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Gayatri Sugars Ltd.

BSE: 532183 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE622E01023
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OPEN 10.20
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VOLUME 54813
52-Week high 13.68
52-Week low 6.91
P/E
Mkt Cap.(Rs cr) 43
Buy Price 9.95
Buy Qty 65.00
Sell Price 10.25
Sell Qty 200.00
OPEN 10.20
CLOSE 10.17
VOLUME 54813
52-Week high 13.68
52-Week low 6.91
P/E
Mkt Cap.(Rs cr) 43
Buy Price 9.95
Buy Qty 65.00
Sell Price 10.25
Sell Qty 200.00

Gayatri Sugars Ltd. (GAYATRISUGARS) - Director Report

Company director report

To the Member(s)

Your Directors have pleasure in presenting before you the 22nd Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2017.

1. FINANCIAL RESULTS :

Your Directors are happy to report the operational results of the Company for the yearended 31st March 2017 the details of which are as under:

(Rupees in Lakhs)

Particulars 2016-17 2015-16
Gross Income 24777.79 25457.12
Profit/(Loss) Before Interest Depreciation and Exceptional Item 3983.33 1748.60
Finance Charges 2059.75 2344.52
Gross Profit/(Loss) before Depreciation and Exceptional Item 1923.91 (595.92)
Provision for Depreciation 993.66 983.57
Net Profit(Loss) Before Tax and Exceptional Item 929.92 (1579.49)
Exceptional Item 150.47 227.40
Provision for Tax
Net Profit/(Loss) After Tax 1080.39 (1352.09)
Balance of Profit/(Loss) brought forward (13884.97) (12532.88)
Add: Depreciation on transition to schedule II of the
Companies Act 2013 on tangible fixed assets
Balance available for appropriation (12804.58) (13884.97)
Proposed Dividend on Equity Shares
Tax on proposed Dividend
Transfer to General Reserve
Deficit carried to Balance Sheet (12804.58) (13884.97)

REVIEW OF OPERATIONS:

Performance during the financial year 2016-17:

Your Directors are pleased to report that during the year under review the Companycrushed 2.09 Lakh Tonnes of Sugar cane and 2.33 Lakh Quintals of Sugar was produced withan average recovery of 11.12%.

The Company registered a gross turnover of ` 24777.79 Lakhs for the year ended 31stMarch 2017 against ` 25457.12 Lakhs for the year ended 31st March 2016. For the year2016-17 the Company earned profit of ` 3983.33 Lakhs before Interest Depreciation andExceptional item compared to the profit of ` 1748.60 Lakhs for the previous year 2015-16and earned net profit of `1080.39 Lakhs compared to the net loss of `1352.09 Lakhs ofprevious year.

Prospects for the financial year 2017-18:

It is too early to estimate the sugar production for 2017-18 sugar season but goodsowing reports and good water availability are indicating good sugar production for2017-18 season compared to the 2016-17 actual production of 203 lakh tonnes.

2. ALLOTMENT OF 4% SECURED UNLISTED NON-CONVERTIBLE DEBENTURES:

The Company has allotted 4% Secured Unlisted Non-Convertible Debentures (NCD'S) onPrivate Placement basis by way of conversion of outstanding Right of Recompense (ROR)amount of Rs. 695.05 Lakhs payable to the Banks pursuant to the special resolution passedby the shareholders by way of Postal Ballot.

3. CHANGE IN THE NATURE OF BUSINESS IF ANY:

During the period under review and the date of Board's Report there was no change inthe nature of Business of the Company.

4. DIVIDEND:

As the Company has accumulated losses as at 31st March 2017 the Directors could notrecommend dividend on Preference Shares and also on Equity Shares.

5. BOARD MEETINGS:

During the Financial year 2016-17 the Board met 6 (six) times on 20.05.201613.08.2016 29.08.2016 11.11.2016 16.12.2016 and 10.02.2017.

6. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

During the year under review there was an casual vacancy due to demise of Sri. S.Venkataswamy Independent Director of the Company and Mr. Raghuraj Suresh Bhalerao wasappointed as an Independent Director to fill the casual vacancy by the Board of Directorsin their meeting held on 11th November 2016 subject to the approval of shareholders inthe Annual General Meeting.

There was no change in the composition of Key Managerial Personnel.

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).

7. COMMITTEES OF BOARD:

Pursuant to requirement under Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors has constitutedvarious committees of Board such as Audit Committee Nomination and RemunerationCommittee and Stakeholders Relationship Committee. The details of Composition and termsof reference of these committees are mentioned in the Corporate Governance Report.

8. POLICY LAID DOWN BY THE NOMINATION AND REMUNERATION COMMITTEE FOR REMUNERATION OFDIRECTORS KMP & OTHER EMPLOYEES:

Remuneration policy of the Company is performance driven and is structured to motivateEmployees. Recognize their merits and achievements and promote excellence in theirperformance. The Nomination Remuneration and Evaluation Policy of the Company is enclosedas Annexure-I of this report.

