Dharani Sugars & Chemicals Ltd Directors Report

Dear Members,

Your Board of Directors are pleased to present the 38^th Annual General Meeting on the operations of the Company and the Audited Statement of accounts for the year ended 31^st March 2025.

financial performance

Rs. in Crores

Particulars	Year Ended 31.03.2025	Year Ended 31.03.2024
Total Revenue	0.72	0.18
Profit/(Loss) before Interest, Depreciation and Tax	(20.89)	(6.41)
Interest and Finance Charges	41.92	5.99
Cash Profit/ (Loss)	(62.81)	(12.40)
Depreciation	22.10	22.18
Profit/ (Loss) before Tax	(84.91)	(34.58)
Deferred Tax -Asset/ (Liability)/ Exceptional Items	(10.91)	155.90
Profit / (Loss) After Tax	(95.82)	121.32
Profit / (Loss) brought forward from last year	(108.98)	(230.30)
Profit / (Loss) carried forward	(204.80)	(108.98)

The financial statements have been prepared in compliance with the Indian Accounting Standards.

company performance

Sugar, Alcohol and Power: During this period under review, the Company was not able to start cane crushing operation in all units as the company has not cleared the cane arrears relating to sugar season 2018-19 and the company was in CIRP Process. The Company has come out from the CIRP Process on 9th May 2024 and the Company is taking effective steps to Operate the Sugar, Power and Distillery plants in the coming Sugar Season.

transfer to general reserves

No amount is proposed to be transferred to General Reserves account on account loss incurred in the current year.

dividend

In view of the accumulated losses, Directors do not recommend any dividend to the Equity shareholders for the financial year 2024-25.

Pursuant to Regulation 43A of LODR Regulation 2015, the regulations related to Dividend Distribution Policy are not applicable to the Company.

share capital

There is no change in the Authorised Share Capital of the Company. Rs 50 Crores for Equity shares and Rs.10 Crores for preference shares at the face value of Rs.10/- each.

During the year the Company has issued 83,14,328 equity shares of Rs.10/- under the preferential allotment to NARCL approved in the Board Meeting held on 11.09.2024. But shares were not credited to NARCL due to in-principle approval pending with NSE and BSE. The Company is taking effective steps to get the in-principle approval from stock Exchanges.

corporate governance

Your Company has complied the Corporate Governance regulations as laid out in SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015 with minor deviation. A report on Corporate Governance in line with SEBI prescribed format incorporated in the Listing Obligations and Requirement Regulations, is attached herewith. A certificate from the Practicing Company Secretary on compliance of conditions of Corporate Governance has been obtained and copy enclosed to this report.

disclosures / confirmation

In deference to Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, disclosures / confirmation are made as below:

annual return

The Form MGT -7 for the year 2024-25 shall be filed with Registrar of Companies within the prescribed time after the date of 38th Annual General Meeting (AGM) of your Company. This also available in web address of the Company i.e., www.dharanisugars.com .

directors responsibility statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors state that

• In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same.

• The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

• The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

• The directors have prepared the annual accounts on a going concern basis.

• The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

• The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

loans, guarantees or investments.

Your Company has not given any loans or provided any guarantees or acquired securities as defined in Section 186 of the Companies Act, 2013.

contracts, arrangements with related parties referred to in section 188(1).

All transactions entered into by the Company with Related Parties were in the Ordinary Course of Business and at arms Length pricing basis. The Audit Committee granted Omni bus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. There were no materially significant transactions with Related Parties during the financial year 2024-25 which were in conflict with the interest of the Company or which requires the approval of shareholders. Suitable disclosures as required under IND AS-24 have been made in Note.47 of the Notes to the financial statements. Details of the transactions are provided in Form AOC-2 which is attached as Annexure-III to this Report.

material changes and commitments

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of the report. All the Banks/Financial Institutions

except SDF Loan and IREDA loan had assigned their loans to NARCL vide their letter dated 09.10.2023. IREDA loan was settled through OTS settlement on 06.08.2024.

foreign exchange earnings and out-go, conservation of energy & technology abosorption

The details of measures taken for Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in the Annexure iv.

corporate social responsibility

As per Section 135 of the Companies Act, a Corporate Social Responsibility (CSR) Committee has been formed. CSR policy has been framed and is available on the Website.

