The Directors are pleased to present the 65th Annual Report of the Company together with the Audited Financial Statements for the year ended March 31, 2026.
Financial Summary & Highlights of the Company
| Financial Performance | 2025 - 2026 | 2024 - 2025 |
| Revenue from Operations | 24,678 | 31,001 |
| Other Income | 1,086 | 1,641 |
| Total Income | 25,764 | 32,642 |
| Profit / (Loss) before Interest, Depreciation | 1,642 | 3,499 |
| Interest | 449 | 357 |
| Depreciation | 1,457 | 1,466 |
| Exceptional items (Debit) / Credit | 2,134 | 634 |
| Profit / (Loss) Before Tax | (263) | 1,677 |
| Tax Adjustments including Deferred Tax | (924) | 634 |
| Profit / (Loss) after Tax | 661 | 1,043 |
| Other Comprehensive Income Net of Tax | (29) | 39 |
| Total Comprehensive Income | 632 | 1,082 |
The Company has incurred a Loss Before Tax of 263 lakhs for the financial year ended 31st March 2026, as compared to a Profit Before Tax of 1,677 lakhs in the previous financial year, representing a decline of 1,940 lakhs. The total income for the year ending 31st March 2026 was 25,764 lakhs as against 32,642 lakhs in the previous year. The decrease in revenue is mainly due to lower sales volumes of Sugar, Power and Bagasse. The reduced sales were a result of lower sugarcane crushing and sugar production, which were adversely impacted by pest infestation and scanty rainfall etc.
During 2025 - 26 Sugar Season (SS) the world sugar production is expected to be around 186.7 million metric tons as against consumption of 178.5 million metric tons. In 2024 - 25 Sugar season, the sugar production was 177.4 million metric tons against consumption of 178.4 million metric tons. The forthcoming year 2026 - 27 SS also, the production is expected to surpass marginally the consumption.
Indias sugar production during 2024 - 25 SS was 29.62 million metric tons and during 2025 - 26 sugar season, it is expected to be around 32.40 million metric tons. Of these, estimated diversion towards ethanol production is 3.50 million metric tons during 2024 - 25 & the corresponding figure for 2025 - 26 is estimated at 3.10 million metric tons. The increase in sugar production is mainly on account of sugarcane area increase & yield improvement reported in Maharashtra, Uttar Pradesh & Karnataka. The sugar consumption in the year 2025 - 26 SS is expected to be around 28.3 million metric tons.
Tamilnadus Sugar production for the year 2025 - 26 SS is expected to be around 0.82 million metric tons against previous years 0.68 million metric tons. States sugarcane cultivation areas has marginally improved. However, due to the higher cost of manual cane harvesting and the higher revenue reported from other competitive crops like Paddy, Banana, Tapioca, Gingerly etc., sugarcane planting got affected. It is expected that there will be an increase of around 30% in fresh sugarcane planting area in 2026-2027 SS than previous year.
In the Companys command area, fresh cane planting is expected to increase by 30% in the current sugar season (SS) over last year & the overall increase in acreage including ratoon crop will be around 30% over previous years achievement due to intensive canvassing. Confidence building measures are being taken up to overcome the pest & disease incidence, involving Senior Scientists from the Sugarcane Breeding Institute, Coimbatore and Senior officials from the Department of Agriculture, Tamilnadu.
Your company has optimized its crushing operations by operating Kattur unit alone because of less cane quantum. Your Company crushed 2,33,257 tons of cane in 2025 - 26 and produced 2,17,510 quintals of sugar as against crushing of 2,61,780 tons of cane and sugar production of 2,39,970 quintals in the previous year. In the financial year 2025 - 26, the average Sugar recovery was 9.26% as against 8.94% in the previous year.
The Company is taking various steps to improve sugarcane plantation, which includes providing incentives for cane planting for approved varieties, adopting the latest technologies in sugarcane cultivation, mechanisation, and water conservation, developing new sugarcane varieties for higher yield and sugar recovery with the support of ICAR- SBI and TNAU, and implementing crop monitoring and technical support through Al- based systems.
With all these measures, we could see a positive trend in fresh sugarcane planting. However, it may take couple of years to develop sufficient cane to operate both units of the company at optimum capacity.
Your Company produced 144.05 lakh litres of alcohol during the financial year 2025 - 26 as against 168.95 lakhs litres in the previous year. The decrease in alcohol production was due to the decrease in cane crushing volume. Your Company has supplied 8 lakh litres of Ethanol to Oil Marketing Companies during the ethanol marketing year 2024 - 25.
