Dharani Sugars & Chemicals Ltd Directors Report

Dear Members,

Your Board of Directors are pleased to present the 39th Annual General Meeting on the operations of the Company and the Audited Statement of accounts for the year ended 31st March 2026

FINANCIAL PERFORMANCE

Rs. in Crores

Particulars	Year Ended 31.03.2026	Year Ended 31.03.2025
Total Revenue	2.41	0.72
Profit/(Loss) before Interest, Depreciation and Tax	(21.69)	(20.89)
Interest and Finance Charges	39.09	41.92
Cash Profit/ (Loss)	(60.78)	(62.81)
Depreciation	21.99	22.10
Profit/ (Loss) before Tax	(82.77)	(84.91)
Deferred Tax -Asset/ (Liability)/ Exceptional Items	(16.79)	(10.91)
Profit / (Loss) After Tax	(99.56)	(95.82)
Profit / (Loss) brought forward from last year	(204.80	(108.98)
Profit / (Loss) carried forward	(304.36)	(204.80)

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

OPERATIONAL PERFORMANCE

Sugar, Alcohol and Power: During this period under review, the Company was unable to commence cane crushing operation at any of its units owing to the non-payment of the cane price arrears relating to sugar season 2018-19.

The Company has successfully exited the CIRP on 09.05.2024 pursuant to the approval and implementation of the Resolution Plan. Since then, the management has been undertaking various operational, financial and statutory initiatives to revive and stabilize the Companys business operations. The Company is actively pursuing the necessary measures for the commencement of its sugar, distillery and cogeneration power operations and is making efforts to commence operations during the ensuing sugar season, subject to the fulfilment of the requisite operational, regulatory and financial requirements.

TRANSFER TO GENERAL RESERVES

In the view of accumulated loss incurred during the financial year under review, your directors do not propose to transfer any amount to General Reserves account.

DIVIDEND

In view of the losses incurred by the Company, directors do not recommend the declaration of any dividend for the financial year 2025-26.

Further, pursuant to Regulation 43A of SEBI (LODR) Regulation 2015, the provision related to Dividend Distribution Policy are not applicable to the Company.

SHARE CAPITAL

There was no change in the authorised share capital of the Company during the financial year. the Authorised Share Capital of the Company stood at Rs. 60 Crores, comprising 5,00,00,000 Equity Shares of Rs. 10/- each aggregating to Rs. 50 crore and 1,00,00,000 Preference Shares of Rs. 10/- each aggregating to Rs. 10 Crore. During the year 2024-25, the Company has allotted 83,14,328 equity shares of Rs. 10/- each on a preferential basis to National Asset Reconstruction Company Limited (NARCL) pursuant to the approval of the Board of Directors at its meeting held on 11 September 2024.

However, the shares could not be credited to the allottee as the requisite in-principle approval from the National Stock Exchange of India Limited (NSE) and BSE Limited were awaited. The Company is taking effective steps to get the in-principle approval from stock Exchanges. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity or bonus shares. The Company has not bought back any of its securities during the year under review.

SUBSIDIARY, JOINT ARRANGEMENTS AND ASSOCIATE COMPANIES

During the year under review, your company has no subsidiary, associate companies or joint ventures.

MEETING OF BOARD

During the period under review, the Board of Directors held four (4) meetings on 29.05.2025, 14.08.2025, 13.11. 2025, and 12.02.2026. The details of the meetings and attendance of the Directors are provided in the Report on Corporate Governance, which forms an integral part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the financial year under review, the details regarding the composition of the Board of Directors, category of Directors, and other related disclosures are provided in the Corporate Governance Report forming part of this Annual Report.

During the financial year under review, the following changes took place in the composition of the Board of Directors:

A. Appointments

Following directors have been appointed as Additional Director ( Non- Executive, Independent) on 29th May 2025 and on 14th August 2025 respectively . Subsequently, the Members of the Company approved their appointment as a Non-Executive Independent Directors at the 38th Annual General Meeting of the Company

Mr. Mahalingam Venkatachalam (DIN: 10954304)

Mr. Sakthivel P (DIN: 11240429)

B. Cessation:

Mr. Selvam Palani (DIN: 01351493), Non-Executive, Independent Director of the Company, ceased to hold office as an Independent Director with effect from 27th September 2025 upon completion of his second consecutive term of office.