Manner in Which Formal Annual Evaluation has been made by the Board of its OwnPerformance and that of its Committees and Individual Directors:

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out evaluation of (i) itsown performance (ii) the directors individually and (iii) working of its Committees. Themanner in which the evaluation was carried out as detailed below:

(a) Nomination & Remuneration Committee: Pursuant to the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Nomination and Remuneration Committee has formulated the criteria for evaluationof directors and evaluated every director. A structured questionnaire was prepared aftertaking into consideration various parameters such as attendance and participation inmeetings monitoring corporate governance practices independence of judgmentsafeguarding the interests of the Company etc. and accordingly the evaluation was made.The Members of the Committee evaluated the individual directors at its meeting held on10.02.2017.

The Nomination and Remuneration Committee decided that since the performance of thedirectors has been excellent it is decided to continue with the term of the directors andManaging Director.

(b) Separate Meeting of Independent Directors: The Independent directors of the Companyat its meeting held on 10.02.2017 (a) reviewed the performance of the Non-Independentdirectors and Board (b) reviewed the performance of the Chairperson of the Company and(c) assessed the quality quantity and timeliness of flow of information between theCompany management and the Board. All the Independent Directors attended the meeting.

A structured questionnaire was prepared after taking into consideration variousparameters such as attendance and participation in meetings monitoring corporategovernance practices independence of judgment safeguarding the interests of the Companyetc. and accordingly the evaluation was made. The Independent directors evaluated theNon-Independent directors.

The Independent Directors decided that since the performance of the Non-IndependentDirectors (including Managing Director) is excellent the term of their appointment becontinued.

The Independent Directors after review of the performance of the Chairperson decidedthat the Chairperson has good experience knowledge and understanding of the Board'sfunctioning and her performance is excellent. The Independent Directors decided that theinformation flow between the Company's Management and the Board is excellent.

(c) Evaluation by Board: The Board has carried out the annual performance evaluation ofits own performance the Directors individually (excluding the director being evaluated)as well as the evaluation of the working of its Committees. A structured questionnaire wasprepared after taking into consideration various aspects of the Board's functioning suchas adequacy of the composition of the Board and its Committees effectiveness indeveloping Corporate Governance structure to fulfill its responsibilities execution andperformance of specific duties etc. The Board decided that the performance of individualdirectors its own performance and working of the committees is excellent.

9. DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively except for the material weakness/deficiency.

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

10. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF

THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:

There are no Companies which have become or ceased to be its Subsidiaries JointVenture or Associate Companies during the year.

11. EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT-9 as a part of this Annual Report in Annexure II.

12. STATUTORY AUDITORS AND THEIR REPORT:

The Auditors M/s. Deloitte Haskins & Sells Chartered Accountants Hyderabadretire at the ensuing Annual General Meeting and they have expressed their unwillingnessfor re-appointment. M/s. MOS & Associates LLP Chartered Accountants are beingappointed for a period of five years from the conclusion of this Annual General Meeting[AGM] till the conclusion of 27th AGM. Your Board of Directors have recommended theappointment of M/s. MOS & Associates based on the recommendation of the AuditCommittee to the members for their approval at the forthcoming Annual general meeting fora term of five years till the conclusion of the 27th AGM.

The Auditors Report to the members of the Company on the financial statements for thefinancial Year ended 31st March 2017 forming part of this report contain a qualifiedopinion on the Internal financial controls over the financial reporting stating thatmaterial weakness has been identified as at March 31 2017 in the Company relating todeficiency in internal financial controls over financial reporting in respect of certaindifferences between subsystems/sub-ledgers with the General Ledger between variousaccounting systems and on assessment of estimating potential liability relating to adisputed matter.

13. SECRETARIAL AUDIT:

As per the provisions of the Section 204(1) of the Companies Act 2013 the Company hasappointed Mr. Y. Koteswara Rao Practising Company Secretary to conduct Secretarial Auditof the records and documents of the Company The Secretarial Audit Report for the FinancialYear ended 31st March 2017 in Form No MR-3 is annexed to the Directors Report as Annexure- III and forms part of this Report. The Secretarial Auditors' Report to the Members ofthe Company for the Financial Year ended March 31 2017 does not contain anyqualification(s) or adverse observations.

14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

OUTGO:

The required information as per Sec. 134(3)(m) of the Companies Act 2013 and Rule 8(3)of Companies (Accounts) Rules 2014 is provided hereunder:

A. Conservation of Energy: i) The steps taken or impact on conservation of energy: a)Harmonic filters were installed to stabilize power supply thereby to improve theefficiency of the mills. b) Steam saving equipment installed to utilize heat energy fromcondensate water and evaporator vapours. ii) Step taken by the Company for utilizingalternate source of energy:

The company doesn't have alternative source of Energy since the Company has Co-genpower facility.

iii) Capital investment on energy conservation equipments:

During the year there was ` 39.50 Lakhs investment on energy conservation equipment.

B. Technology Absorption: i) Efforts made towards Technology Absorption:

DC drives were changed to reduce the Power consumption.

ii) The benefit derived like product improvement cost reduction product developmentor import substitution etc.

Benefit derived by changing the DC drives will be approximately ` 7.5 Lakhs.

iii) Details of Technology imported during the last 3 years reckoned from the beginningof the financial year:

During the period of last three years there was no import of Technology.

iv) Expenditure incurred on Research & Development:

There was no expenditure incurred on Research and Development.

