To the Members

The Board of Directors of the Company presents its Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2025.

*Figures are reclassified to make them comparable with current year's figures

Due to the changes in rainfall pattern and adverse weather conditions, there has been reduction in sugarcane supply to the Company. Hence the overall operational performance of the Company for the financial year under review was lower than that of the previous financial year. There was reduction in the level of crushing in Sakthinagar, Modakurichi and Sivaganga Units during the financial year as compared to previous year. The recovery percentage was also slightly less. Consequent to reduction in the level of crushing, the operations of other Divisions like distillery and power were also affected. However the selling price of sugar, industrial alcohol and power was better during the financial year as compared to the previous year. There is no change in the nature of business during the financial year and until the date of this report.

The quantum of sugarcane crushed at various units of the Company during the financial year 2024-25 is as under:

During the year under review, 1.24 lakh MT of sugar was produced by the Company as compared to 1.95 lakh MT in the previous year. Although there is improvement in the selling price of sugar, the revenue of sugar division has come down during the year under review as compared to the previous financial year.

During the year under review, 245.43 lakh litres (previous year 296.54 lakh litres) of industrial alcohol was produced at Sakthinagar Distillery Unit.

The total power generated in the co-generation plants during the financial year was 2064.31 lakh units (previous year 2470.85 lakh units) out of which 1257 lakh units (previous year 1476.03 lakh units) of power was exported. The Company is selling the power through Indian Energy Exchange (IEX) as well as directly to third parties.

As the rainfall and climatic conditions are favorable during the current season, the area registered for cane cultivation has increased and hence the Company looks forward to a higher volume of cane crush with improved sugar recovery percentage during the financial year 2025-26.

The Company has not accepted any deposit during the financial year under review. At the end of the financial year, there was no unclaimed deposit.

At the request of the Company, the Sugar Development Fund (SDF) has approved the One Time Settlement with respect to Modakurichi (Co-generation) unit and the same has been fully repaid. The Company has made application for restructuring the SDF loan availed for Sivaganga (Co-generation) unit and it is under consideration of the Central Government.

Dr.M.Manickam (DIN 00102233) retires by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

As mentioned in the last Annual Report, Sri P.K.Chandran, Sri S.S.Muthuvelappan, Sri N.K.Vijayan, Sri C.Rangamani, Sri K.v.Ramachandran, Sri S.Chandrasekhar and Sri S.Balasubramanian, Independent Directors, retired on 29th September 2024 on completion of their second term of office as Independent Directors.

The term of office of Smt.Priya Bhansali will expire on 30th September 2025 on completion of the second term of her appointment for five consecutive years from 1st October 2020. She is not eligible for reappointment as Independent Director in view of the restrictions contained in Section 149(11) of the Companies Act, 2013.

The Board at its meeting held on 13th August 2025 has appointed Smt.Susheela Balakrishnan as Additional Director and as Independent Director, subject to the approval of the members at the ensuing Annual General meeting of the Company.

In pursuance of Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments 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 the end of the financial year and of the profit of the Company for that financial year;

(c) the Directors had 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;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Board met seven times during the financial year ended 31st March 2025. The details of the Board Meetings and the attendance of the Directors are given in the Corporate Governance Report.

The Audit Committee was reconstituted on 14.8.2024 and 27.9.2024. At present the Audit Committee comprises of the following Directors as its members:

1. Dr.A.Selvakumar, Chairman

2. Smt. Priya Bhansali

3. Sri v.K.Swaminathan and

4. Sri M.Balasubramaniam

Details regarding meetings of the Audit Committee and the attendance of the members are given in the Corporate Governance Report.

Pursuant to the provisions contained in the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a formal annual evaluation of the performance of the Board, its committees and of individual Directors has been made. The manner in which the evaluation was carried out and the process adopted are given in the Corporate Governance Report.

Details of ratio of remuneration to each Director to the median employee's remuneration and other disclosures required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-A.

The Company has constituted a Risk Management Committee and the details of the Committee are set out in the Corporate Governance Report. Pursuant to Regulation 17(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has laid down risk management policy to identify, evaluate and mitigate risks. It seeks to ensure transparency and to minimise adverse impact on the business operations of the Company.

The Company does not have any exposure to commodity risk except to the extent of its own production of sugar, the main product of manufacture of the Company, the selling price of which is subject to market fluctuations.

The Company has internal control system commensurate with the size of the Company. Adequate procedures are set out for detecting and preventing frauds and for protecting the Company's assets. The head of Internal Audit Team reports to the Chairman of the Audit Committee for the purpose of maintaining independence and Internal Audit Reports are placed before the Audit Committee together with statement of significant audit observation and the suggested corrective action followed by a report on action taken thereon. Further the Company has adequate internal financial controls with respect to the financial statements.

The Company has a whistle blower policy and a vigil mechanism for Directors and employees to report genuine concerns in the prescribed manner. The vigil mechanism provides adequate safeguards against victimization and for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The details of the whistle blower policy are posted on the website of the Company. No complaint has been received under this mechanism during the year under review.

A Report on Corporate Governance along with Auditors Certificate with respect to its compliance forms part of this Report.

