Godavari Biorefineries Ltd

Dear Shareholders,

The world entered further uncertainty with the conflict in the Middle East. This only adds 'fuel' to the continuing war in Europe which continues to affect millions of lives and livelihoods. We do hope that good sense prevails and that the world finds peace and returns to normal.

Climate Change is a reality. The world continues to rely on fossil resources to meet its needs of energy and materials. If we are to successfully combat climate change, the world will have to start reducing its dependence on fossil resources and undertake a 'green transition' by increasing reliance on renewable resources.

This imperative is now being recognized by the whole world. The world is looking at renewable and sustainable ways of making products to combat climate change. Governments, Corporations and consumers are showing this direction by implementing regulations, making boardroom commitments and making individual choices that now are hastening the process to a lower carbon economy and a path to net zero.

Mission Innovation, an initiative of 23 countries and the European Commission, has been formed under which there is a special focus on the Integrated Biorefineries. This sub group is led by India and the Netherlands . We were invited to present our case to members of the Dutch Government.

In this transition, access to biomass is important. Our history of many decades of procuring sugarcane provides us access to biomass. Our research scientists and engineers provide us with the knowledge to transform the biomass to foods, energy and biochemicals. Our access to customers globally allows us to partner with them to make specialty bio-based chemicals to help this green transition.

In pursuit of our objectives, our chemical division has been working on a strategy to make ethanol and bagasse based chemicals to achieve this transition. In this process we are developing products ourselves to make this vision a reality.

Chemicals

Godavari Biorefineries has been a pioneer in the use of Sustainable and Renewable Resources to produce bio-based chemicals. Bio-based chemicals are a large portion of our product mix about one third of our business and are a growth opportunity. We have identified new specialty chemicals to make and/or expand. Our strategy is to add value to our feedstock, and its related biomass. To convert biomass into value added products, chemically, physically or biologically.

As a result of our efforts, we continue to make a diversified product mix. The chart below shows the distribution of our business by product in 2024. The ethanol and chemical business now comprise more than 65% of the business and are both sectors that are posed for growth.

We continue to make more value added chemicals from renewable resources. Customers have expressed renewed and strong interest in sourcing products that are renewable, sustainable, and adhering to the 'green chemistry' principles. Customers globally are demanding more sustainable and renewable products with a lower carbon footprint. In turn, companies are taking a fresh look at their supply chains to adapt to this new reality and mitigate climate change. Our close cooperation with many of the large companies to develop and produce products for them is helping us sustain and grow our pipeline for new products.

This past year, I am pleased to say that the company inaugurated a new specialty chemical plant to make some of the chemicals described above. This specialty chemical plant was inaugurated by Padma Vibhushan Shri Prof. M. M. Sharma. He complimented the company for its strategy of developing and manufacturing Specialty chemicals from renewable resources. The Consul General of The Netherlands was also present to grace the occasion. This new chemical facility will help us to continue on in our journey of creating a world class cascading biorefinery and make chemicals that these customers need.

Sugar and Ethanol

The Government of India has achieved 15% blending of ethanol under the Ethanol Blending Programme. The Government of India is strongly encouraging and monitoring the programme to have 20% blending. This policy meets three goals:

1.It supplements energy security.

2. Addresses climate change

3. Ensures stability in farmer incomes

In view of El Nino and an anticipated lower crop of sugar, the Government temporarily stopped the diversion of sugarcane juice/syrup to make ethanol (although production of ethanol from B and C molasses continued). However, the sugar production was better than expected and India has comfortablesugar stocks. In view of La Nina and a consequent better monsoon, the Government is likely to restore the ethanol blending programme from sugarcane juice.

We have successfully commissioned the expansion in crushing capacity at Sameerwadi from 15,000 tcd to more than 18,000 tcd. We also completed our expansion of our rectified spirits facility to 600,000 lpd. We diverted over 27% of our sugar in cane to ethanol.

Making More Ethanol

Since we want to increase the capacity utilisation of the ethanol facility, we had applied for and received permission to make 200,000 lpd of ethanol from grain, maize etc. This will help diversify risk by having an alternative feedstock especially since the farmers around our mill also grow maize.

We have also received environment clearance to expand our capacity to one million litres of rectified spirits and crush 25,000 tons of sugarcane per day.