C. Foreign Exchange Earnings and Out Go:
Foreign Exchange Earnings : NIL
Foreign Exchange Outgo : NIL

15. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company's internal control system is aimed at proper utilisation and safeguardingof the Company's resources and promoting operational efficiency. The internal auditprocess reviews the in-system checks covering significant operational areas regularly.

The Company's Audit Committee is responsible for reviewing the Audit Report submittedby the Internal Auditors. Suggestions for improvements are considered and the AuditCommittee follows up on the implementation of corrective actions. The Audit Committee alsoinvites the Statutory and Internal Auditors for regular meetings to ascertain their viewson the adequacy of internal control systems and keeps the Board of Directors informed ofits observations from time to time.

The statutory auditors had a qualified opinion on the Internal financial controls overthe financial reporting stating that material weakness has been identified as at March 312017 in the Company relating to deficiency in internal financial controls over financialreporting in respect of certain reconciliations between various accounting systems and onassessment of estimating potential liability relating to a disputed matter.

The Company uses various subsystems the output from which is being used for accountingin the financial package maintained by the Company. Consequent to certain deficiencies inIT General and Application controls in the software platforms used for financialreporting there were differences in balances between sub-systems / sub- ledgers with thegeneral ledger which have been manually reconciled by the Company. Whilst necessaryadjustment entries were passed in the books of account for the year ended 31st March 2017and these material weakness did not affect on the financial statements except assessmentof estimating the liability on a disputed matter. The management is of the view that theElectricity Duty payable on Captive Consumption is a contingent in nature and no provisionis required to be made.

16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

LOANS:

The Company has not given any loans during the year under review.

GUARANTEES:

After the closure of Financial year and as on the date of Board's Report the Companyhas extended the following guarantees :

Name of the Entity Details
1. Telangana Grameena Bank Corporate Guarantee for the Term Loan up to a limit of ` 1.00 Lakh to each farmer sanctioned to the Cane Growers / Cane Suppliers.
2. Jain Irrigation Systems Limited Corporate Guarantee for ` 0.90 Crs on behalf of the cane suppliers for the purchase of PVC Pipes and Drip Irrigation Equipment by cane suppliers.

The Guarantees given by the Company for availing loans from the Banks is notconsidered since the liability is already appearing in the Books of Accounts.

INVESTMENTS:

The Company has not made any investments during the period under review.

17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report is annexed which forms part of this Report as

Annexure -IV.

18. RISK MANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and developed riskpolicy and procedures to inform Board members about the risk assessment and minimizationprocedures.

19. WHISTLE BLOWER POLICY/VIGIL MECHANISM:

Pursuant to Section 177 of the Companies Act 2013 and the Rules framed there under andpursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theCompany has established a mechanism through which all the stakeholders can report thesuspected frauds and genuine grievances to the appropriate authority. The Whistle BlowerPolicy which has been approved by the Board of Directors of the Company has been hosted onthe website of the Company at http://www.gayatrisugars.com/Investors/CorporateGovernance/Policies.

20. DISCLOSURE AS PER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder theCompany has not received any complaint of sexual harassment during the year under review.

21. CORPORATE SOCIAL RESPONSIBILTY POLICY:

Corporate Social Responsibility pursuant to Section 135 of the Companies Act 2013 isnot applicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy but the Company is involved in some of the social activities like organizing healthcamps providing drinking water facility and fumigation in the nearby villages of thefactories.

22. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

(i) Demand of ` 13881669/- was raised by the Commissioner of Customs Central Excise& Service Tax Hyderabad-1 Commissionarate being the amount equal to 10% or 5% of thevalue of Exempted goods i.e Electricity sold by the company for the period Nov-2006 toDec-2010 in the case of Kamareddy Unit and for the period March-2006 to March-2012 in thecase of Nizamsagar Unit.

Electricity is not an exempted product and as such the provision of rule 6(1) 6(2) and6(3) of CCR 2004 are not applicable. The CENVAT credit availed on common inputs andutilised in the production of Electricity is required to be reversed to the extent of suchinputs / input services utilised in generation of Electricity. Since the company reversedthe CENVAT credit to the extent of such value utilised in electricity generation thedemand under rule 6(1) 6(2) & 6(3) of the CCR 2004 is not sustainable in law in thelight of the judicial decisions by various H'ble tribunals.

The requirement of pre deposit of the balance dues is waived and stay against recoveryis granted during the pendency of the appeal by the Customs Excise & Service TaxAppellate Tribunal (CEASTAT) Bangalore.

23. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The policy on dealing with Related Party Transactions is disseminated on the website ofthe company at http://www.gayatrisugars.com/Investors/ Corporate Governance/Policies.

The details of Related Party Transactions entered by the company in the ordinary courseof business at arms length basis are detailed in the notes forming part of the financialstatements.

24. FIXED DEPOSIT:

Your Company has not accepted or renewed any deposit from public during the year underreview.

25. DISCLOSURE ABOUT COST AUDIT:

As per section 148 of the Companies Act 2013 and rule 14 of the Companies (Audit andAuditors) Rules 2014 Company requires to appoint Cost Auditor. The Board of directorsand the Audit Committee of the Board has approved the appointment of M/s. Narasimha Murthy& Co. as Cost Auditor to audit the cost records of Sugar Power and Distillerydivision of the Company for the financial year 2017-18 the same has been proposed to theshareholders for approval.

