Directors Report of Davangere Sugar Company Ltd.

Mar 31, 2025

Your Directors'' present the 54th Annual Report of the Company highlighting the business and
operations of the Company and the Audited Financial Statements for the Financial Year ended 31st
March, 2025.

Results of our operations and State of Affairs

The highlights of the standalone financial results are as under:

Particulars	FY 2024-25	IFY 2023-24
Total Income	21,675.60	22296.72
Profit/(loss)before financial expenses, depreciation and amortisation Exceptional items	5375.15	5176.50
Financial expenses	2,819.35	2535.27
Depreciation	1269.90	1195.99
Profit/(loss)before provision for tax and exceptional items	1285.90	1445.24
Exceptional Items-Income	-	-
Provision for taxation:
-Current Tax	224.67	252.48
-Deferred Tax/(Income)	(32.48)	(30.97)
Net Profit/(Loss)	1093.71	1223.72

Operating Highlights

The Company''s financial performance for the year ended March 31, 2025 is summarized below:

The Company achieved total income of ^ 21,675.60 Lacs for the year ended 31st March 2025 as
against ^ 22296.72 Lacs for the previous year. The EBITDA for the year under review stood at ^ 5375.15
Lacs as compared to ^ 5176.50 Lacs for the previous year, while the Net Profit stood at ^ 1093.71 Lacs
as compared to ^ 1223.72 Lacs for the previous year. Analysis of operating performance is covered
under Management Discussion and Analysis which forms part of this Report.

Change in Business of the Company

There were no changes in the nature of business of the Company during the year under review.
Transfer to Reserves

During the year under review, for the Financial Year 2024-25, your Company does not propose
transferring any amount to General Reserve.

Dividend

To retain the profits for future growth of the Company, Your Directors do not recommend any
dividend for the year ending on 31^st March, 2025.

Share Capital

A) AUTHORISED SHARE CAPITAL:

During the year under review, the Authorised Share Capital of the Company was increased from ^100
Crores (divided into 10 Crores equity shares of ^10/- each) to ^ 150 Crores (divided into 150 Crores
equity shares of ^ 1/- each).

Accordingly, the Authorised Share Capital of the Company now stands at ^ 15,000 Lacs, divided into
150 Crores Equity Shares of ^ 1/- each.

B) ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL:

During the year under review, there was a change in the paid-up share capital of the Company
pursuant to the sub-division (stock split) of equity shares.

The face value of each equity share was sub-divided from ^ 10/- per share to ^ 1/- per share,
resulting in an increase in the number of equity shares while keeping the total paid-up capital
unchanged.

Accordingly, the paid-up share capital of the Company was revised from 9,40,84,462 equity shares
of ^10/- each, aggregating to ^94,08,44,620, to 94,08,44,620 equity shares of ^1/- each,
aggregating to ^94,08,44,620, pursuant to the sub-division of equity shares.

There was no change in the total paid-up capital amount due to the sub-division.

C) ISSUE OF BONUS SHARES:

During the year under review , there was no Bonus issue of equity shares.

D) BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

E) ISSUE OF SHARES WITH DIFFERENTIAL VOTING RIGHTS, SWEAT EQUITY SHARES AND
EMPLOYEES STOCK OPTIONS:

During the financial year under review the company has not issued any shares with differential
voting rights nor granted stock option, nor Sweat Equity.

F) PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR
BY TRUSTEES FOR THE BENEFIT OF EMPLOYEES: N.A.

G) RIGHT ISSUE OF SHARES

There was no right issue of shares during the year.

Significant and Material Orders passed by the Regulators or Courts or Tribunals

There are no significant, material orders passed by the regulators or Courts or Tribunals, which would
impact the going concern status of the company and its future operations.

Subsidiaries, Joint Ventures or Associate Companies

The company does not have any subsidiaries, joint ventures or Associate Company.

Accounts, Auditors and Audit Report
Statutory Auditor

M/s. DGMS & Co., Chartered Accountants (Firm Registration No. 0112187W) were appointed as
Statutory Auditors of the Company at the 50th Annual General Meeting (AGM) held on 29^th
September 2021, for a term of 5 years to hold office from the conclusion of the 50^th AGM till the
conclusion of 55^th AGM.

Accounts:

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not
call for any further comments. There are no qualifications or observations made by the Statutory
Auditor in the said report. During, FY 2024-25, the Statutory Auditors had not reported any matter
under Section 143(12) of the Act and therefore, no detail is required to be disclosed under Section
134(3) of the Act.

Auditors'' Report:

The Audit Reports dated 14^th May, 2025 issued by M/s. DGMS & Co, Chartered Accountants, and
Statutory Auditors on the company''s standalone financial statements for the financial year ended
2024-25 is a part of Annual Report.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, the Board had appointed M/s. Mehta & Mehta,
Practicing Company Secretaries, (COP No. 11226), to conduct a Secretarial Audit for the financial year
2024-25. The Secretarial Audit Report for the financial year ended 31^st March 2025 is annexed
herewith at Annexure I to this Report. There are no qualifications or observations made by the
Secretarial Auditor in the said report. During FY 2024-25, the Secretarial Auditors had not reported
any matter under Section 143(12) of the Act.

Further as per the SEBI (LODR) (3rd Amendment) Regulations, 2024, the Board of Directors, at its
meeting held on 08^th September, 2025, based on the recommendation of the Audit Committee, has
approved the appointment of RVSP &Co., Practicing Company Secretaries, a peer-reviewed firm
Membership No F8759 COP: 13983, as the Secretarial Auditors of the Company for a term of five
consecutive financial years commencing from FY 2025-26 to FY 2029-30, subject to the approval of
the Members at the forthcoming Annual General Meeting.

Cost Auditors and Cost Records

Pursuant to the provisions of Section 148 of Companies Act, 2013 and rules made thereunder, The Board
of Directors, on the recommendation of the Audit Committee, has appointed Mr. Krishna Murthy,
Bangalore , Cost Accountants (Firm Regn. No. FCMA7658 ) as the Cost Auditor to audit the cost records
for the financial year ending 31^st March 2026 Remuneration payable to the Cost Auditor is subject to
approval by the members of the Company. Accordingly, a resolution seeking members'' approval for the
remuneration payable to Mr. Krishna Murthy Cost Accountants, forms part of Notice convening 54^th AGM
of the Company, along with relevant details of the proposed remuneration.

The Cost Accountants have confirmed that their appointment is within the limits of Section 141(3)(g) of
the Act and free from any disqualification specified under Section 141(3) and proviso to Section 148(3)
read with Section 141(4) of the Companies Act, 2013. In terms of Section 148 of the Act, read with Rule
8 of the Companies (Accounts) Rules, 2014, it is stated that the cost accounts and records are made and
maintained by the Company as specified by the Central Government under sub-section (1) of Section 148
of the Act.

Disclosure as per the Companies (Accounts) Amendment Rules, 2018:

The company has made and maintained its Cost accounts and records as specified by the Central
Government under sub-section (1) of section 148 of the Companies Act, 2013 and the Companies (Cost
Records and Audit) Rules, 2014.

Internal Auditors

The Company has appointed M/S B Gangadhara and Co., Chartered Accountant, Davangere,
(Membership No. 024094) as Internal Auditor of the Company, to conduct internal audit and to issue
report thereon from financial year 2025-26 to the financial year 2027-28 and to review internal
controls and operating systems and procedures as per the scope of the audit. The Internal Audit
Reports of the company are reviewed by the Audit Committee on a monthly basis. The Internal
Auditors send the quarterly audit observation to the company and the same were presented to the
Audit Committee, during the year.

Details of Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of
the Company, Smt. Swathi Shamanur (DIN: 10596097), Director of the Company, is liable to retire
by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re¬
appointment. The Board of Directors recommends her re-appointment at the forthcoming Annual
General Meeting. Brief Resume Smt. Swathi Shamanur, Director is circulated to the members as
part of this Annual report.

The Board of directors and KMP consists of:

Details of Board of directors

Sl. No.	Name of Directors	Designation	Relationship
1	Sri Shamanur Shivashankarappa Ganesh	Chairman cum Managing Director	-
2	Sri Abhijith Ganesh Shamanur	Non-Executive Director	Son of M.D.
3	Smt Swathi Shamanur	Non-Executive Director	Daughter-in¬ law of MD
4	Smt Hima Bindu Sagala	Independent Director	-
5	Sri Achal Kapoor	Independent Director	-
6	Smt Vinita Dilip Modak	Independent Director	-

Changes in the Board of Directors during the Financial Year 2024-25

Appointment of Mrs. Swathi Shamanur as an Additional Director with effect from 19^th April, 2024,
who was subsequently regularized as a Director at the Extra-Ordinary General Meeting held on 15^th
May, 2024.

Resignation of Mrs. Rekha Ganesh from the office of Director with effect from 4^th May, 2024.

Appointment of Mrs. Vinita Dilip Modak as an Additional Non-Executive Independent Director with
effect from 6^th September, 2024, who was regularized as an Independent Director at the Annual
General Meeting held on 30^th September, 2024.

Appointment of Mrs. Hima Bindu Sagala as an Additional Non-Executive Independent Director with
effect from 6^th September, 2024, who was regularized as an Independent Director at the Annual
General Meeting held on 30^th September, 2024.