However, as the average of the net profits for the last 3 years is negative, no CSR expenditure has been earmarked on this account.

risk management policy

The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) of the Companies Act, 2013 details of the Policy are disclosed in the Companys Website.

At present the Company has not identified any element of risk which may threaten the existence of the Company.

public deposits

During the financial year the Company has not accepted deposits as defined in Section 73 and 74 of Chapter V of the Companies Act, 2013.

significant and material orders

1. The Honble National Company Law Tribunal ("NCLT"), Chennai Bench, admitted the Corporate Insolvency Resolution Process ("CIRP") application filed by a financial creditor of the Company and appointed an Interim Resolution Professional ("IRP"), in terms of the Insolvency and Bankruptcy Code, 2016 ("the Code") to manage the affairs of the Company vide order dated July 29, 2021 received by the Company on July 31,2021.

2. Further as per the e-voting results dated 22nd September 2022, CoC approved the appointment of Mr. Mahalingam Suresh Kumar, Insolvency Professional as Resolution Professional. The appointment was confirmed by Honble NCLT, Chennai vide order IA/1248(CHE)/2022 in IA/976/2019 dated 18th November 2022.

3. The Honble NCLT had passed a liquidation order dated 28th June 2023.

4. Meanwhile, the following lenders (Consortium Banks) viz., Indian Bank, State Bank of India, Central Bank of India, IDBI Limited, The South Indian Bank Ltd, The Federal Bank Ltd, ICICI Bank, Bank of India, Union Bank of India and Indian Overseas Bank had assigned there loan to National Asset Reconstruction Company Limited (“NARCL”) vide Joint Assignment Agreement dated 30th September 2023.

5. Considering the settlement arrived between the Promoter and the majority lenders of the Company, the Honble Supreme set aside the Liquidation Process vide its order dated 28117/2023 dated 7thAugust 2023. Further the Honble Supreme Court vide its order 150612/2023 dated 18th March 2024, remanded back to The Honble National Company Law Tribunal (NCLT), Chennai Bench for consideration of withdrawal of IBC process initiated against the Company in terms of Section 12A of IBC, 2016 read with Regulation 30A of the IBBI(CIRP) Regulations., 2016.

6. Based on the settlement proposal submitted by the Promoter U/s 12 A of IBC 2016, the CoC and NCLT has approved the proposal and ordered the withdrawal of the CIRP process and restored the powers of the Board vide its order No. IA (IBC)/825/ CHE/2024 in IBA/976/2019 dated 9th May 2024.

7. A Master Restructuring Agreement (MRA) was entered into between NARCL and India Debt Resolution Company Limited (IDRCL) - acting a Trustee on behalf of NARCL on 22nd May 2024.

internal financial control systems and their adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by this Audit Committee. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairman of the Company. the Internal Audit Department monitors and evaluates the efficiency and adequacy of internal financial control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal auditor Company undertakes corrective action in their respective areas and thereby strengthens the financial controls. Significant audit observations, if any, and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board

particulars of employees

In accordance with the provisions of Section197 (12) of the Companies Act,2013, read with Rules 5(1),5(2) and 5(3), of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the name and other particulars of employees are to be set out in the “Annexure -I forming part of the Annual Report.

Other Disclosures

1. Details of frauds reported by auditors under subsection (12) of section 143 other than those which are reportable to the central government. NIL

2. Changes in the nature of Business; if any. No change in the nature of Business

3. Details of Directors/ KMP appointed/resigned during the year; No Resignation during the year,

4. statement by the company with respect to the compliance of the provisions relating to the Maternity Benefit Act 1961; Not Applicable.

5. Disclosures in respect of voting rights not exercised directly by the employees in respect of shares to which the scheme relates shall be made in the Boards report in such manner as may be prescribed buy back of shares. Not Applicable.

6. The Board of Directors shall, inter alia, disclose in detail in the Boards Report for the financial year in which the issue of equity shares with differential rights was completed; Not Applicable.

7. The Board of Directors shall, inter alia, disclose in detail in the Directors Report for the year in which the issue of sweat equity shares made; Not Applicable.