26. PARTICULARS OF EMPLOYEES:

Details in respect of remuneration paid to employees as required under Section 197 (12)of the Companies Act 2013 read with Rule 5(2) & (3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended forms part of thisreport. In terms of Section 136 of the Companies Act 2013 the same is open for inspectionat the Registered Office of the Company. Copies of this statement may be obtained by themembers by writing to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are enclosed in Annexure - V and forms part of this Report.

27. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 toBombay Stock Exchange where the Company's Shares are listed.

28. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34 read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A report on Corporate Governance is included as a part ofthis Annual Report as Annexure -VI. Certificate from the practicing Company Secretaryconfirming the compliance with the conditions of Corporate Governance as stipulated underaforesaid regulations is attached to this report.

29. ACKNOWLEDGEMENTS:

Your Directors would like to acknowledge and place on record their sincere appreciationto all stakeholders clients financial institutions Banks Central and StateGovernments the Companies' valued investors and all other business partners for theircontinued co-operation and excellent support received during the year.

Yours Directors recognize and appreciate the efforts and hard work of all the employeesof the Company and their continued contribution to its progress.

For and on behalf of the Board
(T. SARITA REDDY) (T.V. SANDEEP KUMAR REDDY)
Managing Director Vice Chairman
DIN: 00017122 DIN: 00005573
(V.R. PRASAD) (MUNMUN BAID)
Chief Financial Officer Company Secretary &
Compliance Officer

Place : Hyderabad Date : 29th May 2017

ANNEXURE -I

NOMINATION REMUNERATION & EVALUATION POLICY

I. PREAMBLE

Pursuant to Section 178 of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors of every listed Companyshall constitute the Nomination and Remuneration Committee. The Company alreadyconstituted Remuneration Committee comprising of three non-executive Independent Directorsas required under Listing Agreement. In order to align with the provisions of theCompanies Act 2013 and the amended Listing Agreement from time to time the Board on 26May 2014 changed the nomenclature of the "Remuneration Committee" as"Nomination and Remuneration Committee." This Committee and the Policy isformulated in compliance with Section 178 of the Companies Act 2013 read along with theapplicable rules thereto.

II. OBJECTIVE

The Key Objectives of the Committee would be: a) To guide the Board in relation toappointment and removal of Directors Key Managerial Personnel and Senior Management. b)To evaluate the performance of the members of the Board and provide necessary report tothe Board for further evaluation. c) To recommend to the Board on Remuneration payable tothe Directors Key Managerial Personnel and Senior Management.

III. DEFINITIONS

? "Board" means Board of Directors of the Company.

? "Company" means "Gayatri Sugars Limited."

? "Employees' Stock Option" means the option given to the directors officersor employees of a company or of its holding company or subsidiary company or companies ifany which gives such directors officers or employees the benefit or right to purchaseor to subscribe for the shares of the company at a future date at a pre-determined price.

? "Independent Director" means a director referred to in Section 149 (6) ofthe Companies Act 2013.

? "Key Managerial Personnel" (KMP) means

(i) Chief Executive Officer or the Managing Director or the Manager (ii) CompanySecretary (iii) Whole-time Director (iv) Chief Financial Officer and (v) Such otherofficer as may be prescribed.

? "Nomination and Remuneration Committee" shall mean a Committee of Board ofDirectors of the Company constituted in accordance with the provisions of Section 178 ofthe Companies Act 2013 and the Listing Agreement.

? "Policy or This Policy" means "Nomination and RemunerationPolicy."

? "Remuneration" means any money or its equivalent given or passed to anyperson for services rendered by him and includes perquisites as defined under theIncome-tax Act 1961.

? "Senior Management" means personnel of the Company who are members of itscore management team excluding Board of Directors. This would include all members ofmanagement one level below the executive directors including all the functional heads.

IV. INTERPRETATION

Terms that have not been defined in this Policy shall have the same meaning assigned tothem in the Companies Act 2013 Listing Agreement and/or any other SEBI Regulation(s) asamended from time to time.

V. GUIDING PRINCIPLES

The Policy ensures that

? The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully.

? Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and

? Remuneration to Directors Key Managerial Personnel and Senior Management involves abalance between fixed and incentive pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its goals.

VI. ROLE OF THE COMMITTEE

The role of the Committee inter alia will be the following:

? To formulate a criteria for determining qualifications positive attributes andindependence of a Director.

? Formulate criteria for evaluation of Independent Directors and the Board.

? Identify persons who are qualified to become Directors and who may be appointed inSenior Management in accordance with the criteria laid down in this policy.

? To carry out evaluation of every Director's performance.

? To recommend to the Board the appointment and removal of Directors and SeniorManagement.

? To recommend to the Board policy relating to remuneration for Directors KeyManagerial Personnel and Senior Management.

? Ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks.

? To devise a policy on Board diversity.

? To carry out any other function as is mandated by the Board from time to time and /or enforced by any statutory notification amendment or modification as may beapplicable.

