering augmenting its production capacity in due course to10000 TCD in two phases which will be completed within a period of three years. In thefirst phase it proposes to increase its capacity to 9000 TCD which will be operative fromseason 2022-23.

M/s. J.P. Mukherji & Associates Pvt. Ltd. Pune (JPMA) had beenassigned the job of preparing detailed technical report on capacity expansion andefficiency improvement. They have already submitted their detailed report and have nowbeen assigned the job of implementing the project.

ETHANOL PLANT

In the month of January 2022 India has crossed the mark of 9% ethanolblending with petrol. To achieve 20% blending by 2025 about 12 million litres of ethanolwould be required. The Sugar Industry will divert 6 million tonne of surplus sugar toproduce the 7 billion litres of ethanol needed for blending.

Considering the emphasis being laid by the Government on increasingEthanol production capacity to give impetus to its Ethanol Blending Policy with Petrol soas to save foreign exchange being spent on import of petrol to some extent the Companyis taking steps for setting up a 100 KLPD Ethanol Plant within its complex in VillageLoyan Malakpur (Baraut). The Company has already received the license to set-up theethanol plant up to the capacity of 100 KLPD. The Company has also filed application forinterest subvention on loan for an amount of Rs. 97.88 crores to the Ministry of ConsumerAffairs F & D Department of Food & Public Distribution for its in principleapproval. The approval is awaited.

The Company has also made an application for loan of Rs. 130.50 crorewith U.P. Co-operative Bank Ltd. Lucknow.

COVID-19 PANDEMIC

The manufacturing activities of the company were carried out in normalcourse with the adoption of enhanced safety security and other required measures. Therehas been no material impact on the business of the company though the sale and movement offinished products was affected due to continuous restrictions imposed by the Govt. ofIndia to curve the spread of COVID-19.

DIVIDEND & RESERVES

As the Company has incurred loss during the year under review yourBoard has not recommended any dividend for the financial year ended March 31 2022.

SHARE CAPITAL

The paid up equity capital as on March 31 2022 was Rs.4765.38 Lacs.During the year under review the Company has not issued any shares or any other security.

MATERIAL CHANGES AND COMMITMENTS

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

SUBSIDIARY COMPANIES

As on March 31st 2022 the Company has one Wholly Owned Subsidiary i.e.SBEC Stockholding & Investments Limited and one Subsidiary i.e. SBEC BioenergyLimited. There are no associate companies within the meaning of Section 2(6) of theCompanies Act 2013 ("Act"). There has been no material change in the nature ofthe business of the subsidiaries.

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

In accordance with the provisions of Section 136(1) of the CompaniesAct 2013 the Annual Report of the Company containing standalone and consolidatedfinancial statements has been placed on the website of the Company www.sbecsugar.com.Further the audited accounts of the Subsidiary Companies and the related detailedinformation have also been placed on the website of the Company www.sbecsugar.com. A copyof annual accounts of subsidiaries will be made available to shareholders seeking suchinformation at any point of time.

On the basis of Audited Financials Accounts of the Company for theFY.2021-22 the Company has two Material Subsidiary Companies i.e. SBEC Bioenergy Limitedand SBEC Stockholding & Investment Limited. The Minutes of the Board Meetings of thesubsidiary companies are placed at the Board Meetings of the Company. Details ofsignificant transactions and arrangements entered into by the subsidiary companies arenoted by the Board. The Audit Committee of the Company reviews the financial Statement ofthe subsidiary companies including investments made.

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

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of the Company for the financialyear 2021-22 are prepared in compliance with applicable provisions of the Companies Act2013 Indian Accounting Standard (ind AS) and SEBI (LODR) Regulations 2015.

DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act2013 and the Articles of Association of the Company Smt. Kumkum Modi (DIN 00522904)Director of the Company retires by rotation at the ensuing Annual General Meeting and Sheis eligible for re-appointment.

The office of Shri Shyam Babu Vyas & Shri Rohit Garg IndependentDirectors of the Company has become vacant w.e.f. July 20 2022 pursuant to Section167(1)(b) of the Companies Act 2013 as they absented themselves from all the meetings ofBoard of Directors held during a period of twelve months. Particulars of Directors seekingappointment/re-appointment have been given in the explanatory statement annexed to thenotice for the Annual General Meeting.

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

CHAIRMAN & KEY MANAGERIAL PERSONNEL (KMP)

During the financial period ended 31.03.2022 details of Chairman &Whole Time Key Managerial personnel (KMP) of the Company are as follows:

BOARD MEETINGS

The Board met five times during the financial year 2021-22 the detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and the SEBI(LODR) Regulations 2015.

FORMAL ANNUAL EVALUATION

Pursuant to the requirements of Section 134(3)(p) of the Companies Act2013 read with Regulation 17 of the SEBI (Listing Obligations and DisclosureRequirements) 2015 the Board has carried out a performance evaluation of itself itsCommittees the Chairman and each of the other Directors.

