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Davangere Sugar Company Ltd.

BSE: 543267 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE179G01011
BSE 00:00 | 04 Oct 39.95 1.40
(3.63%)
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NSE 05:30 | 01 Jan Davangere Sugar Company Ltd
OPEN 36.70
PREVIOUS CLOSE 38.55
VOLUME 1021
52-Week high 43.85
52-Week low 15.16
P/E 40.35
Mkt Cap.(Rs cr) 376
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 36.70
CLOSE 38.55
VOLUME 1021
52-Week high 43.85
52-Week low 15.16
P/E 40.35
Mkt Cap.(Rs cr) 376
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Davangere Sugar Company Ltd. (DAVANGERESUGAR) - Director Report

Company director report

Dear Members

The Directors have pleasure in presenting the 50th (Fiftieth) Annual Report togetherwith Audited Financial Statements for the year ended 31st March 2021.

We as the Directors of your Company are very eager to announce the Company's affairsduring the operating year 2020-21. We are presenting before you the significantinformation as per the requirements of Section 134 of the Companies Act 2013.

STATE OF COMPANY'S AFFAIRS 2020-21: Crushing Operations and Sugar Produced:

The Crushing Operations were commenced from 08.10.2020 and closed on 10.02.2021 andyour Company crushed 331712.00 MTs of sugarcane during the Financial Year 2020-21 andcrushing operations were conducted for 126 days. During the previous financial year2019-20 company conducted crushing operation days for 117 days..

Year Sugarcane Crushed (MTs) Sugar Produced (Qtls) Recovery ( % )
2020-21 331712 311462 9.48%
2019-20 326210 293660 9.00%
2018-19 436176 411450 9.45%
2017-18 141225 121500 8.50%

The Company is anticipating good crushing during the ensuing season due to more numberof farmers have diverted from paddy to sugarcane growing due to introduction of new highyield variety sugarcane VCF-0517 (expected yield between 80 MTs to 110 MTs) which resultsin availability of more sugarcane for crushing during the ensuing season 2021-22. TheCompany expects to crush at least 535000 MTs of sugarcane during the coming season2021-22. In the coming season company expects coverage of more and more land undersugarcane plantation so that the company can achieve the target crushing of sugarcane upto 745000 MTs in couple of years.

Area covered under sugarcane cultivation:

The management is making continuous and sincere efforts of bringing more and more landunder sugarcane cultivation. The following are the figures of areas of actual sugar canecultivation in the last four years and the estimation for the ensuing year.

Year Area under sugarcane cultivation (in acres)
2017-18 5282
2018-19 12796
2019-20 8489
2020-21 8580
2021-22 (estimated for ensuing year) 10120

Export of Sugar & Molasses :

During the FY 2020-21 the company has exported sugar and molasses as follows :

Sl. No. Product Amount Rs. Quantity
1 Sugar 217241860 2778.74 Qtls
2 Molasses 93631479 7443.33 Mts

Co-gen and Power Export :

Co-gen and Power Export Company is having a Co-gen power plant having an installedcapacity of 24 MWs. During the Financial Year 2020-21 the Company has generated 44500800units of power and has exported 30892800 units of power to ESCOMS compared to previousyear export of 29619600 units. The Company has imported 921600 units of power from KPTCLduring the year under review compared to previous year's import of 904800 units of power.The Co-gen unit has worked for 126 days during the year 2020-21 against 120 days duringprevious year 2019-20.

MANAGEMENT DISCUSSION AND ANALYSIS SUGAR INDUSTRY OVERVIEW SECTOR OUTLOOK :

The sector has seen a turnaround from being a cyclical to a structural growth sectorbacked by government's aggressive ethanol blending programme. In the current ethanolprocurement cycle OMCs would be procuring more than 300 crore litre of ethanol vs. 180crore litre last year which is closer to 8% blending levels. We believe more than 15%blending levels would help the sugar industry to divert 6 million tonnes (MT) of excesssugar produced every year. With aggressive distillery capacity addition in India ourcoverage sugar companies would see strong earnings growth over the next three years.

With the massive increase in distillery capacities by sugar companies ethanol salesare likely to double for most of our coverage companies. We believe ethanol sales wouldcontribute 25-30% to revenues of major sugar companies by FY24. Moreover reducing sugarinventories in the system are likely to push domestic sugar prices upwards.