8. Details of Employees Stock Option Scheme. Not Applicable.

9. When there is voluntary revision of the financial statements and the Board report, the detailed reasons for revision of such financial statement or report. Not Applicable.

directors and key managerial personnel

• Re-appointment of Mr Arunachalam Sennimalai (DIN 00062791) Non-Executive Director who has crossed the age of 84 years, retires by rotation and being eligible offers himself for re-appointment.

• Appointment of Mr Mahalingam Venkatachalam (DIN 10954304) appointed as a Non- Executive & Independent Director of the Company, not liable to retire by rotation, subject to the approval of shareholders in the ensuing Annual General Meeting and to hold office for a First term of 5 (five) consecutive years, i.e., from 29.05.2025 to 28.05.2030.

• Appointment of Mr Sakthivel P (DIN 11240429) appointed as a Non- Executive & Independent Director of the Company, not liable to retire by rotation, subject to the approval of shareholders in the ensuing Annual General Meeting and to hold office for a First term of 5 (five) consecutive years, i.e., from 14.08.2025 to 13.08.2030.

statutory auditor & audit report.

Pursuant to the provisions of Sections 139 and 141 of the Companies Act, 2013, M/s Srivatsan, Chartered Accountants, Chennai (Registration No.014921S) was appointed as Statutory Auditors for a period of 5 years from the conclusion of the 36th Annual General Meeting until the conclusion of the 41st Annual General Meeting for the year ending 31st March 2028.

Statement on impact of Audit Qualifications (for Audit Report with modified opinion submitted) along with Audited Financial Results - (Standalone) as on 31.03.2025 is annexed.

The Report of the Secretarial Auditor for the financial years 2024-25 is annexed herewith as Annexure VI . The said Secretarial Audit Report contain the following observations.

restructuring of sugar development loan

Government of India Amended the SDF Rules for Restructuring SDF Loans for Potentially viable sick sugar undertakings vide their notification no.1-2/2022- SDF dated 28.02.2024. Based on this the Company has obtained Administrative Approval (“AA”) dt 26th Sep 2024 from SDF, Govt of India for OTS settlement vide their letter for Rs. 55.53 crores (Principal Rs. 23.81 crores + Interest Rs. 31.72 crores). The Company is to make payment of OTS on or before till 25th March 2025.

One Time Settlement amount shall carry 6.75% rate of Interest from the date of administrative approval i.e., 26.09.2024 to till date of payment of the OTS amount in full.

Company requested the SDF vide letter dated 25th March 2025 for three months time to settle the OTS whereas no reply was received.

Mean time Government of India has extended time for application for OTS scheme up to 29th June 2025, vide its letter dated 19th March 2025.Accordingly the Company has submitted the application on 6th June 2025.Further to our commitment Company has deposited Rs 5.00 crores on 15.07.2025 in fixed Deposits with Indian bank in the name of the Company with the lien marked in favour of IFCI Limited. The balance amount will be paid on receipt of OTS order.

status on the restoration of trading of the companys equity shares in bse and nse terminal.

Companys situation took an unexpected turn when it was admitted into the Corporate Insolvency Resolution Process (CIRP) w.e.f 29.07.2021 by the Honble National Company Law Tribunal, Chennai Bench (Honble NCLT) on the application filed by Bank of India. This led to the appointment of an Interim Resolution Professional /Resolution Professional to manage the Companys affairs. Subsequently, the Company was admitted into the liquidation process on 28.06.2023 by the Honble NCLT, and the Liquidator was appointed to manage the Companys liquidation process. These developments were intimated to stock exchanges then and there. Under these circumstances, including suspending the board of directors powers, made it impossible for us to comply with various provisions of the Companies Act, 2013, SEBI Regulations and other applicable laws.

As Per the IBC, 2016, and MCA Circular, the IRP/RP/Liquidator is responsible and shall file all compliances with ROC, Stock Exchanges, and other regulating authorities during the IBC process. As you well know, due to the persistent efforts of the promoter, the Honble Supreme Court allowed the promoters to settle the dues with Creditors; the Company made debt restructuring with lead lender National Asset Reconstruction Company Limited (NARCL), which resulted in releasing the Company from the Liquidation proceedings vide Order of NCLT dated 09.05.2024.