2G Ethanol, Bio-CNG, and Potash

We have always spoken about a bolt-on model for 2G ethanol. We have done much research on the same. We had applied to the Government of India under the Prime Minister's JI-VAN Yojana for a grant to demonstrate the same. I am pleased to say that we have been awarded the grant. Once we start valorising bagasse, we can in phases make speciality chemicals from the same.

The Government is also promoting the use of press mud to make Bio CNG in its effort to be more 3fftcrivf*fj . We are also exploring this opportunity.

Potash: Your Company plans to implement the production of SOP (Sulphate of Potash) which is a valuable fertiliser to the farmer as it improves the quality and crop yields. SOP is considered a premium- quality potash that makes plants more resilient to drought, frost, insects and even disease. We have been able to extract potash from the waste of the incinerator boiler. A successful commissioning of the same will result in a circular economy in Potash. Farm, process, extract, recycle and so on.

Foods

Jivana

Our Jivana brand is doing well, with the business under the brand having quadrupled over the past three years. Recently, we launched two new products - Mirchi and Dhaniya.

Drug Discovery

Oncology

We have received approval dated November 20, 2023, from CDSCO (through M/s Clinexel Life Sciences Private Limited) to undertake clinical trials on the next cohort as part of the ‘healthy adult volunteers' study. We have accordingly in 2023 initiated phase one of our clinical trials on patients with advanced solid tumors and also initiated trials in relation to the ‘healthy adult volunteers' study. We have received a grant in February 2024 from the Biotechnology Industry Research Assistance Council ("BIRAC") in this regard.

Awards and Recognition

I am delighted to say that your company has been awarded the major following awards:

Best Technical Efficiency Award - S Nijalingappa Sugar Institute (SNSI)

For the Crushing Season 2023 - Awarded by Hon'ble minister Shri Shivanand Patil, Dr.Richard Vincent D'souza - C&I Secretary, Shri. Ravikumar - Cane Commissioner Bengaluru and Dr. Khandgave - Director SNSI Belgaum.

Indian Federation of Green Energy

Our Company received the "4th India Green Energy Award" in the category of "Bioenergy Outstanding Chemical Process Based Project-Ethanol" Award was given by Shri Nitin Gadkari Union Cabinet Minister of Road Transport and Highways.

Director of Factories - Government of Karnataka

'Best Safety Award in the Sugar Factory Category (2023-24)' for all Karnataka. There are more than 70 sugar mills in Karnataka and I am pleased that our company has won this award.

South Indian Sugar Technologists Association:

Based on our inputs provided to SISSTA regarding our cane development activities undertaken, we have been informed that we will be awarded with the Silver award for the "Best Distillery (2023-24)" for Karnataka on the 19th of August, 2024

Sugar and Ethanol International Awards 2024

Philanthropist of the Sugar Industry Award - Awarded to me personally.

I am pleased to inform you that I was invited to speak at:

1. In March 2024, The Dubai Conference - I spoke at the The Leaders Form - Seizing the Moment: Towards a Manifesto for Action

2. In July 2024, At the 64th ISO Conference India 2024 held in New Delhi, I was invited to speak on 'Sustainability through Diversification'.

3. In July 2024, Representatives of the Dutch Government from Agriculture, Economics and The Environment invited me for a discussion on 'Sustainable Value Chains'.

Soil Health, the Farm, and the Farmer

We continue to work closely with the farmer. We are inextricably linked together. Our aim is to see that the farmer and the farm are healthy. To do this, we continue to work on introducing drip irrigation, intercropping, soil testing, subsequent supply of quality inputs, supply of tissue culture plantlets, and agronomic practices for achieving high yield. We collaborate with KIAAR, K J Somaiya Institute of Applied Agriculture Research, to demonstrate new techniques that would improve productivity, optimise resource use, and maintain soil fertility. Our experiments on using older and traditional techniques and modern science with KIAAR have shown good results.

Soil health has been deteriorating the world over. We have started a major effort in collaboration with Somaiya Vidyavihar University, KIAAR and Michigan State University to work on improving soil health and soil carbon in our area of operation.

IPO

We have also filed the Draft Red Herring Prospectus for raising equity and doing a public listing. Conclusion

In closing, these are tough times. There is much geopolitical uncertainty in the world. Climate change is forcing companies to change and alter their purchasing habits and their carbon footprint. In India the Government is continuing to create a welcoming environment for renewable energy. We are working to continue to transition and grow our business in these interesting times.