Re-appointment of Mr. Shamanur Shivashankarapppa Ganesh as the Managing Director of the
Company for a further period of five years, effective from 24^th September, 2024 to 23^rd September,
2029, approved at the Annual General Meeting held on 30^th September, 2024.

Cessation of Mr. Tumbegere Rudrappa from the position of Independent Director with effect from
4^th October, 2024, upon completion of his tenure.

Resignation of Mrs. Veena Umpathy from the position of Independent Director with effect from 6^th
September, 2024, due to pre-occupation and other personal commitments.

Mr. Thappagondanahally Rajashekharappa ceased to be an Independent Director of the Company
with effect from June 16, 2025. Upon completion of his tenure.

Mr. Achal Kapoor has been appointed as an Additional Director (Non-Executive, Independent) of
the Company with effect from July 16, 2025, till the ensuing AGM. Subject to shareholders'' approval,
he shall further be appointed as an Independent Director.

The designation of Mr. Abhijith Ganesh Shamanur was changed to non-executive director with
effect from 30^th August 2024.

Details of KMPs:

Sr.No.	Name of the KMPs	Number of Board Meetings attended Designation
1	Sri Shamanur Shivashankarappa Ganesh	Managing Director
2	Mr. Parameshwarappa Onkarappa	Chief Financial Officer (CFO)
3	Ms. Uma Singh	Company Secretary and Compliance Officer (CO) appointed w.e.f 16th June, 2025.

* Ms. Nidhi Vaswani resigned from the position of Company Secretary and Compliance Officer with
effect from 20^th May, 2025. Subsequently, Miss Uma Singh was appointed as the Company Secretary
and Compliance Officer with effect from 16^th June, 2025.

Deposits

During the year under review, your Company has not accepted any deposits from public within the
meaning of Sections 73 and 74 of the Companies Act, 2013 (the “Act") and the Companies
(Acceptance of Deposits) Rules, 2014.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo Information as
per the Companies Act, 2013 and the rules framed there under relating to conservation of energy,
technology absorption, foreign exchange earnings and outgo forms part of this Report and is annexed
hereto as Annexure II.

Disclosures/Reporting:

Annual Return

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and
Administration) Rules 2014, the Annual Return of the Company for FY 2024-25 is available on the website
of the Company at https://davangeresugar.com/financials/.

Number of Meetings of Board

During the Financial Year 2024-25, Twelve (12) Board Meetings were conducted on 19^th April, 2024,
24^th May, 2024, 31^st May, 2024, 15^th July, 2024, 30^th August, 2024, 6^th September, 2024, 27^th
September, 2024, 15^th October, 2024, 9^th November, 2024, 14^th November, 2024, 18^th January, 2025
and 28^th March, 2025 .

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by
them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:

(a) that in the preparation of the annual accounts, the applicable accounting standards have been
followed along with no material departures;

(b) that the Directors have 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 affairs
of the Company as on 31^st March, 2025 and of the profit of the Company for the year ended on that date;

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.

(d) that the Directors have prepared the annual accounts on a ''going concern'' basis;

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

(f) that 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.

Committees of the Board

The Board has currently four Committees namely - Audit Committee, Stakeholders Relationship
Committee, Corporate Social Responsibility Committee, and Nomination and Remuneration Committee.
The terms of reference of the Board Committees are in compliance with the provisions of the Companies
Act, 2013, SEBI LODR Regulations, and are also reviewed by the Board from time to time. The role and
composition of these Committees, including the number of meetings held during the financial year and
the related attendance are provided in the subsequent paragraphs.

Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees given, securities provided and investments made are provided in the notes
to the financial statements. During the year under review, there were no loans, guarantee or investment
requiring the Compliance of Section 186(3) of the Companies Act, 2013.

Performance Evaluation

Pursuant to the provisions of the Act and Listing Regulations, the Board of Directors has undertaken an
evaluation of its own performance, the performance of its Committees, and of all the individual Directors
based on various parameters relating to roles, responsibilities, and obligations of the Board, effectiveness
of its functioning, the contribution of Directors at meetings and the functioning of its Committees. The
performance evaluation of the Chairman and Non-Independent Director was carried out by the
Independent Directors in their separate meeting. The Board of Directors expressed their satisfaction with
the evaluation process.

The meeting of Independent Directors of the Company was held on 14^th February, 2025, to discuss matters
as per the provisions of Companies Act, 2013 and the Listing Regulations. The Board hereby confirms that
the Company has received necessary declaration from each of the independent directors under Section
149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section
149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

The company has devised a policy naming (Nomination & Remuneration Policy) for performance
evaluation of Independent Directors, Board, Committees and other individual directors which includes the
criteria and process for the performance evaluation of the Executive/ Non-executive directors and
Committees and the Board as a whole. The policy is uploaded on the website of the company under
Investor section at https://davangeresugar.com/policies-and-codes/

Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior
Management of the Company

The Board has on the recommendation of the Nomination & Remuneration Committee, framed a
Nomination and Remuneration policy namely "Nomination & Remuneration Policy" in line with the
requirement of Section 178 of the Companies Act, 2013. The policy inter alia provides the procedure for
selection, appointment and remuneration of Directors and Key Managerial Personnel, including criteria
for determining qualifications, positive attributes, and independence of Directors.

Board Evaluation

Pursuant to the provisions of section 134(3)(p) the Companies Act, 2013, the Board of directors of the
company is committed to get its performance evaluated in order to identify its strength and areas in which

it may improve its functioning. In this regard, the Nomination and Remuneration Committee has
established the process for evaluation of the performance of Directors, including the Independent
Directors.

The company has devised a policy naming (Nomination & Remuneration Policy) for performance
evaluation of Independent Directors, Board, Committees and other individual directors which includes the
criteria and process for the performance evaluation of the Executive/ Non-executive directors and
Committees and board as a whole. The policy is uploaded on the website of the company under Investor
section at https://davangeresugar.com/policies-and-codes/.

During the year under review as per the policy for the performance evaluation, formal annual evaluation
of the performance of the Directors, including independent directors, the board and its committees was
made by the Nomination & Remuneration Committee in their respective meetings.

Contracts and Arrangements with Related Parties

All Contracts/arrangements entered by the Company during the financial year with related parties were
in the ordinary course of business and on an arm''s length basis. None of the transactions were material
in terms of section 188 of the Companies Act, 2013. The details of transactions with related parties are
given in notes to the financial statements. Details showing the disclosure of transactions with related
parties as required under IND AS-24 and 2A of Schedule V of SEBI Listing Regulations are set out in the
financial statements.

The Company''s Policy on Related Party Transactions may be accessed on the Company''s website at
https://davangeresugar.com/corporate-governance/

Risk Management Policy

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This
framework seeks to create transparency, minimize adverse impact on the business objectives and
enhance the Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels
including documentation and reporting.

Particulars of Employees

Disclosures with respect to the remuneration of Directors and employees as required under Section 197
of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are appended as Annexure III to this Report.

Risk Management & Internal Financial Controls

The Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to
recognize, assess and reduce exposure to risks wherever possible, identify steps to mitigate risks and to
identify risk owners for all types of risks. The Company''s Risk Management Policy is based on the
philosophy of achieving substantial growth while mitigating and managing risks involved.

The Company''s internal control systems with reference to the financial statements are adequate and
commensurate with the nature of its business and the size and complexity of its operations. Periodic
audits and checks are conducted and the controls to prevent, detect and correct any irregularities in the
operations have been laid down by the Company.

Application made or any proceeding pending under the insolvency and bankruptcy code:

As on the date of the Report no application is pending against the Company under Insolvency and
Bankruptcy Code, 2016 and the Company did not file any application under IBC during the F.Y. 2024¬
25.

Details of difference between valuation amount on one time settlement and valuation while
availing loan from banks and financial institutions:

During the year under review there has been no one-time settlement of loans taken from Banks and
Financial Institution.

Corporate Social Responsibility

Every company having net worth of Rs. 500 Crore (Rupees Five Hundred Crore) or more, or turnover of
Rs. 1,000 Crore (Rupees One Thousand Crore) or more or a net profit of Rs. 5 Crore (Rupees Five Crore) or
more during the immediately preceding financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more directors, out of which at least one director shall be
an independent director.

The Company has met this criterion for the Financial Year 2024-25 year also similarly as previous Financial
Year as the net profit of the company exceeds Rs. 5 Crore (Rupees Five Crore). Your Company is committed
to Corporate Social Responsibility (CSR) by catering to the needs of the weaker sections of the society.

The CSR Policy of the Company may be accessed on the Company''s website at
https://davangeresugar.com/policies-and-codes/. The report on the CSR activities is appended at
Annexure IV to the Board''s Report. The details relating to the composition, powers, roles, terms of
reference etc. of CSR Committee are given in detail in the Corporate Governance Report, which forms part
of this Annual Report.

Management Discussion and Analysis Report

Management discussion and Analysis Report for the year under review, as required under Regulation
34 read with Schedule V the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements), Regulations, 2015 (SEBI LODR 2015), is forming part of this Annual Report and the
same is marked as Annexure V.