C. Reappointment:

Mrs. Visalakshi Periasamy (DIN: 00064517), Non-Executive Director, who has attained the age of 80 years, retires by rotation at the ensuing Annual General Meeting (AGM) and, being eligible, has offered herself for re-appointment.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, having considered her rich experience, expertise, and valuable contribution to the Company, recommends her reappointment to the Members at the ensuing AGM by way of a Special Resolution, in compliance with Regulation 17(1A) of the SEBI ( L i s t i n g O b l i g a t i o n s a n d D i s c l o s u r e Requirements) Regulations, 2015, as amended.

COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following Committees constituted by the Board function according to their respective roles and defined scope: Audit Committee Nomination and Remuneration Committee Corporate Social Responsibility Stakeholders Relationship Committee Details of composition, terms of reference and number of meetings held in financial year ended March 31, 2026 for the aforementioned committees are given in the Report on Corporate Governance, which forms a part of this Report.

F u r t h e r, d u r i n g t h e y e a r u n d e r r e v i e w, a l l recommendations made by the various committees have been considered and accepted by the Board.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

In terms of Section 149 of the Act and the SEBI Listing Regulations, the Independent Directors of the Company as on date of this Report have given declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act as well as the Rules made thereunder and are independent of the Management.

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.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation is carried out is based on criteria approved by the Board which is available on the Companys Website.

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.

Pursuant to Section 186 of Companies Act, 2013, disclosure on particulars relating to loans, advances, guarantees, and investments are provided as part of the financial statement

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 2025-26 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 ABSORPTION

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

During the financial year under review, there are no significant material orders passed by the Regulators/Courts or Tribunal, which could impact the going concern status of the Company and its future operation. However, Company has received notices from lenders against the default in certain obligations.

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.

POLICY ON APPOINTMENT OF DIRECTORS AND REMUNERATION

The Companys policy on Directors, Senior Management appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013. Its core objective is to ensure that the remuneration structure is reasonable, competitive, and aligned with the companys performance. It aims to attract, retain, and motivate highly competent individuals while striking a balance between short-term and long-term goals to drive sustainable growth. The policy is available for reference on the companys official website at the following link: www.dharanisugars.com

OTHER DISCLOSURES

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

Changes in the nature of Business; if any. No change in the nature of Business Statement by the company with respect to the compliance of the provisions relating to the Maternity Benefit Act 1961; Not Applicable.

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.

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.

STATUTORY AUDITOR & AUDIT REPORT

Pursuant to the provisions of Sections 139 of the Companies Act, 2013, M/s Srivatsan & Associates, Chartered Accountants, Chennai (FRN: 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.

The Statutory Auditors of the Company have issued a qualified opinion on the Audited Standalone Financial Statements for the financial year ended 31 March 2026. The Managements response to the audit qualification is provided in the Statement on Impact of Audit Qualifications, which is annexed to the Audited Standalone Financial Results as at 31 March 2026.

SECRETARIAL AUDITOR & AUDIT REPORT

During the period under review, pursuant to the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (LODR) Regulations, M/ s. M Damodaran & Associates LLP, ( FRN: L2019TN006000) a peer reviewed firm of Company Secretaries in Practice, were appointed as Secretarial auditors of the Company for audit period of five consecutive years commencing from 2025-26 till 2029-30.

The Report of the Secretarial Auditor for the financial years 2025-26 is annexed herewith as Annexure VI. The said Secretarial Audit Report contain the following observations:

Secretarial audit Observation	Management reply
During the period from April 01, 2025 to May 28, 2025, half of the Board of Directors of the listed entity did not comprise independent directors, as required under Regulation 17(1)(b) of the SEBI LODR.	Subsequently, the listed entity had appointed one more Independent Director on the Board w.e.f. May 29, 2025 and complied with the requirement of provisions u/r 17 (1) (b) of SEBI LODR.
There was 26 days delay in obtaining approval of shareholders for appointment of Mr. M Mahalingam Venkatachalam (DIN- 10954304) as an Additional Director (Non-Executive Independent Director).	The listed entity has taken sufficient steps to comply this regulation in future.
Date of appointment by Board May 29, 2025.
Date of shareholders \u2019 approval - September 25, 2025. Hence the listed entity has not complied with regulation 17(1C) (a) of SEBI LODR.
The listed entity submitted the Annual Secretarial Compliance Report for the Financial Year ended March 31, 2025 to the stock exchanges with a delay of one day.	The listed entity has taken sufficient steps to comply this regulation in future.
The listed entity has submitted the required disclosures to the stock exchanges regarding default in payment of interest/principal amount due to financial institutions, with a minor delay.	The listed entity has taken sufficient steps to comply this regulation in future.
Date of default December 31, 2025
Date of disclosure February 10, 2026

INTERNAL AUDIT

Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and all other applicable provisions (including any amendment thereof) of the Companies Act, 2013, M/s. Srinivasan & Shankar, Chartered Accountants, Chennai (FRN: 005093S) were appointed as the Internal Auditors of the company for the Financial Year 2025-26.

COST AUDIT

As the Company has not commenced its production activities during the financial year, the provisions relating to conducting cost audit/maintenance of cost records and applicable disclosures under Section 148 of the Companies Act, 2013 are not applicable to the Company.

DEPOSITS

During the period under review, your company has not accepted any deposits as specified in section 73 and 74 of Chapter V of Companies Act, 2013

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the provisions of Secretarial Standard 1 (Board Meetings) and 2 (General Meetings) issued by the Institute of Company Secretaries of India (ICSI) were adhered to while conducting the respective Meetings.

VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES

Pursuant to Section 177(9) and 177(10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Obligation and Disclosure Requirement Regulations 2015, the Board of Directors had approved a Policy on Vigil Mechanism/ Whistle Blower and the same is hosted on the website of the Company. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Directors/ Employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

RESTRUCTURING OF SUGAR DEVELOPMENT LOAN

During the year, the One Time Settlement ( OTS ) sanctioned by the Government of India in respect of the Sugar Development Fund ( SDF ) Loan was revoked due to non-payment of the settlement amount within the extended timeline permitted up to April 06, 2026. Accordingly, the concessions and reliefs granted under the OTS arrangement, including waiver of interest, cease to be applicable.

Hence, the previously waived interest amounting to INR 2,195.66 Lakhs has been reinstated and recognised as an exceptional item in the Statement of Profit and Loss for the year ended March 31, 2026.

The aforesaid amount represents reversal of interest waiver granted under the OTS arrangement and consequent reinstatement of the original liability pursuant to cancellation of the settlement terms.

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 m anagement would l i ke to c l arify 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 from 29.07.2021 09.05.2024.

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 entire dues including the SOP Fines have been fully paid on 6th August 2025 to the both Stock Exchanges.

NSE officials from Chennai Office has also completed the inspection at our Corporate Office at No.59 Sterling Road, Nungambakkam, Chennai on 25th August 2025 and we understand that the Officer has already sent his report to their NSE, Mumbai office.

BSE officials from Chennai Office has also completed the inspection at our Corporate Office at No.59 Sterling Road, Nungambakkam, Chennai on 31 st December 2025 and we understand that the Officer has already sent his report to their BSE, Mumbai office.

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.

PREVENTION OF SEXUAL HARASSMENT

The Company has in place an Anti-Sexual harassment policy in line with the requirements of the Section 4 of the Sexual harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received about sexual harassment. All employees are covered under this policy. Details have been displayed prominently in the work place and also in the Companys Website. No complaints were received during the year.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

During the financial year under review, there were no proceedings pending against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016. However, the Company had previously been admitted into the Corporate Insolvency Resolution Process and subsequently exited the CIRP pursuant to the order of the Honble National Company Law Tribunal (NCLT) dated 09.05.2024.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year under review, there was no instance of one-time settlement with any Banks or Financial Institutions

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.

By order of the Board
For Dharani Sugars and Chemicals Limited

Dr Palani G Periasamy
Executive Chairman
(DIN No.00081002)

Place: Chennai
Date: 16th May 2026