Bannariamman Sugars Ltd.

Dear members

The Directors have pleasure in presenting the 34^th Annual Report of the company together with audited financial statements for the year ended 31^st March 2018

(Rs in lakhs)

Dividend

Your Directors are glad to recommend dividend @ Rs.10/- per share for the financial year ended March, 2018 Payment is subject to the approval of the shareholders at the ensuing Annual General Meeting

Review of Operations

Sugar

During the year under review, the aggregate cane crush was 23.72 lakh tonnes as against the estimate of 21 lakh tonnes The overall recovery was at 9.24%. Consequent to low cane crush sugar production was lower at 22.36 lakh quintals compared to 26.31 lakh quintals in the previous year. The imported Raw Sugar of 0.05 lakh tonnes was processed during the year. Lower cane crush and low recovery was mainly due to continuous drought and low yield

Power

The Co-generation plants had generated 295.88 million units of power and exported 195.13 million units of power to grids compared to the generation of 376.51 million units and export of 255.83 million units in the previous year. Lower generation was mainly due to lower bagasse availability

Distillery

During the year, the distilleries had produced 18.64 million B.Ltrs compared to the production of 30.74 million B.Ltrs in the previous year

Granite Division

In the Granite Processing Unit 163857 square metres of Granite Slabs and 30711 square metres of Tiles were produced compared to production of 178667 square metres of Granite Slabs and 16180 square metres of Tiles in the previous year

Wind Mill

Wind Mills had generated 15.38 million units of power and exported 13.41 million units to grid compared to the generation of 15.13 million units and export of 13.13 million units in the previous year

Prospects for the Current year 2018 - 2019

In the current financial year, it is estimated to crush 36 lakh tonnes of sugarcane in aggregate. Performance of co-generation plant will be based on bagasse availability in the sugar mills. It is estimated to produce 24.67 million B.Litres of alcohol in the Distillery Units. Improved working results are expected in the Distillery and Granite Division

In the current sugar season (October 2017 -September 2018), India’s sugar production is expected to exceed 32 million tones against the domestic demand of about 25 million tones which may have adverse impact on sugar prices

Directors and Key Managerial Personnel

In accordance with the provisions of Companies Act, 2013 read with the Articles of Association of the Company Sri B Saravanan, Director is liable to retire by rotation

All the independent directors have given declarations that they meet the criteria of independence as specified under Section 149 (6) of the Companies Act, 2013. All Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation

Pursuant to Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and coming into force with effect from 1.4.2019, necessary Special Resolutions have been placed before the members for continuance of Sri A K Perumalsamy and Sri T Gundan who were attained age of 75 years as independent Directors of the Company

The Company has devised a policy on director’s appointment, remuneration and for performance evaluation of independent directors, Board, Committees and other individual directors which include performance evaluation of non-executive and executive directors

The details of programmes for familiarization of independent directors with the company, their roles, rights, responsibilities in the company, nature of the industry in which the company operations, business models and related matters are placed on the website of the company at the link http://www.bannari.com/ InvestorInformation.html

Particulars of Loans, Guarantees or Investments

During the year, the company has not made any loan or guarantee or investment or provided any security under Section 186 of the Companies Act, 2013

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, Technology absorption, Foreign Exchange earnings and outgo as required to be disclosed under the Companies Act, 2013 are provided in Annexure I to this Report

Particulars of Employees

The information required as per Section 197 of the Companies Act 201 3 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in Annexure II forming part of this Report

Meetings of the Board

Five Meetings of the Board of Directors were held during the year. The details are furnished in the Report on Corporate Governance attached herewith

Committees and Policies

The company has constituted Board Committees and framed policies as required under the provisions of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details are furnished in the Corporate Governance Report attached herewith

Corporate Governance and Management Discussion and Analysis Report

A separate section on Corporate Governance, Management Discussion and Analysis Report and a certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as required under the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed as Annexure - III

Corporate Social Responsibility Committee

Pursuant to Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014 the company has formulated a policy on Corporate Social Responsibility. Your Company’s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2018, in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure IV to this report

Risk Management / Risk Management policy

As per Regulation 21 of the SEBI (LODR) Regulations, 2015, constitution of Risk Management Committee is not mandatory for the company. However the company has constituted Risk Management Committee and formulated a Risk Management Policy including risk assessment and minimization procedures The Risk Management Committee has been assigned with the functions of monitoring and reviewing the risk management plans of the company. In the opinion of the Board no element of risk that may threaten the existence of the company has been identified