CEO and CFO Certification:

In terms of Regulation 17(8) of the Listing Regulations, the CEO and CFO have certified to the Board of
Directors of the Company with regard to the financial statements and other matters specified in the said
regulation for the financial year 2024-25. The certificate received from the CEO and CFO is attached
herewith and the same is marked as Annexure VI.

Listing and Listing fees:

The Company affirms that the annual listing fees for the year 2024-25 to The Bombay Stock Exchange
Limited (BSE) and National Stock Exchange of India Limited (NSE) has been duly paid. As on date there are
no outstanding dues.

Vigil Mechanism and Whistle Blower Mechanism

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies
(Meetings of Board and its Powers) Rules, 2014, the company has established a vigil mechanism for

Directors and Employees to report their concerns about unethical behaviour, genuine concerns, actual or
suspected fraud or violation of the company''s Code of Conduct.

The mechanism provides adequate safeguards against victimization of Directors and employees who avail
the vigil mechanism. In exceptional cases, Directors and employees have direct access to the Chairman of
the Audit Committee. The detailed disclosure of the Vigil Mechanism & Whistle Blower Policy is available
at https://davangeresugar.com/policies-and-codes/ under Investor desk.

Company Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive
Information (UPSI)

The Board of Directors has code of practices and procedures for fair disclosure of unpublished price
sensitive information (UPSI) in accordance with the requirements of the SEBI (Prohibition of Insider
Trading) Regulation, 2015. Under this code the company lays down guidelines and procedures and
principles to be followed, and disclosures to be made while dealing with shares of the Company, as well
as the consequences of violation.

The policy has been formulated to regulate, monitor and ensure reporting of deals by Designated Persons
and connected persons to maintain the highest ethical standards of dealing in Company securities.

Pursuant to amendments in the Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015 vide the Securities and Exchange Board of India (Prohibition of Insider Trading)
(Amendment) Regulations, 2018, the Company adopted the new "Code of Practices and Procedures for
Fair Disclosure of Unpublished Price Sensitive Information"("Fair Disclosure Code") incorporating a policy
for determination of "Legitimate Purposes" as per Regulation 8 and Schedule A to the said regulations
w.e.f. 1^st April, 2019.

The Revised Insider Trading Code or Policy of the Company covering code of practices and procedures for
fair disclosure of unpublished price sensitive information (UPSI), is available on our website at
https://davangeresugar.com/policies-and-codes/.

Compliance with the Code of Conduct

The Board has formulated a code of Conduct for the Board Members and Senior Management of the
company, which has been posted on the website of the company. It is affirmed that all the directors and
senior management have complied with the code of conduct framed by the company and confirmation
from all the directors, KMP and senior management has been obtained in respect of the F.Y. 31^st March
2025.

Prevention of Sexual Harassment at Workplace

The Company has complied with the requirements relating to the constitution of the Internal Complaints
Committee (ICC) in accordance with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 ("the Act") and the Rules framed thereunder.

The details of complaints pertaining to sexual harassment during the financial year are as under:

a.	number of complaints of sexual harassment received in the year;	-
b.	number of complaints disposed off during the year; and	-
c.	number of cases pending for more than ninety days	-

Corporate Governance

Your Company is committed to good corporate governance aligned with the best corporate practices. In
compliance with Regulation 34 read with Schedule V of Listing Regulations, a detailed report on Corporate
Governance forms part of this Annual Report. A Certificate from the Practicing Company Secretary
confirming compliance of the conditions of Corporate Governance as stipulated under the Listing
Regulations is appended as Annexure VII to this Report.

Certificate of Non-Disqualification of Directors

Pursuant to Regulation 34(3) and Schedule V, Para C, Clause (10)(i) of SEBI (LODR) Regulations,2015,
Certificate of non-disqualification of Directors as on 31^st March, 2025 has been received from Practicing
Company Secretary and annexed as Annexure VIII of the Directors'' report.

Material Changes & Events after Balance Sheet Date

After the date of the Balance sheet there were following material changes in the Company,

a. During the year, the Company sub-divided the face value of its equity shares from ^10 to ^1 each.
Consequently, the number of shares increased from 9,40,84,462 to 94,08,44,620, while the
aggregate paid-up share capital remained unchanged at ^94,08,44,620.

b. During the year, the Company''s Authorised Share Capital was increased from ^100 Crores (10
Crore equity shares of ^10 each) to ^150 Crores (150 Crore equity shares of ^1 each). Accordingly,
the Authorised Share Capital now stands at ^15,000 Lakhs, divided into 150 Crore equity shares
of ^1 each.

Cautionary Statement:

The Board''s Report and Management Discussion & Analysis may contain certain statements describing
the Company''s objectives, expectations or forecasts that appear to be forward-looking within the
meaning of applicable securities laws and regulations while actual outcomes may differ materially from
what is expressed herein. The Company is not obliged to update any such forward-looking statements.
Some important factors that could influence the Company''s operations comprise economic
developments, pricing and demand and supply conditions in global and domestic markets, changes in
government regulations, tax laws, litigation and industrial relations.

Appreciation & Acknowledgements

The Board wishes to place on record its gratitude for the assistance and co-operation received from the
financial institutions, banks, government authorities, customers, vendors and farmers, cane growers and
finally to all its members for the trust and confidence reposed on the Company. The Board further wishes
to record its sincere appreciation for the significant contributions made by employees at all levels for their
competence, dedication and contribution towards the operations of the Company.

For and on behalf of the Board

For Davangere Sugar Company Limited

Sd/- Sd/-

Shamanur Shivashankarappa Ganesh Abhijith Ganesh Shamanur

(Managing Director) (Director)

DIN:00451383 DIN :03451918

Date: 08.09.2025
Place: Davangere

---

Mar 31, 2024

Your Directors'' present the 53rd Annual Report of the Company highlighting the business and operations of the Company and the Audited Financial Statements for the Financial Year ended 31st March, 2024.

Results of our operations and State of Affairs

The highlights of the standalone financial results are as under:

(In Lacs)

Particulars	FY 2023-24	FY 2022-23
Total Income Profit/(loss)before financial expenses, depreciation and amortisation Exceptional items	22296.72 5176.50	28058.43 5637.03
Financial expenses	2535.27	2712.54
Depreciation	1195.99	1156.49
Profit/(loss)before provision for tax and exceptional items	1445.24	1768.00
Exceptional Items-Income	-	-
Provision for taxation:
-Current Tax	252.48	330.68
-Deferred Tax/(Income)	(30.97)	115.78
Net Profit/(Loss)	1223.72	1321.55

Operating Highlights

The Company''s financial performance for the year ended March 31, 2024 is summarized below:

The Company achieved total income of INR 22296.72 Lacs for the year ended 31st March 2024 as against INR 28058.43 Lacs for the previous year. The EBITDA for the year under review stood at INR 5176.50 Lacs as compared to INR 5637.03 Lacs for the previous year, while the Net Profit stood at INR 1223.72 Lacs as compared to INR 1321.55 Lacs for the previous year. Analysis of operating performance is covered under Management Discussion and Analysis which forms part of this Report.

Change in Business of the Company

There were no changes in the nature of business of the Company during the year under review. However, in order to expand the business and monetize the subsidies laid down by the Government of India for the Sugar Industry, the Management commenced commissioning of Molasses based Ethanol unit in April 2021 at a total cost of Rs. 99.31 Crores. The commissioning of the plant is completed and the commercial production is started on 01^st June, 2022.

Transfer to Reserves

During the year under review, for the Financial Year 2023-24, your Company does not propose transferring any amount to General Reserve. The amount of INR 1223.72 Lacs is proposed to be retained as surplus in the Profit and Loss Account.

Dividend

To retain the profits for future growth of the Company, Your Directors do not recommend any dividend for the year ending of on 31st March, 2024.

Share Capital

A) AUTHORISED SHARE CAPITAL:

During the year under review, there was no change in the Authorized Share Capital of the Company. The Authorized Share Capital stands at INR 10,000 Lacs divided into 10 Crores Equity Shares of Rs. 10/- each.

B) ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL:

However, during the year under review, there was no change in the authorized or paid-up share capital of the Company.

C) ISSUE OF BONUS SHARES:

During the year under review, there was no Bonus issue of equity shares.

D) BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

E) ISSUE OF SHARES WITH DIFFERENTIAL VOTING RIGHTS, SWEAT EQUITY SHARES AND EMPLOYEES STOCK OPTIONS:

During the financial year under review the company has not issued any shares with differential voting rights nor granted stock option, nor Sweat Equity.

F) PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BY TRUSTEES FOR THE BENEFIT OF EMPLOYEES: N.A.

G) RIGHT ISSUE OF SHARES

There was no right issue of shares during the year.

Significant and Material Orders passed by the Regulators or Courts or Tribunals

There are no significant, material orders passed by the regulators or Courts or Tribunals, which would impact the going concern status of the company and its future operations.

Subsidiaries, Joint Ventures or Associate Companies

The company does not have any subsidiaries, joint ventures or Associate Company.

Accounts, Auditors and Audit Report Statutory Auditor

M/s. DGMS & Co., Chartered Accountants (Firm Registration No. 0112187W) were appointed as Statutory Auditors of the Company at the 50th Annual General Meeting (AGM) held on 29th September 2021, for a term of 5 years to hold office from the conclusion of the 50^th AGM till the conclusion of 55^th AGM.