A structured questionnaire was prepared after taking into considerationthe inputs received from the Directors covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board cultureexecution and performance of specific duties obligation and governance.

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

At the conclusion of the evaluation exercise the Members of the Boardassessed that the Board as a whole together with each of its committees was workingeffectively towards performance of its key functions.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the provisions contained in Section 134 (5) of theCompanies Act 2013 your Directors to the best of their knowledge and belief andaccording to information and explanations obtained from the management confirm that:

a) in the preparation of the annual accounts for the financial yearended March 31 2022 the applicable accounting standards have been followed and there areno material departures from the same;

b) the Board of Directors have selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2022 and of the statement of profit and loss of the Company for the year endedon that date;

c) the Board of Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

d) The Directors have prepared the Annual Accounts on a going concernbasis.

e) The Directors have laid down proper internal financial controls tobe followed by the Company and such controls are adequate and operating effectively; and

f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

DECLARATION FROM INDEPENDENT DIRECTORS

All Independent Directors of the Company have given declarations forthe financial year 2022-23 that they meet the criteria of Independence as laid down underSection 149(6) of the Companies Act 2013 and SEBI (LODR) Regulations 2015.

INTERNAL FINANCIAL CONTROLS

Your company has in place an adequate internal control system in orderto ensure that all transactions are authorized recorded and reported correctly and thatall assets are protected against the perils of unauthorized use or disposition. Towardsenhancing the efficiency of internal controls services of consultants are hired wherevernecessary and their suggestions are reviewed and implemented. Your Company has in placean Internal Audit system whereby an independent professional firm of Internal Auditorsconducts regular audit across the Company and their scope and findings are reviewed by theManagement and Audit Committee on a regular basis.

The Audit Committee of the board also meets periodically to review theinternal controls internal audit findings action taken reports and to advise themanagement on corrective policies if any.

AUDITORS AND AUDITORS' REPORT Statutory Auditors

M/s. K. K. Jain & Co. Chartered Accountants (FRN.02465N) wereappointed as Statutory Auditors of the Company for a term of 5 Years to hold office fromthe conclusion of 23rd Annual General Meeting (AGM) held on August 29 2017 and theirtenure will expire after the conclusion of the upcoming 28th Annual General Meeting.

The Board of Directors on the recommendation of the Audit Committee hasproposed the name of M/s. Doogar & Associates Chartered Accountants (FRN.000561N) asStatutory Auditors of the Company in place of M/s K. K. Jain & Co. CharteredAccountants (FRN.02465N) for a term of 5 Years and they hold office from the conclusion of28th Annual General Meeting (AGM) till the conclusion of the 33rd Annual General Meetingof the Company and the same is subject to the approval of shareholders in the ensuingAnnual General Meeting of the Company.

Accordingly the notice of ensuing Annual General Meeting includes theproposal for seeking shareholders' approval for the appointment of M/s. Doogar &Associates Chartered Accountants (FRN.000561N) as Statutory Auditors of the Company.

STATUTORY AUDITORS' REPORT

The Auditors' Report of M/s K.K. Jain & Co. Chartered Accountantscontains qualifications and the Company has given its comments on Auditor QualifiedOpinion for the Financial Year 2021-22. The details are mentioned here under:

Response to Qualified Opinion (i)

Under the power vested with the Cane Commissioner (U.P) for waiver ofinterest under U.P. Sugar Cane (Regulation of Supply and Purchase) Act 1953 in respect ofloss 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 Commissioner'sdecision no interest has been provided on the cane dues. The Company has decided toaccount for the same on actual payment basis.

Response to Qualified Opinion (ii)

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

Response to qualified opinion (iii)

The Company has valued closing stock at NRV of Rs. 3304.13 consideringthe current market price of around Rs. 3370.00 per quintal. The same is still lower thanthe Market price. Since the market price is much higher than NRV it has been thoughtexpedient to value Closing Stock at NRV.

COST AUDITORS

As per the requirement of the Central Government and pursuant toSection 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit)Rules 2014 as amended from time to time your Company's cost records are subject to CostAudit.

The Board of Directors on the recommendation of the Audit Committeehave appointed M/s. M.K. Singhal & Co. Cost Accountants as the Cost Auditors toaudit the cost accounting records maintained by the Company for the financial year 2022-23at a remuneration of Rs.100000/- plus taxes as applicable and reimbursement of out ofpocket expenses. As required under the Companies Act 2013 a resolution seeking member'sapproval of the remuneration payable to the Cost Auditor forms part of the noticeconvening the Annual General Meeting.

SECRETARIAL AUDITOR

The Board appointed M/s Soniya Gupta & Associates PracticingCompany Secretaries as the Secretarial Auditor to undertake the Secretarial Audit of theCompany for Financial Year 2021-22. The Report of the Secretarial Audit along with reportof Secretarial Audit of Subsidiary Companies are given in "Annexure-B" tothis Report.