The management would like to clarify that noncompliance with filing financial results and other complaints was not done maliciously. They occurred from 29.07.2021 to 09.05.2024 due to the CIRP/Liquidation process under the provisions of IBC, 2016. For such a period, IRP/RP/Liquidator should have complied with all requirements under LODR. After releasing the Company from the IBC process and reinstating the Board of Directors, the Company started to regularize all pending compliances. This swift action demonstrates our dedication to regularizing all pending compliances and maintaining transparency. The Company has not done anything maliciously.

The following SOP Fines were levied by the Stock Exchanges during this CIRP Period.

1. BSE - Rs.42,95,200.00

2. NSE - Rs. 43,31,780.00

The Company has paid SOP fines on 6th August 2025. We have also filed application for revocation of suspension of trading of our equity share on 18-03-2025.

The Company has made effective steps to restore the trading of shares to protect the interest of 20000 shareholders of the Company. We hope to restore the trading of shares shortly.

acknowledgements

The Board of Directors places on record its appreciation of the support, assistance and co-operation received from the Central Government, Government of Tamil Nadu, various governmental agencies, Banks/Financial Institutions.

The Board of Directors also wishes to place on record its appreciation for the cane growers, without whose help

and support it could not have achieved the progress that has been made so far. With our encouragement and their initiative, we hope for improved cane availability for the ensuing years.

Your Directors are thankful to the employees of the Company for their wholehearted co-operation and unstinted dedication to duty leading to cordial industrial relations during the year under review.

The Board is thankful and grateful for the continuing cooperation to the management from the shareholders family since inception and is confident that this partnership will sustain forever.

Disclosures pursuant to Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.Statement of particulars of remuneration as per Rules 5(1)

S.No	Description	Designation
1	The ratio of the remuneration of each director to the median of the employees of the company for the financial year	Managing Director -NA Executive Chairman -NA
2.	The percentage increase in remuneration of each director, Officer, Chief Executive Officer, Company Secretary of Manager, if any, in the financial year	Managing Director -NA Executive Chairman -NA Chief Financial Officer-NA. Company Secretary-NA
3.	The Percentage increase in the median remuneration of employees in the financial year	No increase in the salary from the year 2019
4.	The number of permanent employees on the rolls of company	488
5.	Average percentile increase already made in the salaries other than the managerial personnel in the last financial year. Its comparison with the percentile increase in the managerial remuneration. Justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration	As the Company was under CIRP Process. No salary i ncrease was given since 2019 year.
6.	Affirmation that the remuneration is as per the remuneration policy to the company.	As per the remuneration policy of theCompany.

managerial remuneration for the year 2024-25

S.No	Description	Designation
a	Details of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. (Applicable to listed Company)	As the Company was under CIRP Process. No salary increase was given from the year 2019.
b	Details of every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	The information as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However as per first proviso to Section 136(1) of the Act and second proviso of Rule 5(2) of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule5(2) (first part). Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. There are no employees falling within the requirements of rule 5(2) (Second part) of the said rules.
c	Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Boards Report	Nil

D The following disclosures shall be mentioned in the Board of Directors report under the heading “Corporate Governance”, if any, attached to the financial statements as per Schedule V, Part II , Section II of the Companies Act, 2013.

(i) all elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors;

(ii) details of fixed component and performance linked incentives along with the performance criteria;

(iii) service contracts, notice period, severance fees;

(iv) stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable

Particulars	Dr Palani G Periasamy -	M Ramalingam -
	Executive Chairman	Managing Director
Salary Perquisites	48.00	21.60
HRA		2.40
LTA	4.00	1.80
Medical	4.00	1.80
Total	56.00	27.60
	Nil	Nil
	5 Years	5 Years
	3 Months	3 Months
	Nil	Nil
	Nil	Nil

During the year the Company was incurred loss and Chairman and Managing Director remuneration provided for the FY 202425. During the year the Company was in default of SDF Loan. Hence, remuneration will be paid after getting approval of the Secured lenders and shareholders in accordance with Schedule V Part II Section II of the Companies Act, 2013.