Accounts:

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. There are no qualifications or observations made by the Statutory Auditor in the said report. During, FY 2023-24, the Statutory Auditors had not reported

any matter under Section 143(12) of the Act and therefore, no detail is required to be disclosed under Section 134(3) of the Act.

Auditors'' Report:

The Audit Reports dated May 24, 2024 issued by M/s. DGMS & Co, Chartered Accountants, and Statutory Auditors on the company''s standalone financial statements for the financial year ended 2023-24 is a part of Annual Report.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, the Board had appointed M/s. Shivam Sharma and Associates, Practicing Company Secretaries, Mumbai (Membership No. ACS A35727, COP No. 16558), to conduct Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report for the financial year ended 31st March 2024 is annexed herewith at Annexure I to this Report. There are no qualifications or observations made by the Secretarial Auditor in the said report. During FY 2023-24, the Secretarial Auditors had not reported any matter under Section 143(12) of the Act.

Cost Auditors and Cost Records

Pursuant to the provisions of Section 148 of Companies Act, 2013 and rules made thereunder, The Board of Directors, on the recommendation of the Audit Committee, has appointed Mr. Krishna Murthy, Bangalore Cost Accountants (Firm Regn No. FCMA7658) as the Cost Auditor to audit the cost records for the financial year ending 31st March 2025. Remuneration payable to the Cost Auditor is subject to approval by the members of the Company. Accordingly, a resolution seeking members'' approval for the remuneration payable to Mr. Krishna Murthy, Bangalore Cost Accountants, forms part of Notice convening 53^rd AGM of the Company, along with relevant details of the proposed remuneration.

The Cost Accountants have confirmed that their appointment is within the limits of Section 141(3)(g) of the Act and free from any disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013. In terms of Section 148 of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, it is stated that the cost accounts and records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Act.

Disclosure as per the Companies (Accounts) Amendment Rules, 2018:

Company has made and maintained its Cost accounts and records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014.

Internal Auditors

Company has appointed M/S B Gangadhara and Co., Chartered Accountant, Davangere, (Membership No. 024094) as Internal Auditor of the Company, to conduct internal audit and to issue report thereon from financial year 2022-23 to the financial year 2024-25 and to review internal controls and operating systems and procedures as per the scope of the audit. The Internal Audit Reports of the company are reviewed by the Audit Committee on monthly basis. The Internal Auditors send the quarterly audit observation to the company and the same was presented to the Audit Committee, during the year.

Details of Directors and Key Managerial Personnel

Mr. Shamanur Shivashankarappa Ganesh was re-appointed as the Managing Director of the Company for a period of five years with effect from 24 September 2019. The present term of Mr. Shamanur Shivashankarappa Ganesh comes to an end on 23rd September 2024.The Board based on the recommendation of the Nomination and Remuneration recommends his reappointment at the forthcoming Annual General Meeting for a further period of five years effective from September 24, 2024 to September 23, 2029. Brief Resume Mr. Shamanur Shivashankarappa Ganesh (DIN: 00451383), Director is circulated to the members as part of this Annual report.

On the recommendation of the Nomination and Remuneration Committee, the Board has appointed Mrs. Vinita Dilip Modak (DIN: 10763274) as an Additional Director in Independent Category with effect from 06. 09.2024. The appointment of Mrs. Vinita Dilip Modak as Independent Director for shareholders'' approval is included in this 53rd AGM.

On the recommendation of the Nomination and Remuneration Committee, the Board has appointed Ms. Hima Bindu Sagala (DIN: 09520601) as an Additional Director in Independent Category with effect from 06. 09.2024. The appointment of Ms. Hima Bindu Sagala as an Independent Director for shareholders'' approval is included in this 53^rd AGM.

Directors retire by rotation

Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company Mr. Abhijith Shamanur (DIN: 03451918), Director retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

During the year 2023-24, there is no change in the composition of the Board of Directors. The Board of directors and KMP consists of:

Sl. No.	Name of Directors	Designation	Relationship
1	Sri Shamanur Shivashankarappa Ganesh	Chairman cum Managing Director	-
2	Sri Abhijith Ganesh Shamanur	Executive Director	Son of M.D.
3	Smt. Rekha Ganesh1	Director	Wife of M.D.
4	Sri Tumbegere Rudrappa	Independent Director	-
5	Sri Thappagondanahally Rajashekarappa	Independent Director	-
6	Sri Veena Umapathy	Independent Director	-

Details of KMPs:

Sr.No.	Name of the KMPs	Designation
1	Sri Shamanur Shivashankarappa Ganesh	Managing Director
2	Mr. Ganeshrao Virupakshappa*	Chief Financial Officer (CFO)
3	Miss. Nidhi Vaswani	Company Secretary and Compliance Officer (CO)

*Mr. Ganeshrao Virupakshappa resigned as Chief Financial Officer w.e.f 07th February, 2024 and Mr. Onkarappa P. was appointed as Chief Financial Officer w.e.f 30th April, 2024.

Deposits

During the year under review, your Company has not accepted any deposits from public within the meaning of Sections 73 and 74 of the Companies Act, 2013 (the “Act") and the Companies (Acceptance of Deposits) Rules, 2014.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Information as per the Companies Act, 2013 and the rules framed there under relating to conservation of energy, technology absorption, foreign exchange earnings and outgo forms part of this Report and is annexed hereto as Annexure II.

Disclosures/Reporting:

Annual Return

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014, the Annual Return of the Company for FY 2023-24 is available on the website of the Company at https://davangeresugar.com/financials/.

Number of Meetings of Board

During the Financial Year 2023-24, Six (6) Board Meetings were conducted on 30^th May, 2023, 28^th July, 2023, 14^th August, 2023, 6^th November, 2023, 14^th February, 2024, 5^th March, 2024.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:

(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with no material departures;

(b) that the Directors have 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 on 31^st March, 2024 and of the profit of the Company for the year ended on that date;

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) that the Directors have prepared the annual accounts on a ''going concern'' basis;

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

(f) that 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.

Committees of the Board

The Board has currently four Committees namely - Audit Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, and Nomination and Remuneration Committee. The terms of reference of the Board Committees are in compliance with the provisions of the Companies Act, 2013, SEBI LODR Regulations, and are also reviewed by the Board from time to time. The role and composition of these Committees, including the number of meetings held during the financial year and the related attendance are provided in the subsequent paragraphs.

Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees given, securities provided and investments made are provided in the notes to the financial statements. During the year under review, there were no loans, guarantee or investment requiring the Compliance of Section 186(3) of the Companies Act, 2013.

Performance Evaluation

Pursuant to the provisions of the Act and Listing Regulations, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees, and of all the individual Directors based on various parameters relating to roles, responsibilities, and obligations of the Board, effectiveness of its functioning, the contribution of Directors at meetings and the functioning of its Committees. The performance evaluation of the Chairman and Non-Independent Director was carried out by the Independent Directors in their separate meeting. The Board of Directors expressed their satisfaction with the evaluation process.

The meeting of Independent Directors of the Company was held on 14^thFebruary, 2024, to discuss matters as per the provisions of Companies Act, 2013 and the Listing Regulations. The Board hereby confirms that the Company has received necessary declaration from each of the independent directors under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

The company has devised a policy naming (Nomination & Remuneration Policy) for performance evaluation of Independent Directors, Board, Committees and other individual directors which includes the criteria and process for the performance evaluation of the Executive/ Non-executive directors and Committees and the Board as a whole. The policy is uploaded on the website of the company under Investor section at https://davangeresugar.com/policies-and-codes/

Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management of the Company

The Board has on the recommendation of the Nomination & Remuneration Committee, framed a Nomination and Remuneration policy namely "Nomination & Remuneration Policy" in line with the requirement of Section 178 of the Companies Act, 2013. The policy inter alia provides the procedure for selection, appointment and remuneration of Directors and Key Managerial Personnel, including criteria for determining qualifications, positive attributes, and independence of Directors.

Board Evaluation

Pursuant to the provisions of section 134(3)(p) the Companies Act, 2013, the Board of directors of the company is committed to get its performance evaluated in order to identify its strength and areas in which it may improve its functioning. In this regard, the Nomination and Remuneration Committee has established the process for evaluation of the performance of Directors, including the Independent Directors.

The company has devised a policy naming (Nomination & Remuneration Policy) for performance evaluation of Independent Directors, Board, Committees and other individual directors which includes the criteria and process for the performance evaluation of the Executive/ Non-executive directors and Committees and board as a whole. The policy is uploaded on the website of the company under Investor section at https://davangeresugar.com/policies-and-codes/.

During the year under review as per the policy for the performance evaluation, formal annual evaluation of the performance of the Directors, including independent directors, the board and its committees was made by the Nomination & Remuneration Committee in their respective meetings.

Contracts and Arrangements with Related Parties

All Contracts/arrangements entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis referred in form AOC-2 annexed hereto as Annexure III. The details of transactions with related parties are given in notes to the financial statements. Details showing the disclosure of transactions with related parties as required under IND AS-24 and 2A of Schedule V of SEBI Listing Regulations are set out in the financial statements.

The Company''s Policy on Related Party Transactions may be accessed on the Company''s website at https://davangeresugar.com/corporate-governance/

Risk Management Policy

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

Particulars of Employees

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure IV to this Report.