? To perform such other functions as may be necessary or appropriate for theperformance of its duties.

VII. MEMBERSHIP

? The Committee shall comprise at least three (3) Directors all of whom shall benon-executive Directors and at least half shall be Independent.

? The Board shall reconstitute the Committee as and when required to comply with theprovisions of the Companies Act 2013 and applicable statutory requirement.

? Minimum two (2) members shall constitute a quorum for the Committee meeting.

? Membership of the Committee shall be disclosed in the Annual Report.

? Term of the Committee shall be continued unless terminated by the Board of Directors.

VIII. CHAIRMAN

? Chairman of the Committee shall be an Independent Director.

? Chairperson of the Company may be appointed as a member of the Committee but shallnot Chair the Committee.

? In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.

? Chairman of the Nomination and Remuneration Committee could be present at the AnnualGeneral Meeting or may nominate some other member to answer the shareholders' queries.

IX. FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such regular intervals as may berequired.

X. COMMITTEE MEMBERS' INTERESTS

? A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.

? The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.

XI. VOTING

? Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.

? In the case of equality of votes the Chairman of the meeting will have a castingvote.

XII. APPOINTMENT AND REMOVAL OF DIRECTOR KMP AND SENIOR MANAGEMENT

? Appointment criteria and qualifications:

1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.

2. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person are sufficient /satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as Managing

Director/Whole-time Director/Manager who has attained the age of seventy years.Provided that the term of the person holding this position may be extended beyond the ageof seventy years with the approval of shareholders by passing a special resolution basedon the explanatory statement annexed to the notice for such motion indicating thejustification for extension of appointment beyond seventy years.

? Term / Tenure:

1. Managing Director/Whole-time Director/Manager (Managerial Person):

The Company shall appoint or re-appoint any person as its Managerial Person for a termnot exceeding five years at a time. No re-appointment shall be made earlier than one yearbefore the expiry of term.

2. Independent Director:

- An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for reappointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.

- No Independent Director shall hold office for more than two consecutive terms butsuch Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for 5 years or more in the Company as on 1October 2014 or such other date as may be determined by the Committee as per regulatoryrequirement he / she shall be eligible for appointment for one more term of 5 years only.

- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company.

? Evaluation:

- The Committee shall carry out evaluation of performance of every Director KMP andSenior Management at regular interval (yearly).

? Removal:

Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director KMPor Senior Management subject to the provisions and compliance of the said Act rules andregulations.

? Retirement:

The Director KMP and Senior Management shall retire as per the applicable provisionsof the Companies Act 2013 and the prevailing policy of the Company. The Board will havethe discretion to retain the Director KMP Senior Management in the same position /remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.

XIII. PROVISIONS RELATING TO REMUNERATION OF MANAGERIAL PERSON KMP AND

SENIOR MANAGEMENT

? General:

1. The rremuneration / compensation / commission etc. to Managerial Person KMP andSenior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required.

2. The remuneration and commission to be paid to Managerial Person shall be as per thestatutory provisions of the Companies Act 2013 and the rules made thereunder for thetime being in force.

3. Increments to the existing remuneration / compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Managerial Person. Increments will be effective from the dateof reappointment in respect of Managerial Person and 1st April in respect of otheremployees of the Company.

4. Where any insurance is taken by the Company on behalf of its Managerial Person KMPand any other employees for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel. Provided that if such person is proved to be guilty the premium paid on suchinsurance shall be treated as part of the remuneration.

? Remuneration to Managerial Person KMP and Senior Management:

1. Fixed pay:

Managerial Person KMP and Senior Management shall be eligible for a monthlyremuneration as may be approved by the Board on the recommendation of the Committee inaccordance with the statutory provisions of the Companies Act 2013 and the rules madethereunder for the time being in force. The break-up of the pay scale and quantum ofperquisites including employer's contribution to P.F pension scheme medical expensesclub fees etc. shall be decided and approved by the Board on the recommendation of theCommittee and approved by the shareholders and Central Government wherever required.

2. Minimum Remuneration:

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managerial Person in accordance with theprovisions of Schedule V of the Companies Act 2013 and if it is not able to comply withsuch provisions with the prior approval of the Central Government.

3. Provisions for excess remuneration:

If any Managerial Person draws or receives directly or indirectly by way ofremuneration any such sums in excess of the limits prescribed under the Companies Act2013 or without the prior sanction of the Central Government where required he / sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company. The Company shall not waive recovery of such sum refundable to it unlesspermitted by the Central Government.

? Remuneration to Non-Executive / Independent Director:

1. Remuneration / Commission:

The remuneration / commission shall be in accordance with the statutory provisions ofthe Companies Act 2013 and the rules made there under for the time being in force.

2. Sitting Fees:

The Non- Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof.

Provided that the amount of such fees shall not exceed the maximum amount as providedin the Companies Act 2013 per meeting of the Board or Committee or such amount as may beprescribed by the Central Government from time to time.

3. Limit of Remuneration/Commission:

Remuneration/Commission may be paid within the monetary limit approved by shareholderssubject to the limit not exceeding 1% of the net profits of the Company computed as perthe applicable provisions of the Companies Act 2013.