Vigil Mechanism/Whistle Blower Policy

The company has established vigil mechanism for Directors and Employees to report concerns about the unethical behavior, actual or suspected incidents of fraud or violation of the code of conduct or ethics policy. The Whistle Blower Policy is posted in the company’s website at the link http://www. bannari.com/InvestorInformation.html

Dividend Distribution Policy

The company has formulated and adopted Dividend Distribution Policy which is posted in the company’s website at the link http://www.bannari.com/ InvestorInformation.html

Related Party Transactions

All the related party transactions are entered on arm’s length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and other relevant Regulations as referred under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There is no materially significant related party transaction made by the company with Promoters, Directors or Key Managerial Personnel etc which may have potential conflict with the interest of the company at large and therefore disclosure in

Form AOC-2 is not required. All the related party transactions are placed before the Audit Committee and approved by the Audit Committee. Prior omni bus approval of the Audit Committee was obtained on annual basis for the transactions which are at a forseen and repetitive nature. The Related Party Transactions Policy as approved by the Board is uploaded on the company’s website at http://www.bannari.com/ InvestorInformation.html

The details of transactions with Related Parties are provided in the accompanying financial statements.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Independent Directors at their meeting without participation of non-independent directors and management considered and evaluated the Boards’ performance, Performance of the Chairman and Managing Director

The criteria applied in the evaluation process are detailed in the Corporate Governance Report which forms part of this report. The Board has carried out an annual evaluation of its own performance, the performance of the committees, board, independent Directors and individual Directors

Material changes and commitments

There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2017-18 and the date of this report

Directors’ Responsibility Statement

As stipulated in Section 134(3)(c) and 134 (5) of the Companies Act 2013 your Directors confirm that

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

b) they 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 of the company for that period;

c) they had 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) they had prepared the annual accounts on a going concern basis;

e) they 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Business Responsibility Report (BRR)

The Company is not in Top 500 companies based on market capitalisation as on March 31, 2018. Hence it is not required to attach Business Responsibility Report (BRR) with Annual Report

Extract of Annual Return

The extract of Annual Reeturn in MGT 9 is annexed as Annexure - V

Auditors / Auditors’ Report

M/s P K Nagarajan & Co., Chartered Accountants Coimbatore was appointed as the Statutory Auditors of the company at the 33rd Annual General Meeting of the Company for a period of five years and they shall hold office till the conclusion of 38th Annual General Meeting. In accordance with the amended provisions of Section 139, ratification at every subsequent Annual General Meeting is not required

The Auditors’ Report given by M/s P K Nagarajan & Co., on the financial statements of the company for the financial year 2017-18 does not contain any qualification, reservation or adverse remark

Secretarial Auditors and Secretarial Audit Report

M/s C Thirumurthy & Associates, Company Secretaries, Coimbatore has been appointed as Secretarial Auditor to conduct secretarial audit for the financial year 2017-2018. The Report of Secretarial Auditors is annexed to this report as Annexure VI. The Report does not contain any qualification, reservation or adverse remark

Internal Control Systems and their Adequacy

Details of internal control system and their adequacy are provided in the Management Discussion Analysis Report attached herewith

Cost Audit

Sri M Nagarajan, Cost Accountant, Coimbatore was appointed as Cost Auditor to conduct audit of cost accounting records for the financial year 2017-18

Industrial Relations

The relationship with employees continued to remain cordial throughout the year under review

General

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

a) Details relating to deposits covered under Chapter V of the Act

b) Issue of equity shares with differential rights as to dividend, voting or otherwise

c) Issue of shares (including sweat equity shares) to employees of the company under any scheme

d) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future

Your Directors further state that during the year under review, no cases were filed pursuant to the Sexual Harassment or Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Acknowledgement

Your Directors acknowledge with gratitude the timely support extended by the Government of India, Governments of Tamilnadu and Karnataka and other authorities, banks and other business associates. Your Directors thank the cane growers who have supplied sugarcane to the factories and wish to place on record their appreciation of the contributions made by all the employees

By order of the Board

S V BALASUBRAMANIAM

Coimbatore Chairman

25.5.2018 DIN : 00002405