Risk Management & Internal Financial Controls

The Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to recognize, assess and reduce exposure to risks wherever possible, identify steps to mitigate risks and to identify risk owners for all types of risks. The Company''s Risk Management Policy is based on the philosophy of achieving substantial growth while mitigating and managing risks involved.

The Company''s internal control systems with reference to the financial statements are adequate and commensurate with the nature of its business and the size and complexity of its operations. Periodic audits and checks are conducted and the controls to prevent, detect and correct any irregularities in the operations have been laid down by the Company.

Application made or any proceeding pending under the insolvency and bankruptcy code:

As on the date of the Report no application is pending against the Company under Insolvency and Bankruptcy Code, 2016 and the Company did not file any application under IBC during the F.Y. 2023-24.

Details of difference between valuation amount on one time settlement and valuation while availing loan from banks and financial institutions:

During the year under review there has been no one-time settlement of loans taken from Banks and Financial Institution.

Corporate Social Responsibility

Every company having net worth of Rs. 500 Crore (Rupees Five Hundred Crore) or more, or turnover of Rs. 1,000 Crore (Rupees One Thousand Crore) or more or a net profit of Rs. 5 Crore (Rupees Five Crore) or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

The Company has met this criterion for the Financial Year 2023-24 year also similarly as previous Financial Year as the net profit of the company exceeds Rs. 5 Crore (Rupees Five Crore). Your Company is committed to Corporate Social Responsibility (CSR) by catering to the needs of the weaker sections of the society.

The CSR Policy of the Company may be accessed on the Company''s website at https://davangeresugar.com/policies-and-codes/. The report on the CSR activities is appended at Annexure V to the Board''s Report. The details relating to the composition, powers, roles, terms of reference etc. of CSR Committee are given in detail in the Corporate Governance Report, which forms part of this Annual Report.

Management Discussion and Analysis Report

Management discussion and Analysis Report for the year under review, as required under Regulation 34 read with Schedule V the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 (SEBI LODR 2015), is forming part of this Annual Report and the same is marked as Annexure VI.

CEO and CFO Certification:

In terms of Regulation 17(8) of the Listing Regulations, the CEO and CFO have certified to the Board of Directors of the Company with regard to the financial statements and other matters specified in the

said regulation for the financial year 2023-24. The certificate received from the CEO and CFO is attached herewith and the same is marked as Annexure VII.

Listing and Listing fees:

The Company has listed its shares on the National Stock Exchange of India Limited (NSE) with effect from 25^th January, 2024, vide NSE letter dated 23^rd January, 2024.

The Company affirms that the annual listing fees for the year 2023-24 to The Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India has been duly paid. As on date there are no outstanding dues.

Vigil Mechanism and Whistle Blower Mechanism

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the company has established a vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, genuine concerns, actual or suspected fraud or violation of the company''s Code of Conduct.

The mechanism provides adequate safeguards against victimization of Directors and employees who avail the vigil mechanism. In exceptional cases, Directors and employees have direct access to the Chairman of the Audit Committee. The detailed disclosure of the Vigil Mechanism & Whistle Blower Policy is available at https://davangeresugar.com/policies-and-codes/ under Investor desk.

Company Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)

The Board of Directors has code of practices and procedures for fair disclosure of unpublished price sensitive information (UPSI) in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015. Under this code the company lays down guidelines and procedures and principles to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation.

The policy has been formulated to regulate, monitor and ensure reporting of deals by Designated Persons and connected persons to maintain the highest ethical standards of dealing in Company securities.

Pursuant to amendments in the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 vide the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company adopted the new "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information"("Fair Disclosure Code") incorporating a policy for determination of "Legitimate Purposes" as per Regulation 8 and Schedule A to the said regulations w.e.f. 1st April, 2019.

The Revised Insider Trading Code or Policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information (UPSI), is available on our website at https://davangeresugar.com/policies-and-codes/.

Compliance with the Code of Conduct

The Board has formulated a code of Conduct for the Board Members and Senior Management of the company, which has been posted on the website of the company. It is affirmed that all the directors and senior management have complied with the code of conduct framed by the company and

confirmation from all the directors, KMP and senior management has been obtained in respect of the F.Y. 31st March 2024.

Prevention of Sexual Harassment at Workplace

The Company has complied with the requirement of constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act,2013 ("the Act") and Rules made there under. During the year, there were no complaints received by under the Act.

Corporate Governance

Your Company is committed to good corporate governance aligned with the best corporate practices. In compliance with Regulation 34 read with Schedule V of Listing Regulations, a detailed report on Corporate Governance forms part of this Annual Report. A Certificate from the Practicing Company Secretary confirming compliance of the conditions of Corporate Governance as stipulated under the Listing Regulations is appended as Annexure VIII to this Report.

Certificate of Non-Disqualification of Directors

Pursuant to Regulation 34(3) and Schedule V, Para C, Clause (10)(i) of SEBI (LODR) Regulations,2015, Certificate of non-disqualification of Directors as on 31^st March, 2024 has been received from Practicing Company Secretary and annexed as Annexure IX of the Directors'' report.

Material Changes & Events after Balance Sheet Date

After the date of the Balance sheet there were following material changes in the Company,

a. shareholders approved the subdivision of Equity share of Nominal value of Rs. 10/- (Rupee Ten only) each fully paid up into 10 Equity shares of Rs. 1/- (Rupee one only).

b. Further, Ms. Swathi Shamanur was appointed as Additional director with effect from 19^th April, 2024.

c. The authorized share capital of the Company was increased from Rs. 100,00,00,000/- (Rupees One Hundred Crores only) to 150,00,00,000/- (Rupees One hundred and Fifty crores only)

d. Ms. Rekha Ganesh resigned from the Board with effect from 04^th May, 2024.

Cautionary Statement:

The Board''s Report and Management Discussion & Analysis may contain certain statements describing the Company''s objectives, expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company is not obliged to update any such forward-looking statements. Some important factors that could influence the Company''s operations comprise economic developments, pricing and demand and supply conditions in global and domestic markets, changes in government regulations, tax laws, litigation and industrial relations.

Appreciation & Acknowledgements

The Board wishes to place on record its gratitude for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and farmers, cane growers and finally to all its members for the trust and confidence reposed on the Company. The Board further wishes to record its sincere appreciation for the significant contributions made by employees at all levels for their competence, dedication and contribution towards the operations of the Company.

For and on behalf of the Board

For Davangere Sugar Company Limited

Sd/- Sd/-

Shamanur Shivashankarappa Ganesh Abhijith Ganesh Shamanur

(Managing Director) (Director)

DIN: 00451383 DIN :03451918

Date: 06^th September, 2024 Place: Davangere

1

Smt. Rekha Ganesh has resigned as a Director w.e.f 04^th May 2024. Mrs. Swathi Shamanur was appointed as an Additional Non-Executive Director by Board of Directors in their meeting held on 19^th April 2024 and was regularized as a Director in Extra-Ordinary General Meeting of the Company held on 15^th May, 2024.

---

Mar 31, 2023

The Directors present the 52nd Annual Report of the Company highlighting the business and operations of the Company and the Audited Financial Statements for the Financial Year ended 31st March, 2023.

Results of our operations and State of Affairs

The highlights of the standalone financial results are as under:

(In Lacs)
Particulars	FY 2022-23	FY2021-22
Total Income	28058.43	1,2446.79
Profit/(loss)before financial expenses, depreciation and Exceptional items	5637.03	3463.15
Financial expenses	2712.54	1908.92
Depreciation	1156.49	887.61
Profit/(loss)before provision for tax and exceptional items Exceptional Items-Income Provision for taxation:	1768.00	666.62
-Current Tax	330.68	111.27
-Deferred Tax/(Income)	115.78	(12.66)
Net Profit/(Loss)	1321.55	568.01

Operating Highlights

The Company''s financial performance for the year ended March 31, 2023 is summarized below:

The Company achieved total income of INR 28058.43 Lacs for the year ended 31st March 2023 as against INR 1,2446.79 Lacs for the previous year. The EBITDA for the year under review stood at INR 5637.03Lacs as compared to INR 3463.15 Lacs for the previous year, while the Net Profit stood at INR 1321.55Lacs as compared to INR 568.01 Lacs for the previous year. Analysis of operating performance is covered under Management Discussion and Analysis which forms part of this Report.

Change in Business of the Company

There were no changes in the nature of business of the Company during the year under review. However, in order to expand the business and monetize the subsidies laid down by Government of India for Sugar Industry, the Management commenced commissioning of Molasses based Ethanol unit from April 2021 at a total cost of Rs. 99.31 Crores. The commissioning of the plant is completed and the commercial production is started from 01^st June, 2022.

Dividend & Dividend Distribution Policy

To retain the profits for future growth of the Company, Your Directors do not recommend any divided for the year ending on 31st March 2023. The Company has complied with the requirement of formulation of the Dividend Distribution Policy of the Company which may be accessed on the Company''s website at https://davangeresugar.com/policies-and-codes/.

Transfer to Reserves

During the year under review, for the Financial Year 2022-23, your Company does not propose to transfer any amount to General Reserve. An amount of INR 1321.54 Lacs is proposed to be retained as surplus in the Profit and Loss Account.