During the financial year 2025 - 26, the total power generation was 13.39 million units against 18.63 million units for the corresponding period of 2024 - 25. The decrease in power production was due to the decrease in cane crushing volume. The long term PPA with TANGEDCO continues for Sathamangalam unit with a tariff of 5.189 / KWh. The surplus power from the Kattur unit is being sold to open access consumers through bilateral agreements / IEX.
The Board of Directors met on 04th May 2026 to take account of the full years performance, various growth opportunities and challenges. After reviewing this, the Board of Directors has decided not to recommend any dividend for the year 2025 - 2026, in order to conserve resources, considering the challenges ahead.
(i) Your company produces the following liquid biofertilisers in technical collaboration with Tamilnadu Agricultural University (TNAU) at Kattur. (a) Glucono Acetobacter Diazotrophicus - Nitrogen Fixer
(b) Phospho Bacteria - Bacillus magaterium (PSB) - Phosphorus Solubilizer
(c) Phospho Bacteria - Arbuscular mycorrhizae (AM fungi) - Phosphorus Mobilizer
(d) Fraeruria Aurantia - Paenibacillus Mucilaginosus - Potash Release Bacteria
(e) Zinc Solubilizer - Pseudomonas Chloroaphis (ZSB)
(f) Vasicular Arbuscular Mycorrhize (VAM)
(ii) Crop monitoring through Al - Pilot project has been taken up in 200 acres, fine tuning frequency of irrigation, macro & micro nutrient applications to improve the soil fertility & the yield from the current level.
(ii) Harvesting of sugar cane is the major labour intensive and expensive activity of sugarcane cultivation. To reduce the cost and dependency of labour, your Company has deployed about 25 sugarcane harvesters through entrepreneurs. We hope that in the coming years mechanized sugarcane cultivation will play a major role.
(iii) Harvesting of sugar cane is the major labour intensive and expensive activity of sugarcane cultivation. To reduce the cost and dependency of labour, your Company has deployed about 25 sugarcane harvesters through entrepreneurs. We hope that in the coming years mechanized sugarcane cultivation will play a major role.
( in Lakhs)
| Sl. No. | Particulars | 2025 - 2026 | 2024 - 2025 |
| (i) | Total Foreign Exchange inflow | - | - |
| (ii) | Total Foreign Exchange outflow | 536.7 | 22.92 |
Kattur Distillery unit has received Best Distillery- Platinum Award - (2024- 25) - Tamilnadu Region from the SISSTA.
Kattur Cogen unit - Silver Award - (2024 - 25) - Tamilnadu Region from the SISSTA.
Your Companys Research and Development (R & D) unit commenced operations in April 2023. The unit primarily focuses on developing various value- added products from
149(7) of the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulations, 2015 that the Independent Directors of the Company continue to meet the criteria of their independence laid down in Section 149(6) and continue to be included in the Data Bank maintained by the Indian Institute of Corporate Affairs and the Online proficiency self- assessment test requirement pursuant to Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Sugar and other by- products. A key area of focus is on Bio- fermentation, which is an emerging field through which many such value- added products can be produced using sugar and other by- product as feedstock. The capital outlay in the R & D unit so far is around 30 Crores including ongoing projects.
Current research projects include the development of low- calorie sweeteners and a few probiotic strains. Additionally, the Company has initiated research in the area of biosimilars. The Company has collaborated with a few agencies / experts to expedite the research projects.
The Companys R & D unit has been recognized by the Department of Scientific and Industrial Research (DSIR), Government of India. This recognition affirms the Companys compliance with national R & D standards and underscores its commitment to advancing research and development.
During the year 05 Board Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between any two meetings was within the period as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and MCA circulars thereon.
Mr. Arjun B. Kothari, (DIN: 07117816) Director is liable to retirement by rotation at the ensuing 65th Annual General Meeting and being eligible offers himself for re- appointment.
Mr. Arjun B Kothari, Managing Director, Mr. M. Silvester Goldwin, Whole Time Director, Mr. R. Krishnan, Chief Financial Officer and Mr. R. Prakash, Company Secretary are the Key Managerial Personnel of the Company in terms of section 203 of the Companies Act, 2013.
Mr. Abdul Kareem Sait (DIN: 03265300) was appointed as an Independent Director of the Company with effect from 27th June 2025 for a term of five years and the same was approved by the shareholders at the 64th Annual General Meeting held on 06th Aug 2025.