IMPACT COVID-19 :

The outbreak of COVID-19 pandemic globally and in India has caused significantdisturbance and slowdown of economic activities throughout India. The nationwide lockdownordered by the Government of India w.e.f. 24th April 2021. There was no major impact oflock down on sugarcane crushing since the crushing operations were completed by10.02.2020.

Our company falls under the production of Essential Commodity i.e. sugar under theEssential Commodities Act and hence it was permitted to continue the working of theCompany under the Notification of the State Government.

GOVERNMENT MEASURES :

The Government set an ambitious target of ethanol blending and increased the:procurement price of ethanol across all feedstocks. Contracts for 303 crore ltrs weresigned the increase auguring well for the industry. The season 2020-21 witnessed moresugar units producing ethanol from B Heavy molasses and some sugar units directly fromsugarcane juice. The real transformation is expected from SS 2022- 23 onwards when moresugar companies produce ethanol directly from sugarcane juice resulting in a substantialsacrifice of sugar production that moderates the problem of surplus sugar production.

Thanks to the export initiative embarked up on by the central government sugar stocksat the end of the SS are estimated at around 9 million tonnes. From a high of 14.6 milliontonnes at the close of SS 2019-20 the decline represents a creditable improvement. Theethanol blending program played a role although its importance will be increasinglyvisible in the years to come when the increased utilization of sugarcane juice / syrup forethanol manufacture could result in an increased sacrifice of sugar production and amoderated domestic sugar balance.

POWER

Cogeneration of Power: On 28th June 2019 Ministry of Power Government of India issuedan order directing Regional Load Despatch Centres (RLDC) and State Load Despatch Centres(SLDC) to open Letter of Credit (LC) in favour of power generating companies for theagreedquantumof powersupply.Theorder provides for encashment for LCbythegeneratingcompanyafterthe agreed credit period of 45 or 60 days as the case may be. This was a welcome move bythe GOI to facilitate timely collection of debtors which has come into effect from01.08.2019.

MANAGEMENT OUT LOOK FOR 2021-22

The Management believes its policy of continuous effort to produce the high quality ofwhite sugar through adoption of modern & advanced technology from time to time. Itbelieves in team effort of all people who are directly and indirectly working with theCompany as one family. It strongly believes in "give and take policy" that ismore production & more efficiency means more rewards.

ETHANOL

A policy push from the Government of India (GOI) towards Ethanol Blending Programme(EBP) While the programme initially targeted a 10% blending of petrol with the biofuel by2022 later the target was enhanced to achieve 20% ethanol blending with petrol by 2030.The management of our Company has taken steps towards commissioning of 65 KLPD capacity ofEthanol Plant within factory premises by adopting ZLD technology.The cost of project isestimated to be Rs. 99.00 crore. Term loan for the project has already been got sanctionedfrom State Bank of India Canara Bank Indian Bank and Davangere District CentralCooperative Bank as to the extent of Rs. 64.34 crore.

The company has already placed order for construction of Ethanol plant to differentvendor and management is expected to start commercial production from January 2022.

The Company is also planning to produce Extra Neutral Alcohol (ENA) and sanitizer theoutbreak of COVID 19 has exposed the fragility of life. There have been casualties galoreacross the Globe which in-turn demanded practicing the highest standards of hygiene haveemerged as the only viable options to break the chain of this virus. Based on the W.H.O.recommended formula using 80% Ethyl Alcohol Sanitizers are recommended for daily use andare capable of fighting germs up to 99.9%.

SUGAR CANE PLANTATION

Company is constantly endeavoring to increase sugar cane cultivation area along withhigh yield sugar cane plantation this has resulted into successful implementation ofpilot project which carried in the year 2018-19 and 2019-20 with VCF 0517 variety ofsugarcane which has yielded 90 to 110 ton of sugar cane per acre against average yield oftraditional sugarcane of 35 MTs to 50 Mts. This has motivated majority of the farmers foradopting VCF 0517 variety for the planting season 2020-21. The Company is expected tocover a land area of about 6000 acres under the new variety of VCF 0517 sugarcane.