Share CapitalA) AUTHORISED SHARE CAPITAL:

During the year under review, there was no change in the Authorised Share Capital of the Company. The Authorised Share Capital stands at INR 10,000 Lacs divided into 10 Crores Equity Shares of Rs. 10/-each.

B) ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL:

However, during the year under review, the Paid-up Share Capital was increased from INR 5568.45 Lacs to INR 9408.45 Lacs by allotment of 3,84,00,000 Equity Shares of Rs. 10/- at a premium of Rs. 2.50/- per Equity Share on Right issue basis.

C) ISSUE OF BONUS SHARES:

During the year under review 2022-23, there was no Bonus issue of equity shares.

D) BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

E) ISSUE OF SHARES WITH DIFFERENTIAL VOTING RIGHTS, SWEAT EQUITY SHARES AND EMPLOYEES STOCK OPTIONS:

During the financial year under review the company has not issued any shares with differential voting rights nor granted stock option, nor Sweat Equity.

F) PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BY TRUSTEES FOR THE BENEFIT OF EMPLOYEES: N.A.G) RIGHT ISSUE OF SHARES

The Board of Directors in their meeting held on 23rd day of July, 2022 alloted 3,84,00,000 Equity Shares of Rs. 10/- at a premium of Rs. 2.50/- per share on rights basis by the Letter of Offer dated May 26, 2022 and in pursuance of Basis of Allotment approved by BSE Limited, the designated Stock Exchange on July 22, 2022. Such right issue of shares shall rank pari passu with the existing Equity Shares of the Company,

Significant and Material Orders passed by the Regulators or Courts or Tribunals

There are no significant, material orders passed by the regulators or Courts or Tribunals, which would impact the going concern status of the company and its future operations.

Subsidiaries, Joint Ventures or Associate Companies

The company does not have any subsidiaries, joint ventures or Associate Company.

Accounts, Auditors and Audit Report Statutory Auditor

M/s. DGMS & Co., Chartered Accountants (Firm Registration No. 0112187W) were appointed as Statutory Auditors of the Company at the 50th Annual General Meeting (AGM) held on 29th September 2021, for a term of 5 years to hold office from the conclusion of the 50thAGM till the conclusion of 55thAGM.

Accounts:

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. There are no qualifications or observations made by the Statutory Auditor in the said report. .During, FY 2022-23, the Statutory Auditors had not reported any matter under Section 143(12) of the Act and therefore, no detail is required to be disclosed under Section 134(3) of the Act.

Auditors'' Report:

The Audit Reports dated May 30, 2023 issued by M/s. DGMS & Co, Chartered Accountants, and Statutory Auditors on the company''s standalone financial statements for the financial year ended 2022-23 is a part of Annual Report.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, the Board had appointed M/s. M/s. Amit R. Dadheech & Associates, Practicing Company Secretaries, (Membership No. ACS 22889, COP No. 8952), to conduct Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report for the financial year ended 31st March 2023 is annexed herewith at Annexure I to this Report. There are no qualifications or observations made by the Secretarial Auditor in the said report. During FY 2022-23, the Secretarial Auditors had not reported any matter under Section 143(12) of the Act.

Cost Auditors

Pursuant to the provisions of Section 148 of Companies Act, 2013 and rules made thereunder, The Board of Directors, on the recommendation of the Audit Committee, has appointed Mr. Krishna Murthy, Bangalore Cost Accountants (Firm Regn No. FCMA7658) as the Cost Auditor to audit the cost records for the financial year ending 31st March 2024. Remuneration payable to the Cost Auditor is subject to approval by the members of the Company. Accordingly, a resolution seeking members'' approval for the remuneration payable to Mr. Krishna Murthy, Bangalore Cost Accountants, forms part of Notice convening 52^nd AGM of the Company, along with relevant details of the proposed remuneration.

The Cost Accountants have confirmed that their appointment is within the limits of Section 141(3)(g) of the Act and free from any disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013. In terms of Section 148 of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, it is stated that the cost accounts and records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Act.

Disclosure as per the Companies (Accounts) Amendment Rules, 2018:

Company has made and maintained its Cost accounts and records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014.

Internal Auditors

Company has appointed M/S B Gangadhara and Co., Chartered Accountant, Davangere,(Membership no.024094) as Internal Auditor of the Company, to conduct internal audit and to issue report thereon from financial year 2022-23 to the financial year 2024-25 and to review internal controls and operating systems and procedures as per the scope of the audit. The Internal Audit Reports of the company are reviewed by the Audit Committee on monthly basis. The Internal Auditors send the quarterly audit observation to the company and the same were presented to the Audit Committee.

Details of Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Act, Mr. Abhijith Ganesh Shamanur (DIN: 03451918), Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment at the forthcoming Annual General Meeting. Brief Resume of Mr. Abhijith Ganesh Shamanur (DIN: 03451918) is circulated to the members as part of this Annual report.

During the year 2022-23, there is no change in the composition of the Board of Directors of the Company except change in KMP (Company Secretary and Compliance Officer). The Board of directors and KMP consists of:

Sl. No.	Name of Directors	Designation	Relationship
1	Sri Shamanur Shivashankarappa Ganesh	Chairman cum Managing Director	-
2	Sri Abhijith Ganesh Shamanur	Executive Director	Son of M.D.
3	Smt. Rekha Ganesh	Director	Wife of M.D.
4	Sri TumbegereRudrappa	Independent Director	-
5	Sri Thappagondanahally	Independent Director	-

	Rajashekarappa
6	Sri Veena Umapathy	Independent Director	-

Details of KMPs:
Sl.No.	Name of the KMPs	Number of Board Meetings attended Designation
1	Sri Shamanur Shivashankarappa Ganesh	Managing Director
2	Mr. Ganeshrao Virupakshappa	Chief Financial Officer (CFO)
3	Miss Nidhi Vaswani	Company Secretary and Compliance Officer (CO) appointed w.e.f 13th January, 2023.
* Mrs. Pooja, MM, Company Secretary and Compliance Officer (CO) Resigned w.e.f 14.11.2022

Deposits

During the year under review, your Company has not accepted any deposits from public within the meaning of Sections 73 and 74 of the Companies Act, 2013 (the "Act") and the Companies (Acceptance of Deposits) Rules, 2014.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Information as per the Companies Act, 2013 and the rules framed there under relating to conservation of energy, technology absorption, foreign exchange earnings and outgo forms part of this Report and is annexed hereto as Annexure II.

Disclosures/Reporting:Annual Return

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014, the Annual Return of the Company for FY 2022-23 is available on the website of the Company at https://davangeresugar.com/financials/.

Number of Meetings of Board

During the Financial Year 2022-23, Eight (8) Board Meetings were conducted on 23rd May, 2022,

27th May, 2022 , 23rd July 2022, 12th August, 2022, 02nd September, 2022,14th November, 2022,

13th January,2023 and 13th February, 2023.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:

(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with no material departures;

(b) that the Directors have 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 31^st March 2023 and of the profit of the Company for the year ended on that date;

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the Directors have prepared the annual accounts on a ''going concern'' basis;

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

(f) that 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.

Committees of the Board

The Board has currently four Committees namely - Audit Committee, Stakeholders'' Relationship Committee, Corporate Social Responsibility Committee and Nomination and Remuneration Committee. The terms of reference of the Board Committees are in compliance with the provisions of the Companies Act, 2013, SEBI LODR Regulations and are also reviewed by the Board from time to time. The role and composition of these Committees including the number of meetings held during the financial year and the related attendance are provided in the subsequent paragraphs.

Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees given, securities provided and investments made are provided in the notes to the financial statements. During the year under review, there were no loans, guarantee or investment requiring the Compliance of Section 186(3) of the Companies Act, 2013.

Performance Evaluation

Pursuant to the provisions of the Act and Listing Regulations, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees. The performance evaluation of the Chairman and Non-Independent Director was carried out by the Independent Directors in their separate meeting. The Board of Directors expressed their satisfaction with the evaluation process.

The meeting of Independent Directors of the Company was held on 13^thFebruary, 2023, to discuss matters as per the provisions of Companies Act, 2013 and the Listing Regulations. The Board hereby confirms that the Company has received necessary declaration from each independent directors under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

The company has devised a policy naming (Nomination & Remuneration Policy) for performance evaluation of Independent Directors, Board, Committees and other individual directors which includes the criteria and process for the performance evaluation of the Executive/ Non-executive directors and Committees and board as a whole. The policy is uploaded on the website of the company under Investor section at https://davangeresugar.com/policies-and-codes/

Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management of the Company

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Nomination and Remuneration policy namely "Nomination & Remuneration Policy" in line with the requirement of Section 178 of the Companies Act, 2013 The policy inter alia provides the procedure for selection, appointment and remuneration of Directors and Key Managerial Personnel, including criteria for determining qualifications, positive attributes, and independence of Directors.

Board Evaluation

Pursuant to the provisions of section 134(3)(p) the Companies Act, 2013, the Board of directors of the company is committed to get its performance evaluated in order to identify its strength and areas in which it may improve its functioning. In this regard, the Nomination and Remuneration Committee has established the process for evaluation of the performance of Directors, including the Independent Directors.