4. Stock Options:

An Independent Director shall not be entitled to any stock option of the Company.

XIV. MINUTES OF COMMITTEE MEETING

Proceedings of all meetings #must be minuted and signed by the Chairman of the saidmeeting or the Chairman of the next succeeding meeting. Minutes of the Committee meetingwill be tabled at the subsequent Board and Committee meeting.

XV. DEVIATIONS FROM THIS POLICY

Deviations on elements of this policy in extraordinary circumstances when deemednecessary in the interests of the Company will be made if there are specific reasons todo so in an individual case.

ANNEXURE - II

EXTRACT OF ANNUAL RETURN As on the financial year ended on 31/03/2017

[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the CompaniesManagement and Administration) Rules 2014]

I. REGISTRATION AND OTHER DETAILS:

(i) CIN : L15421TG1995PLC020720
(ii) Registration Date : 15/06/1995
(iii) Name of the Company: Gayatri Sugars Limited
(iv) Category / Sub-Category of the Company Limited by Shares/Indian Non
Company: Government Company
(v) Address of the Registered office and contact details: B2 2nd Floor 6-3-1090 TSR Towers
Rajbhavan Road Somajiguda Hyderabad
Telengana-500082.
(vi) Whether listed company : Yes
(vii) Name Address and Contact details of Registrar and Transfer Agent if any: Venture Capital And Corporate Investments
Private Limited.12-10-167 Bharat Nagar
Hyderabad 500018
Phone : +91 040 23818475/23818476/23868023
Fax : +91 040-23868024

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of thecompany shall be stated:-

Name and Description of main products / services NIC Code of the Product/ service % to total turnover of theCompany
1 Sugar 15421 86.69%

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES :

Name and address of the company CIN/GLN Holding/ Subsidiary/ Associate % of shares held Applicable Section
1 Nil Nil Nil Nil Nil

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding:

Category of Shareholders No. of Shares held at the beginning of the year(01.04.2016) No. of Shares held at the end of the year (31.03.2017) % of Total Shares % of Change during the year
Demat Physical Total % of Total Shares Demat Physical Total
(A) Promoters
(1) Indian
(a) Individual/HUF 13812353 13812353 31.60 13812353 13812353 31.60
(b) Central Govt
(c) State Govt (s)
(d) Bodies Corp. 11228535 11228535 25.69 11228535 11228535 25.69
(e) Banks / FI
(f) Any Other
Sub-Total (A) (1) 25040888 25040888 57.30 25040888 25040888 57.30
(1) Foreign
(a) NRIs - Individuals
(b) Other - Individuals
(c) Bodies Corp.
(d) Banks / FI
(e) Any Other….
Sub-Total (A) (2)
Total Shareholding of Promoter(A) = (A) (1) + (A) (2) 25040888 25040888 57.30 25040888 25040888 57.30
(B) Public Shareholding
(1) Institutions
(a) Mutual Funds
(b) Banks/FI
(c) Central Govt
(d) State Govt (s)
(e) Venture Capital funds
(f) Insurance Companies
(g) FIIs
(h) Foreign Venture
Capital Funds
(i) Others (Specify)
Sub-Total (B)(1)

 

Category of Shareholders

No. of Shares held at the beginning of the year(01.04.2016)

No. of Shares held at the end of the year (31.03.2017)

% of Change during the year
Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares
(2) Non- Institutions
(a) Bodies Corp
i. Indian 9002073 9002073 20.60 8512430 0.00 8512430 19.48 (1.12)
ii. Overseas
(b) Individuals
i. Individual 6587391 34858 6622249 15.15 6296956 28426 6325382 14.47 (0.68)
shareholders holding nominal share capital up to ` 1 lakh
ii. Individual shareholders holding nominal share capital in excess of ` 1 lakh 2761684 25451 2787135 6.38 3641464 3641464 8.33 1.95
(C) Others (Specify)
Non Resident Individuals 28659 28659 0.06 64544 64544 0.15 0.08
Clearing Member 222639 222639 0.51 118935 118935 0.27 (0.24)
Sub-Total (B)(2) 18602446 60309 18662755 42.70 18634329 28426 18662755 42.70 (0.01)
Total Shareholding of 18602446 60309 18662755 42.70 18634329 28426 18662755 42.70 (0.01)
C. Shares held by custodian for GDRs & ADRs
Grand Total(A+B+C) 43643334 60309 43703643 100 43675217 28426 43703643 100 (0.01)

(ii) Shareholding of Promoters:

Shareholding at the beginning of the year (01.04.2016) Shareholding at the end of the year (31.03.2017) % of Change during the Year
Shareholders No. of Shares Name % of total Shares of the company % of Shares Pledged/ encumbered to total shares No. of Shares % of total Shares of the Company % of Shares Pledged encumbered to total shares
1 Gayatri Projects Limited 1163607 2.66 1163607 2.66
2 Gayatri Fin-holdings Pvt Ltd 7169450 16.40 7169450 16.40
3 T.S.R. Holdings Pvt Ltd 2895478 6.63 2895478 6.63
4 Subbarami Reddy Tikkavarapu 3255814 7.45 3255814 7.45
5 Sandeep Kumar Reddy Tikkavarapu 6763031 15.47 9.72 6763031 15.47 9.72
6 Indira Subbaramireddy Tikkavarapu 3793508 8.68 8.35 3793508 8.68 8.35
Total 25040888 57.30 18.08 25040888 57.30 18.08