FINANCIAL RESULTS

The financial results for the year ending 31st March 2021 are summarized below :

Rs. In Lakhs

Particulars Current Year 2020-21 Previous Year 2019-20
1. Revenue from operations (Gross) 14452.78 20284.71
2. Other Income 328.39 21.51
3. Total 14781.17 20306.22
4. Cost of Material Consumed 9236.88 9504.31
5. Operating Expenses 760.58 775.79
6. Changes in inventories of finished goods 652.22 5330.06
7. Other expenses 1270.50 1360.94
8. Profit before depreciation and financial expenses 1209.30 3335.12
9. Financial cost 1651.66 2174.32
10. Depreciation and amortization 887.60 899.47
11. Profit before exceptional and extraordinary items 321.69 261.32
12. Exceptional & Extraordinary Expenses - -
13. Profit before tax 321.69 261.32
14. MAT proivision 58.80 43.56
15. Deferred tax 12.96 10.83
16. Profit/Loss for the year 249.92 206.93

DIVIDEND : No dividend was recommended in order to conserve resources for the currentyear.

TRANSFER TO RESERVES

Your Directors do not propose to carry any amount to reserves of the Company.

CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY

There is no change in the nature of business carried on by the Company during the saidfinancial year.

MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR :

During the period after the end of the financial year of the company and before thedate of the report there are no material changes and commitments which affect thefinancial position of the company.

SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATOR COURTS AND TRIBUNALS :

During the year there are no significant and material orders passed by the Regulatorsor Courts or Tribunals which impact the going concern status and company's operations infuture.

COST AUDITOR :

Pursuant to the provisions of Section 148 of the Companies Act 2013 and rules madethereunder the Board on the recommendation of the Audit Committee has re-appointed Mr.Krishna Murthy Cost Accountants (Firm Regn No. 000019) as Cost Auditors to conduct costaudits relating to sugar electricity and industrial alcohol for the year ended 31stMarch 2021. The Cost Accountants have confirmed that their appointment is within thelimits of Section 141(3)(g) of the Act and free from any disqualifications specified underSection 141(3) and proviso to Section 148(3) read with Section 141(4) of the CompaniesAct 2013.

MEETINGS OF THE BOARD

20 (Twenty) meeting of the Board of Directors were held during the year on followingdates :

Sl. No. Date of Board meeting Sl. No. Date of Board meeting
1 04-04-2020 11 28-10-2020
2 05-05-2020 12 23-12-2020
3 25-05-2020 13 30-12-2020
4 06-06-2020 14 14-01-2021
5 04-07-2020 15 22-02-2021
6 10-07-2020 16 08-03-2021
7 25-08-2020 17 22-03-2021
8 04-09-2020 18 23-03-2021
9 08-09-2020 19 24-03-2021
10 23-10-2020 20 31-03-2021

The Board of Directors duly met 20 (Twenty) times on the above dates during thefinancial year 2020-21. The intervening gap between any two meetings was within the periodprescribed under the provisions of section 173 of the Companies Act 2013. The number ofBoard Meetings attended by each of the Directors of the Company held during the financialyear 2020-21 as required under clause - 9 of SS -1 – Secretarial Standard on Meetingsof the Board of Directors issued under section 118(10) of the Companies Act 2013.Particulars of employees and related information: -

In terms of the provision of Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementcontaining the disclosures pertaining to remuneration and other details as required underthe Act and the above rules are provided in Annexure-IV.

Directors and Key Managerial Personnel: -

During the year there is no change in Director and Key Managerial Personnel.

During the year 2020-21 the board of directors consists of

Sl. No. Name Designation Releationship
1 Sri Shamanur Shivashankarappa Ganesh Managing Director -
2 Sri Abhijith Ganesh Shamanur Executive Director Son of M.D.
3 Smt. Rekha Ganesh Director Wife of M.D.
4 Sri Tumbegere Rudrappa Independent Director -
5 Sri Thappagondanahally Rajashekarappa Independent Director -
Sl. No. Name of the Director Number of Board Meetings attended during the financial year 2020-21
1 Sri S.S Ganesh 20
2 Sri Abhijith Ganesh Shamanur 20
3 Smt. Rekha Ganesh 18
4 Sri Rudrappa Tumbegere 15
5 Sri Thappagondanahalli Rajashekarappa 15

As on March 31st 2021 key managerial personnel consists of

Sl.No. Name of the Director Number of Board Meetings attended Designation
1 Sri Shamanur Shivashankarappa Ganesh Managing Director
2 Mr Arun Kumar N M Chief Financial Officer (CFO)
3 Smt. Pooja M M Compliance Officer (CO)

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has constituted Nomination and Remuneration Committee which has beenentrusted with the responsibility to formulate the criteria for determiningqualifications positive attributes and independence of Directors and recommends to theBoard a policy relating to remuneration for Directors Key Managerial Personnel and otheremployees.