The company has devised a policy naming (Nomination & Remuneration Policy) for performance evaluation of Independent Directors, Board, Committees and other individual directors which includes the criteria and process for the performance evaluation of the Executive/ Non-executive directors and Committees and board as a whole. The policy is uploaded on the website of the company under Investor section at https://davangeresugar.com/policies-and-codes/.

During the year under review as per the policy for the performance evaluation, formal annual evaluation of the performance of the Directors, including independent directors, the board and its committees was made by the Nomination & Remuneration Committee in their respective meetings.

Contracts and Arrangements with Related Parties

All Contracts/arrangements entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis referred in form AOC-2 annexed hereto as Annexure III. The details of transactions with related parties are given in notes to the financial statements. Details showing the disclosure of transactions with related parties as required under IND AS-24 and 2A of Schedule V of SEBI Listing Regulations are set out in the financial statements.

The Company''s Policy on Related Party Transactions may be accessed on the Company''s website at https://davangeresugar.com/corporate-governance/

Risk Management Policy

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

Particulars of Employees

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure IV to this Report.

Risk Management & Internal Financial Controls

The Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to recognize, assess and reduce exposure to risks wherever possible, identify steps to mitigate risks and to identify risk owners for all types of risks. The Company''s Risk Management Policy is based on the philosophy of achieving substantial growth while mitigating and managing risks involved.

The Company''s internal control systems with reference to the financial statements are adequate and commensurate with the nature of its business and the size and complexity of its operations. Periodic audits and checks are conducted and the controls to prevent, detect and correct any irregularities in the operations have been laid down by the Company.

Application made or any proceeding pending under the insolvency and bankruptcy code:

As on the date of the Report no application is pending against the Company under Insolvency and Bankruptcy Code, 2016 and the Company did not file any application under IBC during the F.Y. 2022-23.

Details of difference between valuation amount on one time settlement and valuation while availing loan from banks and financial institutions:

During the year under review there has been no one-time settlement of loans taken from Banks and Financial Institution.

Corporate Social Responsibility

Every company having net worth of Rs. 500 Crore (Rupees Five Hundred Crore) or more, or turnover of Rs. 1,000 Crore (Rupees One Thousand Crore) or more or a net profit of Rs. 5 Crore (Rupees Five Crore) or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

The Company has met this criteria for the Financial Year 2022-23 year also similarly as previous Financial Year as the net profit of the company exceeds Rs. 5 Crore (Rupees Five Crore),. Your Company is committed to Corporate Social Responsibility (CSR) by catering to the needs of the weaker sections of the society.

The CSR Policy of the Company may be accessed on the Company''s website at https://davangeresugar.com/policies-and-codes/. The report on the CSR activities is appended at Annexure V to the Board''s Report. The details relating to the composition, powers, roles, terms of reference etc. of CSR Committee are given in detail in the Corporate Governance Report, which forms part of this Annual Report.

Management Discussion and Analysis Report

Management discussion and Analysis Report for the year under review, as required under Regulation 34 read with Schedule V the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 (SEBI LODR 2015), is forming part of this Annual Report and the same is marked as Annexure VI.

CEO/ CFO Certification:

In terms of Regulation 17(8) of the Listing Regulations, the CFO has certified to the Board of Directors of the Company with regard to the financial statements and other matters specified in the said regulation for the financial year 2022-23. The certificate received from CFO is attached herewith and the same is marked as Annexure VII.

Listing fees:

The Company affirms that the annual listing fees for the year 2022-23 to The Bombay Stock Exchange Limited (BSE) has been duly paid. As on date no outstanding dues.

Vigil Mechanism and Whistle Blower Mechanism

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the company has established a vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, genuine concerns, actual or suspected fraud or violation of the company''s Code of Conduct.

The mechanism provides for adequate safeguards against victimization of Directors and employees who avail the vigil mechanism. In exceptional cases, Directors and employees have direct access to the Chairman of the Audit Committee. The detailed disclosure of the Vigil Mechanism & Whistle Blower Policy is available at https://davangeresugar.com/policies-and-codes/ under Investor desk.

Company Code of Practices and Procedures For Fair Disclosure Of Unpublished Price Sensitive Information (UPSI)

The Board of Directors has code of practices and procedures for fair disclosure of unpublished price sensitive information (UPSI) in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015. Under this code the company lays down guidelines and procedures and principals to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation.

The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and connected persons to maintain the highest ethical standards of dealing in Company securities.

Pursuant to amendments in the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 vide the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company adopted the new "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information"("Fair Disclosure Code") incorporating a policy for determination of "Legitimate Purposes" as per Regulation 8 and Schedule A to the said regulations w.e.f. 1st April, 2019.

The Revised Insider Trading Code or Policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information (UPSI), is available on our website at https://davangeresugar.com/policies-and-codes/.

Compliance with the Code of Conduct

The Board has formulated code of Conduct for the Board Members and Senior Management of the company, which has been posted on the website of the company. It is affirmed that all the directors and senior

management have complied with the code of conduct framed by the company and confirmation from all the directors, KMP and senior management has been obtained in respect of the F.Y. 31st March 2023.

Prevention of Sexual Harassment at Workplace

The Company has complied with the requirement of constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act,2013 ("the Act") and Rules made there under. During the year, there were no complaints received by under the Act.

Corporate Governance

Your Company is committed to good corporate governance aligned with the best corporate practices. In compliance with the Regulation 34 read with Schedule V of Listing Regulations, a detailed report on Corporate Governance forms part of this Annual Report. A Certificate from the Practicing Company Secretary confirming compliance of the conditions of Corporate Governance as stipulated under the Listing Regulations is appended as Annexure IX to this Report.

Certificate of Non-Disqualification of Directors

Pursuant to Regulation 34(3) and Schedule V, Para C, Clause (10)(i) of SEBI (LODR) Regulations,2015, Certificate of non-disqualification of Directors as on 31.03.2023 has been received from Practicing Company Secretary and annexed as Annexure X of the Directors'' report.

Material Changes & Events after Balance Sheet Date

There are no material changes which have occurred after the date of the Balance Sheet and the date of this Report.

Cautionary Statement:

The Board''s Report and Management Discussion & Analysis may contain certain statements describing the Company''s objectives, expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company is not obliged to update any such forward-looking statements. Some important factors that could influence the Company''s operations comprise economic developments, pricing and demand and supply conditions in global and domestic markets, changes in government regulations, tax laws, litigation and industrial relations.

Appreciation & Acknowledgements

The Board wishes to place on record its gratitude for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and farmers, cane growers and finally to all its members for the trust and confidence reposed on the Company. The Board further wishes to record its sincere appreciation for the significant contributions made by employees at all levels for their competence, dedication and contribution towards the operations of the Company.

---

Mar 31, 1993

The Members,

Your directors have great pleasure in presenting the 22nd Annual Report and the Audited Accounts for the year ended 31st March, 1993.

PRODUCT1ON:

The crushing operations for the year 1992-93 commenced on 17-10-1992 and ended on 8-4-1993. During the period, 2,11,790 M.T. of cane was crushed producing 2,02,299 quintals of sugar at an average recovery of 9.55% as compared to 2,77,080 M.Ts. of cane crushed and 2,65,632 quintals white Sugar produced at an average recovery of 9.59% during the previous year. The capacity utilisation during the year 115.08% as against 151.11% during the previous year. The average daily rate of crushing including stoppages during the current year was 1248.431 M.T. per day as against 1397.339 M.T. per day for the previous year.

Cane crushed during the year under report was 206511 M.T. producing 197990 quintals of sugar at an average recovery of 9.59%.

The All India sugar production is likely to register around 107 lakh tonnes during 1992-93 as against all time high record of 134 lakh tonnes registered during the previous season. Having regard to the comfortable opening stock position in the beginning of the season, the Government has decided to export around 6 lakh tonnes and exported 2.9 lakh tonnes upto April, 1993. Since the production estimates were revised downwards, the Government decided not to undertake further exports. The member may kindly make out that there has been a considerable decrease in sugarcane crushing by the company and recovery of sugar is continued to be low which could be attributed to the crushing of over matured cane and also irrigationally suffered cane.

CANE PRICE:

The minimum statutory price for sugarcane as announced by the Central Government for the Season 1992-93 was Rs. 310/- per tonne linked to 8.5% recovery as again Rs. 260/- per tonne for the previous season. The price that was payable as per the Central Government's directives by the company for the year 1992-93 was Rs. 357-40 per tonne as against Rs. 312/- per for the previous season.

As against this, the State Government has advised to pay a price of Rs. 425/- per tonne for 8.5% recovery which works out to Rs. 479-50 per tonne and your company has paid the price of Rs. 480/- per tonne which includes purchase tax subsidy of Rs. 12/- per tonne and transportation and harvesting charges subsidy of Rs. 110-60 per tonne. Sugarcane price for the year 1991-92 was finalised at Rs. 430/- per tonne inclusive of purchase tax subsidy and transportation and harvesting charges subsidy. As against this, Rs. 420/- per tonne has been paid and the balance of Rs. 10/- per tonne is adjustable to share capital, as reported in our last year's report.

