Sakthi Sugars Ltd Directors Report

To the Members

The Board of Directors of the Company presents its Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2026.

FINANCIAL HIGHLIGHTS

(Rs in lakhs)

*Figures are reclassified to make them comparable with current years figures

REVIEW OF OPERATION

While the area under sugarcane cultivation registered an increase, the quantity of cane crushed increased only marginally due to difficulties in mobilizing cane-cutting labourers. The recovery percentage remained more or less at the same level as in the previous year. Compared to the previous year, the average realization from sugar increased marginally, however this increase was insufficient to offset the higher cost of sugarcane and other input materials consumed during the year. Production of industrial alcohol was slightly lower than in the previous year. Due to lower demand for power during the peak hours, the production and export of power was also lower as compared to the previous year.

SUGAR DIVISION

The quantum of sugarcane crushed at various units of the Company during the financial year 2025-26 is as under:

During the year under review, 1.23 lakh MT of sugar was produced by the Company as compared to 1.24 lakh MT in the previous year. Although there is improvement in the selling price of sugar, the revenue of sugar division has come down during the year under review as compared to the previous financial year.

DISTILLERY DIVISION

During the year under review, 243.62 lakh litres (previous year 245.43 lakh litres) of industrial alcohol was produced at Sakthinagar Distillery Unit.

CO-GENERATION DIVISION

The total power generated in the co-generation plants during the financial year was 2032.11 lakh units (previous year 2064.31 lakh units) out of which 1230.27 lakh units (previous year 1257 lakh units) of power was exported. The Company is selling the power through Indian Energy Exchange (IEX) as well as directly to third parties.

CURRENT FINANCIAL YEAR 2026-27

During the current financial year 2026-27, due to better availability of sugarcane, the cane crush is expected to be higher than last year subject to rainfall and other climatic conditions.

DEPOSITS

The Company has not accepted any deposit during the financial year under review. At the end of the financial year, there was no unclaimed deposit.

CORPORATE INFORMATION

During the year under review, the Company assigned its interest receivable from an erstwhile associate company to a third-party debt management company in full settlement.

The Company has made an application for One Time Settlement with respect to the SDF loan availed for the Sivaganga (Co-generation) unit, and the same is under consideration by the Central Government.

A B T Investments (India) Private Limited (ABTIIPL) has transferred 1,68,60,000 equity shares of the Company to Dr.M.Manickam, Chairman and Managing Director by way of inter-se transfer on 4th May 2026. Consequent to the transfer of shares, the shareholding of ABTIIPL in the Company has reduced from 55.93% to 41.75% of the paid-up equity share capital of the Company. ABTIIPL has ceased to be Holding Company of the Company. Thereafter, the Company becomes an Associate Company of ABTIIPL with effect from 4th May 2026.

DIRECTORS

Dr.M.Srinivaasan (DIN: 00102387) retires by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

Sri M.Balasubramaniam (DIN: 00377053) and Sri M.Srinivaasan (DIN: 00102387) have been re-appointed as Managing Director and Joint Managing Director respectively for a period of five years from 27th August 2026 without remuneration subject to the approval of the Members of the Company at the ensuing Annual General Meeting.

Sri S.Chandrasekhar (DIN: 00011901) has been appointed as Additional Director with effect from 13th August 2026 to hold office upto the date of next Annual General Meeting of the Company. A notice has been received from a shareholder of the Company proposing him for appointment as a Director in the ensuing Annual General Meeting.

As mentioned in the last Annual Report, Smt.Priya Bhansali, Independent Director, retired on 30th September 2025 on completion of her second term of office as Independent Director.

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(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 as at the end of the financial year and of the profit of the Company for that financial year;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 are 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.