COMPOSITION OF COMMITTEES

a. AUDIT COMMITTEE
Chairman Sri. Rudrappa Tumbegere Independent Director
Other Members Sri Abhijith Ganesh Shamanur Executive Director
Sri T. Rajashekarappa Independent Director
b. NOMINATION AND
REMUNERATION COMMITTEE
Chairman Sri T. Rajashekarappa Independent Director
Other Members Sri. Rudrappa Tumbegere Independent Director
Smt. Rekha S Ganesh Non-executive Director
c. SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE
Chairman Sri. Rudrappa Tumbegere Independent Director
Other Members Sri. T. Rajashekarappa Independent Director
Smt. Rekha S Ganesh Non-executive Director
d. CORPORATE SOCIAL
RESPONSIBILITY COMMITTEE
Chairman Sri. Rudrappa Tumbegere Independent Director
Other Members Sri T. Rajashekarappa Independent Director
Smt. Rekha S Ganesh Non-executive Director

Corporate Social Responsibility

Corporate Social Responsibility Committee meeting was held on 09th January 2020. Thecommittee has observed that the company is contributing regularly to Davangere SugarCompany Education Society (Regd.) which is running schools for the benefit of children ofpoor farmers residing in the villages surrounding the factory area. The Company is alsospending money every year on promoting sports among the rural youths. The Company is alsodistributing note books and uniforms to the poor children of the village. During theFinancial Year 2020-21 the Company has spent Rs. 486200 for the purpose of education andother charitable activities. During the last six years the Company has spent total amountof Rs. 2849104/- towards discharging the Corporate Social Responsibility.

The calculation for CSR contrbution is provided below :

Financial year Net profit / (loss) (Rs.)
2020-21 24992829
2019-20 20692639
2018-19 32221299

Even though the provision of section 135 of the company act is not applicable thecompany is spending the money on CSR activities of providing free education to poorchildren promoting sports activities and drinking water to rural poor people.

VIGIL MECHANISM

The Vigil Mechanism acts as an additional internal element of the Company's complianceand integrity policies. All employees directors vendors suppliers dealers andconsultants including auditors and advocates who are associated with the Company canraise concerns regarding malpractices and may negatively impact the Company. VigilMechanism has been established under the supervision of the Deputy Financial Officer(DCFO) of the Company. The Audit Committee and the DCFO reviews the working of the VigilMechanism from time to time and make suggestions if needed. The Vigil protects thewhistleblower against victimization for the disclosure made by him/her and ensurescomplete confidentiality of the whistleblower's identity and the information provided byhim/her.

The investigation is conducted honestly neutrally and in an unbiased manner. Thesubject or other involved persons in relation with the protected disclosure are also givenan opportunity to be heard. Strict disciplinary actions are taken against anyone whoconceals or destroys evidences related to protected disclosures made under this mechanism.The Vigil Mechanism policy also provides for direct access to the chairperson of the AuditCommittee in appropriate or exceptional cases.

CORPORATE GOVERNANCE

As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015 a report on Corporate Governance together with the Auditors Certificateregarding compliance of the conditions of corporate governance is provided under AnnxureII

DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors in terms of Section 134(3) (c ) states that:

In the Preparation of the annual accounts for the year ended 31st March 2021 theapplicable accounting standards have been followed along with proper explanation relatingto material departures; a. The Directors have selected such Accounting Policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the Profits and Loss of the Company for that year.

b. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities. c. The Directors have prepared the accounts for the financial year ended31st March 2021 on a "going concern" basis. d. The directors have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.

PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BYTRUSTEES FOR THE BENEFIT OF EMPLOYEES:-

During the year company has not made any Provision of money for purchase of its ownshares by employees or by trustees for the benefit of employees.

CHANGE IN SHARE CAPITAL

During the year the company has increased its authorized capital from Rs.600000000/- to Rs. 1000000000/- crores wide extraodinary meeting Resoultion dated30th June 2021 divided into 10000000 Equity Shares of Rs. l0/- each and the Paid upCapital being Rs. 556844620/- divided into 55684462 Equity Shares is the same asopening balance in the beginning of the year and as closing balance at the end of theyear. There is no change in Share Capital of the Company during the FY 2020-21.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 is furnished in Annexure-Iis attached to this Report.