Mr. C. V. Krishnan (DIN: 01606522), Independent Director, resigned from the Board with effect from 27th June 2025. The Board places on record its appreciation for the valuable guidance and contribution made by Mr. C. V. Krishnan during his tenure with the Company.
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulations, 2015 that the Independent Directors of the Company continue to meet the criteria of their independence laid down in Section 149(6) and continue to be included in the Data Bank maintained by the Indian Institute of Corporate Affairs and the Online proficiency self- assessment test requirement pursuant to Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014.
During the year 04 Audit Committee meetings were held, the details of the composition of Audit Committee are provided in the Corporate Governance Report of this Annual Report. The Board has not rejected any proposal / recommendations of Audit Committee during the year. The intervening gap between any two meetings was within the period as prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Board has on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The salient features of the Remuneration Policy are stated in the Corporate Governance Report. The Remuneration Policy approved by the Board of Directors is posted on the website of the Company www.hckotharigroup.com/ ksc/7q=node/18
The Company has a vigil mechanism named Whistle Blower Policy to deal with genuine concerns, if any, raised by the Directors / Employees. The details of Vigil Mechanism / the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the Companys website www.hckotharigroup.com/kscl/7q=node/18 . There were no incidents / concerns reported during the year under review.
The Company has adopted a Code of Prevention of Insider Trading with a view to regulating trading in securities by the Promoters, Directors and Designated Persons of the Company. The Code requires pre- clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys shares by the Promoters, Directors and the Designated Persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.
In terms of Section 134(5) of the Companies Act, 2013, the Directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) 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. (d) the directors had prepared the annual accounts on a going concern basis; (e) 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; and (f) 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.
There is no change in the nature of business of the company during the year. There is no material change or commitment affecting the financial position of the company that has occurred since 31st March 2026 to the date of this report.
The paid- up equity share capital of the Company as on March 31, 2026 was 8,288.86 Lakhs. The Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity.
As required under Section 92(3), copy of Annual Return is placed on the Companys website. The web link to access the annual return is http://hckotharigroup.com/kscl/?q=node/20
The Statutory Auditors of the Company M/s. P. Chandrasekar LLP, Chartered Accountants
(Registration No.: 000580S/S200066) has been reappointed for the second term by the Shareholders at the 61st AGM held on 3rd August 2022 to hold office till the conclusion of the 66th Annual General Meeting of the Company.
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. There are no qualifications or observations, or any adverse remarks made by the Auditors in their Report on the Financial Statements for the year 2025 - 26 and no fraud was reported by auditors under Section 143(12) of the Companies Act, 2013.
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit Records maintained by the Company in respect of its Sugar, Co- gen and Distillery Unit are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Mr. K. Suryanarayanan, Cost Accountant in Practice for conducting the audit of cost records of the Company and the remuneration payable to the Cost Auditor is required to be ratified by the Members in a general meeting. Accordingly, a Resolution seeking Members ratification for the remuneration payable to Mr. K. Suryanarayanan, Cost Accountant, is included at Item No. 3 of the Notice convening this 65th Annual General Meeting.
The Secretarial Auditor of the Company M/s. Alagar and Associates LLP, Chennai, Practicing Company Secretaries (Firm Registration No. L2025TN019200) has been appointed by the Shareholders at the 64th AGM held on 06th August 2025 to hold office for the first term of five (5) consecutive years commencing from financial year 2025- 2026 to financial year 2029- 2030.
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Company Secretaries of India. The Secretarial Audit Report is forming part of this Annual Report. The Secretarial Audit Report does not contain any qualifications or observations.
d) Internal Auditor
Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Company has appointed M/s. R. Subramanian & Co. LLP, Chartered Accountants, Chennai as Internal Auditor for Kattur unit & Head office and M/s. V. P. Mukundan & Associates, Chartered Accountants, Chennai as Internal Auditor for Sathamangalam unit of the Company.
The Company has not accepted deposits either from the members or public falling within the ambit of Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year, hence, there were no outstanding deposits during and at the end of the financial year 2025 - 2026.
There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit function is carried out by an independent firm of Chartered Accountants. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Internal Audit Reports are placed before the Audit Committee on a quarterly basis for its scrutiny and suggestions, if any. The Internal Auditor attends the Audit Committee meetings.
The Internal Auditors monitor and evaluate the efficacy and adequacy of the internal 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 the Internal Auditors, the Company undertakes corrective action in the respective areas and strengthens controls.