SUGAR POLICY:

While continuing the dual policy of sugar production for the year under report also, the Government has announced far reaching liberalisations in sugar policy from the year 1992-93. The free sale proportion was further liberalised to 60% and the SMP increased to Rs. 31/- per quintal linked to 8.5% recovery. This liberalisation policy gave a thrust to establishment of sugar complexes. The paper plant based on bagasse has been delicensed and distilleries based on molasses had also been delicensed. The lifting of price and movement control of molasses has been anounced from June this year, thus creating a good atmosphere for development of sugar sector in the country. The levy price fixed by the Central Government for sugar produced from 1-10-1992 for S-30 grade sugar was Rs. 653-80 per quintal as against Rs. 556-16 per quintal for the previous season's production. However, the price of Rs. 653-80 per quintal is still continued to be below the cost of production which is Rs. 741/- per quintal for the year 1992-93. The cane price component out of the total cost of production was 64.81% as against 69.49% during the previous year.

FINANCIAL RESULTS:

The Members may kindly make out that during the year under report your Company has registered a net profit of Rs. 55.61 lakhs after accounting of Rs. 16.62 lakhs towards additional cane price for 1991-92 season; and thus been able to continue the profit making trend from the year 1986-87 onwards. During the year under review, the Members may kindly make out that the net profit registered is Rs. 55.61 lakhs after provision for depreciation of Rs. 23.96 lakhs. With this, it has been possible to bring down the accumulated losses from Rs. 364.82 lakhs to Rs. 309.21 lakhs. The turnover during the year has been Rs. 1330.88 lakhs as against Rs. 1337.75 lakhs for previous year. It can be seen that there has been a considerable increase in interest charges to the Banks which is Rs. 118.14 lakhs against previous year figure of Rs. 99.24 lakhs. The financial results at a glance is as reproduced hereunder :

(Rs. in lakhs) This year Previous Year

Profits before Interest and 197.71 149.76 lakhs Depreciation Less: Interest 118.14 99.24 lakhs Depreciation 23.96 22.49 lakhs ------ ------------ NET PROFIT 55.61 28.03 lakhs ------ ------------

INSTITUTIONAL AND GOVERNMENT DUES:

As on the date of Balance sheet, your company, in all, owes a sum of Rs. 439.00 lakhs to Financial Institutions, Banks, Government Of Karnataka and Promoters as long term secured loans and unsecured loans. This includes a sum of Rs. 261.00 lakhs, representing purchase tax accumulations that accrued upto the year 1983-84 for which, Government of Karnataka, as a rehabilitation measure, has granted further moratorium of 10 years, upto the year 1994, with a stipulation that the financial position of the company would be reviewed from time to time and that the same would be recovered earlier, if, the financial position improves. This was one of the conditions of the package of reliefs and concessions as stipulated by M/s Industrial Development Bank of India for extension of their package of reliefs and concessions as approved at the BIFR level. Further, it includes a sum of Rs. 97.09 lakhs due to the Promoters, which has been deferred by the Company for payment after institutions' and banks' due are cleared, which also is as per the package of reliefs. A sum of Rs. 15.00 lakhs of unsecured loans availed form KAIC Ltd has been converted to equity during the year.

REPAYMENT TO INSTITUTIONS:

(A) INTEREST:

During the year under report, an amount of Rs. 118.14 lakhs was paid to the Financial Institutions and Banks towards interest which is inclusive of Rs. 99.17 lakhs on working capital. Further, the interest on working capital for the same period during the year increased to Rs. 99.17 lakhs from Rs. 74.90 lakhs for the same period during the previous year which was in view of lower release of sugar (Not commensurate with production) and the consequential carry over of sugar stocks to Rs. 1366.00 lakhs. The Interest on unsecured Loans availed from Promoters has been funded as per the package of reliefs.

(B) TERM LIABILITY: (PRINCIPAL)

In all, during the financial year, your Company has repaid a sum of Rs. 9.71 lakhs out of its cash accruals against its term Liabilities and has thus reduced the Secured Long term Loans from Rs. 89.82 lakhs as on 31.3.1992 to Rs. 80.11 lakhs as on 31.3.1993. In view of the lower cash generation, it was not possible to clear the instalment due in March, 1992 to M/s. lDBI, IFCI, UC and UTI.

TERM LOAN GUARANTEE FROM THE GOVT. OF KARNATAKA.

As stated in the previous report, during the year 1986-87 all the Members of the Financial Consortium viz., M/s. Industrial Development Bank of India, M/s. Industrial Finance Corporation of India, M/s. Life Insurance Corporation of India and M/s. Industrial Credit & Investment Corporation of India Ltd., had recalled their Term Liability alongwith the interest dues, due to the default by the Company in payment of its Term Liabilities and had stipulated that the same could be withdrawn after the Govt. of Karnataka stands guarantee for Term Loan outstandings of the company. Timely help of the Govt. of Karnataka during the year 1988 in execution of the Guarantee in favour of the Financial Institutions and Banks, enabled the Company to see that the loan recall letters were withdrawn by the Financial Institutions.

APPLICATION OF SICK INDUSTRIAL COMPANIES

(SPECIAL PROVISIONS) ACT, 1985:

As stated in the previous Annual Report, the company was declared as a Sick Industrial Company within the meaning of Section 3(1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985 and the Board for Industrial and Financial Reconstruction had directed M/s. Industrial Development Bank of India to take suitable action for rehabilitation of the Company, which was complied with, in time. After the withdrawal of the Term Loan recall notices referred to above, the Lead Financial Institution, i.e., M/s. Industrial Development Bank of India had communicated to all the Members of the Financial Consortium, including Govt. of Karnataka and Promoters the scheme of rehabilitation regarding reliefs and concessions approved by the Board for Industrial & Financial Reconstruction. The Company continues to be Sick as per the provisions of the Act, as the net worth as on 31.3.1993 is still negative, to the extent of Rs. 46.94 lakhs.

EXTENSION OF PACKAGE OF RELIEFS & CONCESSIONS:

The scheme of rehabilitation, as approved by the Board for Industrial & Financial Reconstruction and as reviewed during January, 1991 mainly provides for repayment of the Institutional Loans before 31st March, 1993, which, as on 31st March, 1992 stands at Rs. 89.82 lakhs. Again during the year under report, repayment of Rs. 89.82 lakhs has been rescheduled to commence form 1-4-1993 and to end by 1-7-1994. Against this, a sum of Rs. 9.71 lakhs has been paid during the year in advance.

AVAILABILITY OF CANE:

It is dishearthening to note that the cane crushed has decreased to 206511 M.T during the current year from 277080 M.TS. during the previous year. This was mainly due to uncertainty prevailed during previous year about the availability of water from Bhadra Dam, failure of rains in the months of March to June, 1992. The situation is likely to remain in the ensuing season also. It is expected to crush about 1.6 lakh tonnes for the 1993-94 season as only 5538 acres has been maintained with an average yield of 30 MT per acre (Plant 2644 acres and Ratoon 2894 acres).

Keeping in view of this declining trend in sugarcane plantation, your directors thought it fit to introduce subsidy for early and mid-late varieties of cane and accordingly the subsidy scheme has been introduced for the planting season 1993-94. By this, it is anticipated to have cane availability in about 7000 acres by May, 1994. With the availability of ratoon cane in about 3000 acres, your company will be able to crush about 3 lakh tonnes of cane for the season 1994-95.

POSIT1ON OF LEVY PRICE PETITIONS:

The Levy price fixation petitions and appeals are pending before the Supreme Court and High Court of Karnataka for the Sugar years 1974-75 to 1979-80 and 1980-81 to 1982-83 respectively. In regard to the Sugar Year 1975-76, the decision has gone against the favour of the company and a sum of Rs. 4.80 lakhs (exclusive of interest) had fallen due for payment for the excess levy price collected by the Company. The Company has preferred an appeal for stay in the Supreme Court against the order issued in amending the Levy Sugar Price Equalisation Fund Act.

Effluent Treatment Plant:

The Karnataka State Pollution Board have issued a notice for not bringing the effluent to the standards prescribed by it and the civil suit filed by them in the J.M.F.C. Court, Davangere against the company is still pending disposal.

AUDITORS:

M/s. Santhappa & Company, Chartered Accountants, Davangere, were appointed as Auditors of the Company at the last Annual General Meeting and will be holding the office till the conclusion of this Annual General Meeting. They are eligble for re-appointment on a remuneration to be fixed by the Members.

CHANGE IN THE BOARD OF DIRECTORS:

The following changes have taken place in the Board of Directors since the date of the previous report:

Sri H.M. Anjaneya was appointed as a Director with effect from 29.9.1992 in place of Sri B.S. Hemanna, a retired Director.

PARTICULARS OF CONSERVATION OF ENERGY ETC., AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956 :

a) CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The Particulars in regard to Conservation of energy pursuant to Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 (Form-A) is given in Annexure and there was no activity in regard to Technology Absorption, which is required to be furnished in Form - B.

b) FOREIGN EXCHANGE EARNINGS AND OUT GO:

(i) There has been no activity by the Company regarding direct export. There are no plans for development of new exports.

(ii) There has been no usage OR earnings in foreign exchange.

INDUSTRIAL RELATIONS:

Industrial relation with the labour continued to be cordial and satisfactory. Your Directors wish to record their appreciation for the co-operation of the employees during the year.