FORMAL ANNUAL EVALUATION

The Company is covered under Section 134(3)(p) read with Rule 8(4) of the Companies(Accounts) Rule 2014. Accordingly formal annual evaluations of performance of BoardCommittees and individual directors have been conducted by the Nomination &Remuneration Committee in the following manner.

The evaluation is done internally. The evaluation is done on the basis of inputsreceived from the directors regarding the performance of board & committees as a wholeand also of director in individual capacity. Specific inputs have been collected fromIndependent Directors regarding performance of Managing Director and Whole-time Director.

Broad parameters for board performance have been the efficiency to guide the Company inits core business operation Supplementary parameter is exploring opportunities forbringing new business opportunities for the company. Specific parameter for ManagingDirector and Whole-time Director is achievement of targets on the core business. Specificparameter for independent directors and other non-executive directors is attendance atboard/committee meetings and providing independent judgments on the board decisions.Specific parameter for committees is execution of their terms of reference.

SUBSIDIARY COMPANIES

There is no Subsidiary / Joint Ventures or Associate Company.

RISK MANAGEMENT

The RISK MANAGEMENT POLICY is in compliance with Section 134(3)(n) of the CompaniesAct 2013 which requires the Company to lay down procedures for risk assessment andprocedure for risk minimization. The main objective of this policy is to ensuresustainable business growth with stability and to promote a pro-active approach inreporting evaluating and resolving risks associated with the business. In order toachieve the key objective the policy establishes a structure and disciplined approach toRisk Management in order to guide decisions on risk related issues.

The Board ensures that all the current and future material risk exposures of thecompany are identified assessed quantified appropriately mitigated minimized andmanaged i.e. to ensure adequate systems for risk management. The Company enablescompliance laws and regulations wherever applicable through the adoption of bestpractices.

The Board of Directors of the Company and the Audit Committee periodically reviews andevaluates the risk management system of the Company so that the management controls therisks through defined network. Head of Departments are responsible for implementation ofthe risk management system as may be applicable to their respective areas of functioningand they report to the Board and Audit Committee when circumstances require.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of the programme for familiarization of the Independent Directors with theCompany in respect of their roles rights responsibilities in the Company nature of theindustry in which company operates business model of the Company and related matters havein place.

POLICY FOR DETERMINING MATERIAL SUBSIDIARY

Not applicable to Company

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars and details of loans given investments made or guarantees given andsecurities provided if any are given in the Notes to the Financial Statements.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Amit R. Dadheech & Associates (firm) Mumbai as Company Secretaries inPractice (CP No. 8952) to undertake the Secretarial Audit of the Company for the year2020-21. The Secretarial Audit Report is annexed herewith in Form MR-3 & same ismarked as Annexure – III.

INTERNAL FINANCIAL CONTROL:

The Company has in place adequate internal financial controls with reference tofinancial statements. There are sound internal controls commensurate with nature and sizeof the company that have been incorporated in the Policy to detect the financialdiscrepancies well in time. Key policies are defined understood and enforced. Operatingprocedures are clearly defined; detailed and harmonized procedures are available acrossthe organization. Several controls are preventive in nature and automated. Allstakeholders are aware of their roles and responsibilities with respect to processes andcontrols.

The culture of compliance with laid down guidelines and procedures is evident thoughthe actions and behavior of individuals and teams. The Management Information Systemensures that adequate and accurate information is available for reporting and decisionmaking. The Audit committee also evaluates the operating effectiveness of InternalFinancial Control system.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION :

Particulars with respect to conservation of energy pursuant to rule 8 (3) of theCompanies (Accounts) Rules 2014 are given in Annexure-V.

DEPOSITS

The Company has not accepted deposits either from members or public within the meaningof section 73 or 76 of Companies Act 2103 read with Rules made thereunder.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered during the financial year were in the ordinarycourse of business and at arm's length basis. There were no materially significant RelatedParty Transactions with the Company's Promoters Directors Management or their relativeswhich could have a potential conflict with the interests of the Company. Transactions withrelated parties entered by the Company in the normal course of business are periodicallyplaced before the Audit Committee for its omnibus approval and the particulars ofcontracts entered during the year as required to be provided under Section 134(3)(h) ofthe Companies Act 2013 are disclosed in Form AOC-2.

AUDITORS OF THE COMPANY

During the financial year 2020-21 on March 12021 Mr B Gangadhara of M/s. B Gangadhara& Co. Chartered Accountants as the Statutory Auditor of the company has resigned fromthe position of statutory auditor. Board of directors of the company has appointed M/s D GM S Chartered Accountants in order to fill up casual vacancy in the board meeting held on15-03-2021 the auditor appointment was subsequently regularized in an extraordinarygeneral meeting of the company held on June 30th 2021.