MEETINGS OF BOARD OF DIRECTORS

The Board met five times during the financial year ended 31st March 2026. The details of the Board Meetings and the attendance of the Directors are given in the Corporate Governance Report.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee was reconstituted on 13.8.2025. At present the Audit Committee comprises of the following Directors as its members:

1. Dr.A.Selvakumar, Chairman

2. Sri.V.K.Swaminathan

3. Sri.M.Balasubramaniam and

4. Smt.Susheela Balakrishnan

Details regarding meetings of the Audit Committee and the attendance of the members are given in the Corporate Governance Report.

BOARD EVALUATION

Pursuant to the provisions contained in the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a formal annual evaluation of the performance of the Board, its committees and of individual Directors has been made. The manner in which the evaluation was carried out and the process adopted are given in the Corporate Governance Report.

DETAILS OF REMUNERATION TO DIRECTORS

Details of ratio of remuneration to each Director to the median employees remuneration and other disclosures required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-A.

RISK MANAGEMENT POLICY

The Company has constituted a Risk Management Committee and the details of the Committee are set out in the Corporate Governance Report. Pursuant to Regulation 17(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has laid down risk management policy to identify, evaluate and mitigate risks. It seeks to ensure transparency and to minimise adverse impact on the business operations of the Company.

The Company does not have any exposure to commodity risk except to the extent of its own production of sugar, the main product of manufacture of the Company, the selling price of which is subject to market fluctuations.

INTERNAL CONTROL

The Company has internal control system commensurate with the size of the Company. Adequate procedures are set out for detecting and preventing frauds and for protecting the Companys assets. Consequent to the retirement of Sri.P.Sankararaja Pandian, Sr. Vice President (Taxation & Internal Audit) on 30th June 2026, the Audit Committee and the Board of Directors have appointed Smt.R.Jeysree, Manager (Costing) to head the Internal Audit Department of the Company (in-house) with effect from 13th August 2026. The head of Internal Audit Team reports to the Chairman of the Audit Committee for the purpose of maintaining independence and Internal Audit Reports are placed before the Audit Committee together with statement of significant audit observation and the suggested corrective action followed by a report on action taken thereon. Further the Company has adequate internal financial controls with respect to the financial statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a whistle blower policy and a vigil mechanism for Directors and employees to report genuine concerns in the prescribed manner. The vigil mechanism provides adequate safeguards against victimization and for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The details of the whistle blower policy are posted on the website of the Company. No complaint has been received under this mechanism during the year under review.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with Auditors Certificate with respect to its compliance forms part of this Report.

A detailed Management Discussion and Analysis Report also forms part of this Report.

OTHER DISCLOSURES UNDER THE COMPANIES ACT 2013

i. Annual Return

A copy of the Annual Return for the financial year 2024-25 is placed on the website of the Company www.sakthisugars.com.

ii. Changes in Share Capital

There is no change in the share capital during the financial year under review.

iii. Policy on Directors Appointment and Remuneration

The Companys policy for selection and appointment of directors, senior management personnel and fixation of their remuneration, including criteria for determining qualifications, positive attributes, independence of a director, are available in the Companys website www.sakthisugars.com and the salient features of the Policy are given in Annexure-B.

iv. All the related party transactions were on arms length basis. Prior approval of the Audit Committee and/or the Board, as the case may be, has been obtained for the transactions with related parties. A statement of all related party transactions is placed before the Audit Committee on quarterly basis.

There is no contract or arrangement with related parties attracting the provisions of Section 188(1) of the Companies Act, 2013 during the financial year under review.

The Related Party Transactions Policy as approved by the Board is available on the Companys website www.sakthisugars.com. The details of the transactions with Related Parties are provided in the accompanying financial statements.

v. Statement of declarations given by Independent Directors

The Independent Directors have given their declarations to the Board to the effect that they meet with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the relevant rules. They have also given a declaration confirming compliance with Rule 6(1) and (2) of the Companies (Appointment and Qualification of Directors) Rules 2014 regarding inclusion of their names in the databank maintained by Indian Institute of Corporate Affairs.

vi. Significant material orders passed by court or authorities

There are no significant orders passed by Court or regulatory authorities which would impact the status of the Company and its future operations.

vii. Particulars of loans, guarantees or investments

The Company has not given any loan or guarantee or has acquired any security during the financial year 2025-26 under section 186 of the Companies Act, 2013.