The Company has not given any Loans or Guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the general investments made by the company are given in the notes to the financial statements.
Pursuant to the requirement of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Company has laid down the procedures to inform Board Members about the risk assessment and minimization procedures. Accordingly, the Company periodically submits the Risk Management Review Report to the Board for its review and suggestions.
Pursuant to the provisions of section 135 and schedule VII of the Companies Act, 2013, Corporate Social Responsibility (CSR) Committee was formed to recommend (a) the policy on CSR and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors. The policy on CSR as approved by the Board is posted on the Companys website www.hckotharigroup.com/kscl/?q=node/18 . A detailed Report on CSR activities in the prescribed format is forming part of this Annual Report.
All related party transactions entered during the financial year were on an arms length basis and in the ordinary course of business. There were no material contracts or arrangements or transactions, and therefore disclosure in Form AOC- 2 is not required. All related party transactions are placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive in nature. For all the transactions entered pursuant to the omnibus approval so granted, a statement giving details of all such transactions is placed before the Audit Committee for their review on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is posted on the Companys website www.hckotharigroup.com/kscl/?q=node/18
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the Annual Performance Evaluation of the Board, its committees and of individual directors in the format (questionnaire) prescribed by the Nomination and Remuneration Committee of the Company.
The structured questionnaire covers various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance etc. The performance evaluation of the
Directors (without participation of the relevant Director) was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.
The Independent Directors of the Company had met during the year on 19th Jan 2026 to review the performance of NonIndependent Directors and the Board as a whole, reviewed the performance of the Chairperson of the Company and also assessed the quality, quantity and timeliness of flow of information between the company management and the Board without the presence of the Non - Independent Directors and members of the Management.
Disclosure about Cost Audit
| Filing of Cost Audit Report | 2025 - 2026 | 2024 - 2025 |
| Due Date | 27.09.2026 | 27.09.2025 |
| Actual Date | 30.08.2026 (tentatively) | 10.09.2025 |
| Cost Auditor Details | Mr. K. Suryanarayanan, M.No. 24946, Chennai | Mr. K. Suryanarayanan, M.No. 24946, Chennai |
| Audit Qualification in Report | - | Nil |
There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the financial year.
The Company is listed in The National Stock Exchange of India Limited (NSE) and the Stock Code is KOTARISUG & ISIN INE419A01022. The Company confirms that it has paid the Annual Listing Fees for the year 2026 - 2027 to NSE where the Companys Shares are listed.
Your Company has taken adequate steps to adhere to all the stipulations laid down in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report.
Certificate from the Practising Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Report.
A detailed discussion on the industry structure as well as on the financial and operational performance is contained in the Management Discussion and Analysis Report that forms an integral part of this Report.
The Human Resources Department created an Internal Complaints Committee for the prevention and redressal of sexual harassment of women at workplace as per the requirement of Sexual harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013. There were no incidents of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
| 2024 - 2025 | |
| Due Date | 27.09.2025 |
| Actual Date | 10.09.2025 |
| Mr. K. Suryanarayanan, M.No. 24946, Chennai | |
| Mr. K. Suryanarayanan, M.No. 24946, Chenna | |
| Nil |
The Company is in compliance with the applicable provisions relating to maternity benefits as prescribed under the Maternity Benefit Act, 1961 / the Code on Social Security, 2020.
Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.
a) The ratio of the remuneration of each director to the median employees remuneration for the financial year and such other details:
| Sl. No. | Name | Designation | Ratio |
| (i) | Mr. Arjun B. Kothari | Managing Director | 34.20:1 |
| (ii) | Mr. M. Silvester Goldwin | Whole Time Director | 26.26:1 |
b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:
1.70% increase has been reported in the median remuneration of employees in the financial year. (d) The number of permanent employees on the rolls of the company as on 31st Mar 2026:441 (e) Increase of remuneration for employees was in the varying range of 4% to 15% and for KMP the increase was 5% and 6% for the year. (f) We affirm that the remuneration paid during the period under review is as per the Remuneration Policy of the company.
The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.
Statements in this Report, particularly those which relate to Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from those either expressed or implied in the statement depending on the circumstances.
Your Directors thank the Banks, Customers, Farmers, Financial Institutions, Government Authorities, Suppliers and Shareholders for their continued support. Your Directors also place on record their appreciation for the services rendered by the employees of the Company.
On behalf of the Board for Kothari Sugars and Chemicals Limited
Nina B. Kothari Chairperson DIN:00020119
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