COST AUDITORS

Mr. M.R. Krishna Murthy Bangalore have been appointed as Cost Auditors of the Companyas per the provisions of Section 148(1) of the Act.

LISTED IN THE BOMBAY STOCK EXCHANGE LTD.

The Company has listed its secutries in the Bombay Stock Exchange with the effect from19th March 2021.

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most importantassets. We focus on all aspects of the employee lifecycle. This provides holisticexperience for the employees as well. During their tenure at the Company employees aremotivated through various skill development programs. We create effective dialogue throughour communication channels to ensure effective dialogue through our communication channelsto ensure that feedback reach the relevant team including leadership.

Your Company continuously invests in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.

SUMMARY OF COMPLAINTS RECEIVED AND DISPOSED OFF DURING EACH CALENDAR YEAR AS REQUIREDUNDER THE PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013 AND DISCLOSURE THAT THE COMPANY HAS IN PLACE AN ANTI SEXUALHARASSMENT POLICY IN THE LINE WITH THE REQUIREMENTS OF THE ACT AND THAN AN INTERNALCOMPLAINTS COMMITTEE HAS BEEN SET UP FOR REDRESSAL OF COMPLAINTS AND THAT ALL EMPLOYEES(PERMANENT CONTRACTUAL TEMPORARY TRAINEES) ARE COVERED UNDER THE POLICY

Your Board of Directors report that during the year under report Anti Sexual HarassmentPolicy in line with the requirement of Workplace (Prevention Prohibition and Redressal)Act 2013 is in place and has complied with the constitution of Internal ComplaintsCommittee under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and further the employees have been advised to address theirgrievances under this Act to the Working Director of the Company for redressal.

1. Number of complaints received during the year : NIL

2. Number of complaints Pending : NIL

3. Number of resolved : NIL

COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS BY THE COMPANY

Your Directors report that during the year under report the Company has complied withthe applicable clauses of Secretarial Standards issued by the Institute of CompanySecretaries of India and approved by the Government of India under sub-section (10) ofsection 118 of the Companies Act 2013.

MAINTENANCE OF COST RECORDS

Your Directors report that maintenance of cost records specified by the centralGovernment pursuant to the provisions of sub-section (1) of section 148 of the CompaniesAct 2013 are applicable to the Company and the Company has maintained the prescribedaccounts and cost records during the financial year under report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review.

a) Issue of equity shares;

b) Company has issued Corporate Guarantee to the Harvesting & Transport (H&T)farmers contractors to facilitate borrowing from Canara Bank to the extent of Rs. 29.00crores and Rs. 7.98 Crore from State Bank of India. These farmers contractors facilitateharvesting and transportation of sugarcane from the fields of the farmers to the Companywhich is very important from the point of view of procurement of sugarcane for business ofthe Company. Company does not assign contract or work order to H & T contractors.Farmers are assigning work of harvesting and transportation to supply sugarcane toCompany. The disclosure is made as per Section 186 of the Companies Act 2013 during theyear under review;

c) Issue of shares with differential rights; d) Issue of shares (including sweat equityshares) under Employees Stock Option Scheme;

e) Purchase by Company of its own shares or giving of loans for such purchase;

f) Buyback of shares;

g) No significant orders were passed by the Regulators or Courts or Tribunals whichimpact the going concern status and company's operations in future;

h) No material change affecting Financial Statements between the end of financial yearand the date of this report; i) There was no change in business activity of the Company;j) No fraud has been reported by the Auditors to the Audit Committee of the Board;

k) No cases of child labour involuntary labour sexual harassment and discriminatoryemployment were reported in the Financial Year 2020-21.

ACKNOWLEGEMENT :

Your directors wish to thank and acknowledge the Banks Government authorities andassociates for their assistance and cooperation.

As per our Audit Report of even date annexed

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

For D G M S &Co
Chartered Accountants
Frim M.No: 0112187W Sd/- Sd/- Sd/- Sd/-
Sd/- S S Ganesh Abhijith G Arun Kumar N M Pooja M M
Mr Shashank P Doshi Managing Director Shamanur CFO Compliance Officer
Partner DIN : 00451383 Executive Director
M No. 108456 DIN : 03451918
Date : 30-08-2021
Place : Davangere

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