A detailed Management Discussion and Analysis Report also forms part of this Report.

i. Annual Return

A copy of the Annual Return for the financial year 2023-24 is placed on the website of the Company www.sakthisugars.com.

ii. Changes in Share Capital

There is no change in the share capital during the financial year under review.

iii. Policy on Directors Appointment and Remuneration

The Company's policy for selection and appointment of directors, senior management personnel and fixation of their remuneration, including criteria for determining qualifications, positive attributes, independence of a director, are available in the Company's website www.sakthisugars.com and the salient features of the Policy are given in Annexure-B.

iv. All the related party transactions were on arm's length basis. Prior approval of the Audit Committee and/or the Board, as the case may be, has been obtained for the transactions with related parties. A statement of all related party transactions is placed before the Audit Committee on quarterly basis.

The related party transaction with respect to Security provided by the Company in favour of Kotak Mahindra Bank Limited to secure the loans aggregating to Rs.340 crores availed by Sakthi Auto Component Limited has been approved by the Members at the Annual General Meeting held on 19.09.2024. Particulars of the material contract / arrangement in Form AOC - 2 as required under Section 134(3)(h) of the Companies Act, 2013 are given in Annexure-C.

The Related Party Transactions Policy as approved by the Board is available on the Company's website www.sakthisugars. com. The details of the transactions with Related Parties are provided in the accompanying financial statements.

v. Statement of declarations given by Independent Directors

The Independent Directors have given their declarations to the Board to the effect that they meet with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the relevant rules. They have also given a declaration confirming compliance with Rule 6(1) and (2) of the Companies (Appointment and Qualification of Directors) Rules 2014 regarding inclusion of their names in the databank maintained by Indian Institute of Corporate Affairs.

vi. Significant material orders passed by court or authorities

There are no significant orders passed by Court or regulatory authorities which would impact the status of the Company and its future operations.

vii. Particulars of loans, guarantees or investments

During the financial year 2024-25, the Company has given a security by way of equitable mortgage of the immovable property of the Company at St.Mary's Road, Chennai 600 018 in favour of Kotak Mahindra Bank Limited to secure the loans aggregating to Rs.340 crores availed by Sakthi Auto Component Limited, a related party in which some of the directors are interested.

The Company has not given any loan or made any investment during the said financial year.

viii. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and out go as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-D.

ix. There are no material changes affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

x. The Company has complied with the Secretarial Standards as may be applicable to the Company.

The members have appointed M/s.P.N.Raghavendra Rao & Co., Chartered Accountants, as Statutory Auditors for a term of office of five consecutive years from the conclusion of the 60th Annual General Meeting held on 24th August, 2022 till the conclusion of the 65th Annual General Meeting of the Company. The said Audit Firm has confirmed that they are not disqualified for continuing as Statutory Auditors of the Company for the financial year 2025-26.

Pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of SEBI (LODR) Regulations 2015, the Board of Directors of the Company has appointed M/s.Sriram Krishnamurthy & Co, (formerly known as M/s.S.Krishnamurthy & Co.), Company Secretaries, Chennai, as Secretarial Auditors to undertake the secretarial audit of the Company for the year ended 31st March 2025. Secretarial Audit Report of M/s. Sriram Krishnamurthy & Co., Company Secretaries, Chennai for the year ended 31st March 2025 is annexed as Annexure-E. As the Company does not have any subsidiary, the question of appointment of Secretarial Auditor for material subsidiary does not arise.

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has recommended appointment of Sri R. Dhanasekaran, Practicing Company Secretary, Coimbatore, as Secretarial Auditor of the Company for a term of five consecutive financial years from 2025-26 till 2029-30 for approval by the Members at the ensuing Annual General Meeting. Necessary resolution is included in the Notice of the 63rd Annual General Meeting.

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. M/s. STR & Associates, Cost & Management Accountants, Tiruchirapalli, are the Cost Auditors appointed for auditing the cost accounting records relating to Sugar, Distillery and Power Divisions of the Company for the year ended 31st March 2025.

The said Firm has been appointed for the financial year ending 31st March 2026 and necessary resolution for ratification of their remuneration is included in the Notice for the ensuing Annual General Meeting.

The Company has constituted a CSR Committee and has adopted a CSR Policy and the same is available in the Company's website www.sakthisugars.com. The composition of the CSR Committee is given in the Corporate Governance Report. As the Company has incurred loss for the three immediately preceding financial years, the requirement of incurring expenditure towards fulfilment of its corporate social responsibility does not arise during the financial year under review.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the said Act. An Internal Complaints Committee (ICC) has been set up at every work place of business to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

As per the provisions of the said Act, the Report in details of the number of cases filed under Sexual Harassment and their disposal of the financial year under review, is as under:

The Company is in compliance with the provisions of the Maternity Benefit Act, 1961 and the Maternity Benefit (Amendment) Act, 2017. Necessary benefits including paid maternity leave, nursing breaks have committed to supporting the health, safety, and wellbeing of its women employees.

In line with the Maternity Benefit (Amendment) Act, 2017, the Company has put in place to support women employees returning to work post maternity leave and encourages a supportive work environment for working mothers.

With reference to the Statutory Auditors' remark, your Directors wish to state that the Company is confident of obtaining favourable award and considers the full amount as recoverable. The Statement of impact on Audit Qualification is attached as Annexure-F.

Your Directors wish to place on record their appreciation of the valuable assistance and co-operation extended by the shareholders, cane growers, banks, financial institutions and Government authorities. They also wish to appreciate the dedicated services rendered by officers, staff and workers of the Company.