The Company has not given any loan or made any investment during the said financial year.

viii. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and out go as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-C.

ix. There are no material changes affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

x. The Company has complied with the Secretarial Standards as may be applicable to the Company.

STATUTORY AUDITORS

The members have appointed M/s.P.N.Raghavendra Rao & Co., Chartered Accountants, as Statutory Auditors for a term of office of five consecutive years from the conclusion of the 60th Annual General Meeting held on 24th August, 2022 till the conclusion of the 65th Annual General Meeting of the Company. The said Audit Firm has confirmed that they are not disqualified for continuing as Statutory Auditors of the Company for the financial year 2026-27.

SECRETARIAL AUDIT

Pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Sri.R.Dhanasekaran, Practicing Company Secretary, Coimbatore, was appointed as Secretarial Auditor to undertake the secretarial audit of the Company for a term of five consecutive financial years commencing from 2025-26 to 2029-30 by the shareholders at the Annual General Meeting of the Company held on 25th September 2025. Secretarial Audit Report of Sri.R.Dhanasekaran, Practicing Company Secretary, Coimbatore for the year ended 31st March 2026 is annexed as Annexure-D. As the Company does not have any subsidiary, the question of appointment of Secretarial Auditor for material subsidiary does not arise.

COST AUDIT

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. M/s. STR & Associates, Cost & Management Accountants, Tiruchirapalli, are the Cost Auditors appointed for auditing the cost accounting records relating to Sugar, Distillery and Power Divisions of the Company for the year ended 31st March 2026.

The said Firm has been appointed for the financial year ending 31st March 2027 and necessary resolution for ratification of their remuneration is included in the Notice for the ensuing Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a CSR Committee and has adopted a CSR Policy and the same is available in the Companys website www.sakthisugars.com. The composition of the CSR Committee is given in the Corporate Governance Report. The requirement of incurring expenditure towards fulfilment of its corporate social responsibility does not arise during the financial year under review.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the said Act. An Internal Complaints Committee (ICC) has been set up at every work place of business to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

As per the provisions of the said Act, the Report in details of the number of cases filed under Sexual Harassment and their disposal during the financial year under review, is as under:

COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

The Company is in compliance with the provisions of the Maternity Benefit Act, 1961 and the Maternity Benefit (Amendment) Act, 2017. Necessary benefits including paid maternity leave, nursing breaks have committed to supporting the health, safety, and well-being of its women employees.

In line with the Maternity Benefit (Amendment) Act, 2017, the Company has put in place to support women employees returning to work post maternity leave and encourages a supportive work environment for working mothers

AUDITORS REPORT

The Board considered the Auditors Report and was informed that the audit qualification reported in earlier periods in respect of the interest receivable from an erstwhile associate had been resolved during the quarter and period ended 31st December 2025 pursuant to the assignment of the said receivable. The Board further noted that the said matter has no impact on the financial results of the Company for the year ended 31st March 2026.

The Board also noted that the Statutory Auditors had expressed an unmodified opinion on the audited financial results of the Company for the quarter and year ended 31st March 2026.

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE AND SECRETARIAL AUDIT REPORT

With reference to the Statutory Auditors and Secretarial Auditor remarks, the Board noted the requirement under Regulation 17(1A) of SEBI (LODR) Regulations, 2015 to obtain the prior approval of the shareholders by way of a special resolution for the appointment of a Non-Executive Independent Director who has attained the age of 75 years. The Board also reviewed the existing compliance framework and reaffirmed the Companys commitment to strong corporate governance practices and ongoing compliance with applicable regulatory requirements.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation of the valuable assistance and co-operation extended by the shareholders, cane growers, banks, financial institutions and Government authorities. They also wish to appreciate the dedicated services rendered by officers, staff and workers of the Company.