(iii) Change in Promoters' Shareholding (please specify if there is no change):

Shareholding at the beginning of the year

Cumulative Shareholding during the year

Particulars No. of % of total shares No. of % of total shares
shares of thecompany shares of thecompany
At the beginning of the year 25040888 57.30 25040888 57.30
Date wise Increase /Decrease There is no Increase/Decrease in the promoters' shareholding during the year. in PromotersShare holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer /bonus/ sweat equity etc):
At the End of the year 25040888 57.30 25040888 57.30

(iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs):

For Each of the Top 10 Shareholders Shareholding at the beginning of the year (01.04.2016) Cumulative Shareholding during the year (at the end of the year 31-03-2017)
No. of shares of total % shares of thecompany No. of shares % of total shares of thecompany

1. Mohan Project Contractors Private Limited At the beginning of the year

7695789 17.61 7695789 17.61

Date wise increase / Decrease in Share holding during the Year specifying the reason:

Date Transactions(sales/ Reason
purchase)
08/04/2016 (3000) Sale 7692789 17.60
27/05/2016 (30000) Sale 7662789 17.53
07/10/2016 (35000) Sale 7627789 17.45
14/10/2016 (30000) Sale 7597789 17.38
21/10/2016 (50000) Sale 7547789 17.27
04/11/2016 (25000) Sale 7522789 17.21

At the End of the year (or on the date of separation if separated during the year)

7522789 17.21

2. Marg Biotech Private Limited At the beginning of the year

920023 2.11 920023 2.11

Date wise increase / Decrease in Share holding during the Year specifying the reason:

Date Transactions (sales/ purchase) Reason
22/04/2016 29981 Purchase 950004 2.17
20/05/2016 (44877) Sale 905127 2.07
27/05/2016 (184052) Sale 721075 1.65
21/10/2016 (721075) Sale

3 At the End of the year (or on the date of separation if separated during the year) Hetal Vinesh Patel

At the beginning of the year

277014 0.63 277014 0.63

 

Date wise increase / Decrease in Share holding during the Year specifying the reason:

Date Transactions (sales/
purchase) Reason
13/01/2017 (11014) Sale 266000 0.61
20/01/2017 (70000) Sale 196000 0.45

 

03/02/2017 (30000) Sale 166000 0.38
10/02/2017 (60000) Sale 106000 0.24
17/02/2017 (9830) Sale 96170 0.22
24/03/2017 (69006) Sale 27164 0.06
31/03/2017 (27164) Sale

 

At the End of the year (or on the date of separation if separated during the year)
4 Lalitha Rajesh Ranka At the beginning of the year No increase / Decrease in Share holding during the Year. 140391 0.32 140391 0.32
At the End of the year (or on the date of separation if separated during the year) 140391 0.32
5 Utkarsh Manoharlal Maloo At the begining of the year Date wise increase / Decrease in Share holding during the Year specifying the reason: 131776 0.30 131776 0.30

 

Date Transactions(sales/ purchase) Reason
27/05/2016 (50000) Sale 81776 0.19
01/03/2017 (15800) Sale 65976 0.15
At the End of the year (or on the date of separation if separated during the year) 65976 0.15
6 Devang Rasiklal Dagli At the beginning of the year 100000 0.23 100000 0.23
Date Transactions(sales/ purchase) Reason
30/09/2016 (100000) Sale
At the End of the year (or on the date of separation if separated during the year)
7 Sandhya Ashokkumar Dhoot At the beginning of the year 76817 0.18 76817 0.18
Date wise increase / Decrease in Share holding during the Year specifying the reason:
Date Transactions (sales/ purchase)
Reason
15/04/2016 54601 Purchase 131418 0.30
29/04/2016 500 Purchase 131918 0.30
06/05/2016 3252 Purchase 135170 0.31
13/05/2016 1558 Purchase 136728 0.31
20/05/2016 (1) Sale 136727 0.31
04/11/2016 (100) Sale 136627 0.31
06/01/2017 28250 Purchase 164877 0.38
13/01/2017 2500 Purchase 167377 0.38
At the End of the year (or on the date of separation if separated during the year) 167377 0.38

 

8 SSJ Finance & Securities Pvt. Ltd
At the beginning of the year 65868 0.15 65868 0.15
Date wise increase / Decrease in Share holding during the Year specifying the reason: Date Transactions (sales/ purchase) Reason
09/09/2016 (198) Sale 65670 0.15
04/11/2016 (49699) Sale 15971 0.04
At the End of the year (or on the date of separation if separated during the year) 15971 0.04
9 Mitee Amitkumar Shah At the beginning of the year 64800 0.15 64800 0.15
Date wise increase / Decrease in Share holding during the Year specifying the reason: Date Transactions (sales/ purchase) Reason
27/05/2016 (2000) Sale 62800 0.14
At the End of the year (or on the date of separation if separated during the year) 62800 0.14
10 Jatin Ramesh Shah
At the beginning of the year 61269 0.14 61269 0.14
Date wise increase / Decrease in Share holding during the Year specifying the reason: Date Transactions(sales/ Reason
purchase)
08/04/2016 7766 Purchase 69035 0.16
13/05/2016 1500 Purchase 70535 0.16
20/05/2016 1000 Purchase 71535 0.16
02/12/2016 2000 Purchase 73535 0.17
27/01/2017 1300 Purchase 74835 0.17
At the End of the year (or on the date of separation if separated during the year) 74835 0.17