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

FIXED DEPOSITS

During the financial year Company has not accepted any deposit frompublic within the meaning of section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposit) Rules 2014.

RISK MANAGEMENT POLICY

As per Section 134(3) (n) of the Companies Act 2013 the Company hasadopted a Risk Management Policy which is reviewed on a periodic basis in order torecognize and reduce exposure to risks wherever possible. The Company's risk managementpolicies are based on the philosophy of achieving substantial growth while mitigating andmanaging risks involved. Major risks identified are discussed at the meetings of the AuditCommittee and the Board of Directors of the Company.

AUDIT COMMITTEE

The Audit Committee comprises of four Independent Directors viz. Mr.Vijay K. Modi as Chairman Mr. J.C. Chawla Mr. Shyam Babu Vyas & Mr. N.P. Bansal asMembers. The details of terms of reference of the Audit Committee number and dates ofmeeting held attendance among others are given separately in the attached CorporateGovernance Report.

NOMINATION AND REMUNERATION COMMITTEE

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

REMUNERATION POLICY

The Company has adopted a Remuneration Policy for executive andnon-executive directors and persons who may be appointed in Senior Management and KeyManagerial positions and to determine their remuneration as approved by the Board ofDirectors on the recommendation of Nomination and Remuneration Committee. The remunerationso approved is subject to the approval by the shareholders and such other authorities asthe case may be. The Non-Executive Directors do not draw any remuneration from the Companyexcept sitting fee paid to them for each meeting of the Board/ Committee thereof attendedby them. The aforesaid policy can be accessed on the Company's website www.sbecsugar.com

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Pursuant to the provisions of the Section 135 of the Companies Act2013 (the Act) the CSR provisions are not applicable as per immediately precedingfinancials year of the Company. The CSR Committee constituted by the Board of Directorshas been dissolved w.e.f. 9th August 2018.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

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

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197(12) of the Companies Act2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and forming part of the Board's Report for the year ended March 31 2022 are given in"Annexure —D" to this Report.

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS

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

RELATED PARTY TRANSACTIONS

The transactions entered with related parties during the year underreview were on Arm's Length basis and in the ordinary course of business and complied theprovisions of Section 188 of the Companies Act 2013. All related party transactions wereapproved by the Audit Committee and the Board. The relevant information regarding relatedparty transactions has been set out in Note No. 30 of the Financial Statements forthe financial year ended 31.3.2022.

However there was a transaction between the Company and SBEC BioenergyLimited which was on arm's length basis but the same was a material transaction. All therelevant details of the said transaction have been given in AOC-2 which is enclosed as "AnnexureE" and forms part of this directors' report.

The Board has framed a Policy on related party transactions and placedthe same on the Company's website at www.sbecsugar.com.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has formulated and implemented the Whistle Blower Policy/Vigil Mechanism. This has provided a mechanism for directors and employees of the Companyand other persons dealing with the Company to report to the Chairman of the AuditCommittee; any instance of unethical behaviour actual or suspected fraud or violation ofthe Company's code of conduct. The aforesaid policy has also been uploaded on theCompany's website at www.sbecsugar.com.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION ANDREDRESSAL) ACT. 2013.

During the year from April 1 2021 to March 31 2022 the Company hasnot received any complaint under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. At the end of March 31 2022 no complaint waspending for redressal.

ANNUAL RETURN

As per Companies Act 2013 the Annual Return of the Company for theyear will be available on the website of the Company at http://sbecsugar.com/

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by TheInstitute of Company Secretaries of India and approved by the Central Government asrequired under Section 118(10) of the Companies Act 2013.

LISTING OF SECURITIES

The equity shares of your Company are listed on the BSE Limited and theCalcutta Stock Exchange Association Limited. The Company's application for delisting ofshares with The Calcutta Stock Exchange Association Limited is still pending.

BOARD DIVERSITY

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

CORPORATE GOVERNANCE

In Compliance with Regulation 17 to 27 of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 a detailed Corporate Governance Report hasbeen given elsewhere in this report along with Management Discussion and Analysis Reportwhich form an integral part of the Annual Report. A certificate from Soniya Gupta &Associates a firm of Company Secretaries in practice confirming compliance by the Companywith the conditions of Corporate Governance as stipulated under part E of schedule V ofSEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 is attached tothis report.

The Whole Time Director and the Chief Financial Officer have submitteda certificate to the Board regarding the financial statements and other matters asrequired under SEBI (LODR) Regulations 2015.

PERSONNEL RELATIONS

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

APPRECIATION

Your directors thank the various Central and State GovernmentAuthorities and Agencies for the continued help and cooperation extended by them. TheDirectors gratefully acknowledge all stakeholders of the Company viz. farmers customersmembers dealers vendors and banks for their excellent support during the year. TheDirectors also place on record their sincere appreciation to all employees of the Companyfor their unstinted commitment and continued cooperation to the Company.