(v) Shareholding of Directors and Key Managerial Personnel:

For Each of the Directors and KMP

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares of total % shares of thecompany No. of shares % of total shares of thecompany
At the beginning 1.TV. Sandeep Kumar Reddy 6763031 15.47 6763031 15.47
of the year 2.T. Indira Subbarami Reddy 3793508 8.68 3793508 8.68
3. V.R. Prasad 25451 0.06 25451 0.06

Date wise Increase/ Decrease in Promoters Share holding during the year specifying thereasons for increase / decrease (e.g. allotment / transfer /bonus/ sweat equity etc):

At the End of the year

There is no Increase/Decrease in the Directors shareholding during the year. FurtherMr. V.R. Prasad (CFO) has bought 6353 shares and sold 25000 shares during the financialyear.

Mr. V.R. Prasad
Date Transactions(sales/ purchase) Reason
30/04/2016 6353 Purchase
07/10/2016 25000 Sale

 

1.TV.Sandeep Kumar Reddy 6763031 15.47 6763031 15.47
2.T.Indira Subbarami Reddy 3793508 8.68 3793508 8.68
3. V.R. Prasad 6804 0.01 6804 0.01

V. INDEBTEDNESS:

Indebtedness of the Company including interest outstanding/accrued but not due forpayment (Amount ` in Lakhs)

Secured Loans excluding deposits Unsecured Loans Total Deposits Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 14785.16 2259.85 17045.01
ii) Interest due but not paid 1332.64 1332.64
iii) Interest accrued but not due 399.05 339.05
Total (i+ii+iii) Change in Indebtedness during the financial year 16516.85 2259.85 18776.70
Addition 695.05 695.05
Reduction 2028.27 2028.27
Net Change (1333.22) (1333.22)
Indebtedness at the end of the financial year
i) Principal Amount 13665.22 2259.85 15925.07
ii) Interest due but not paid 1242.81 1242.81
iii) Interest accrued but not due 275.60 275.60
Total (i+ii+iii) 15183.63 2259.85 17443.48

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director Whole-time Directors and/or Manager:

(Amount ` in Lakhs)

Name of Managing Director Total Amount
Particulars of Remuneration T.SARITA REDDY
1 Gross salary
(a) Salary as per provisions contained in section 27.00 27.00
17(1) of the Income-tax Act 1961
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 11.63 11.63
(c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 2 Stock Option
3 Sweat Equity
4 Commission - as % of profit - others specify…
5 Others please specify
Provident Fund Contribution 3.24 3.24
Total (A) 41.87 41.87
Ceiling as per the Act 84.00

B. Remuneration to other Directors: (Amount ` in Lakhs)

Particulars of Name of TR Rajagopalan Directors S Venkataswamy J N Karamchetty Total Amount
Remuneration
1.Independent Directors
• Fee for attending board / 0.22 0.03 0.22 0.47
committee meetings
• Commission
• Others please specify
Total (1) 0.22 0.03 0.22 0.47
T Indira Subbarami Reddy T V Sandeep Kumar Reddy Raghuraj Suresh Bhalerao
2. Other Non-Executive
Directors
• Fee for attending board / 0.18 0.08 0.15 0.41
committee meetings
• Commission
• Others please specify
Total (2) 0.18 0.08 0.15 0.41
Total (B) = (1)+(2) 0.88
Total Managerial Remuneration 0.88
Overall Ceiling as per the Act

C. Remuneration to other Directors key managerial personnel other than MD/MANAGER/ WTD:(Amount ` in Lakhs)

Particulars of Remuneration

Key Managerial Personnel

CEO CS CFO Total
(a) Salary as per provisions contained in 3.70 17.15 20.85
section 17(1) of the Income-tax Act 1961
(b) Value of perquisites u/s 17(2)
Income-tax Act 1961
(c) Profits in lieu of salary under section
17(3) Income-tax Act 1961
2 Stock Option
3 Sweat Equity
4 Commission- as % of profit- others specify…
5 Others please specify
Total (A) 3.70 17.15 20.85

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of theCompanies Brief Details of Penalty / Punishment/ Compounding fees imposed Description Authority [RD /NCLT/ COURT] Appeal made if any(give Details)
Act
Penalty
Punishment
Compounding
C. OTHER OFFICERS

L

IN DEFAULT

I

N

Penalty
Punishment
Compounding

 

For and on behalf of the Board
(T. SARITA REDDY) (T.V. SANDEEP KUMAR REDDY)
Managing Director Vice Chairman
DIN: 00017122 DIN: 00005573
(V.R. PRASAD) (MUNMUN BAID)
Chief Financial Officer Company Secretary &
Compliance Officer
Place: Hyderabad
Date: 29th May 2017