Directors Report of Sri Chamundeswari Sugars Ltd.

Mar 31, 2015

Dear Members

The Directors have pleasure in presenting the 42nd Annual Report together with the Audited Financial Accounts of the Company for the financial year ended 31st March, 2015.

FINANCIAL RESULT

Rs, in Lakhs

Particulars 2014-15 2013-14

Profit Before Interest and

Depreciation 2373.07 3293.04

Less: Interest 3070.24 3076.05

Depreciation and

Amortization 1259.91 4330.15 1819.35 4895.40

Profit / (Loss) Before Tax (1957.08) (1602.36)

Less : Income Tax Expenses

Deferred Tax Liability/

(Asset) (586.09) (519.89)

Profit / (Loss) after Tax (1370.99) (1082.47)

Review of Operations:

Division wise performance is as under:

Units Cane Sugar Recovery Producation Co-generation Crushed Produced of Alcohol (power Generation Lakh MTs Lakh Qtls. (%) Lakh Ltrs. Crore Units

Bhara thinagara

2014-2015 6.52 6.05 9.39 131.24 11.25

2013-2014 6.18 5.74 9.21 146.83 10.49

Srini vasapura

2014-2015 2.14 2.00 9.33 - -

2013-2014 2.12 2.06 9.61 - -

During the year under review the alcohol and power prices were steady. The agreement for development of part of Real Estate Assets has been re-negotiated. The Company had incurred losses mainly due to depleted sugar prices which went down as low as Rs, 22.80 per KG (During March 2015)

The Kamataka Sugarcane (Regulation of Purchase & Supply) Act, 2013 has been amended enabling the sugar factories to start the crushing operations by paying applicable FRP. Accordingly your factory has started crushing operations by paying the FRP applicable to your Company.

The Company is in the process of expansion of production capacity at sugar unit - II, located at Srinivasapura, Hassan District along with 18 MW Co-generation plant and upgrading the technology at unit - I, located at Bharathinagara, Mandya District to optimize the performance.

DIVIDEND

Due to inadequacy of profits, the directors are not recommending any dividend.

INFORMATION ABOUT SUBSIDIARY/JV/ASSOCIATE COMPANY

Company does not have any Subsidiary, Joint venture or Associate Company.

TRANSFER OF UNCLAIMED DIVIDEND / DEPOSIT TO INVESTOR EDUCATION AND PROTECTION FUND

As per the provisions of Section 205 (c) of Companies Act, 1956, the unclaimed deposits have been transferred to the Investor Education and Protection Fund account on 17th January, 2015 amounting to a total of Rs,. 1,79,040/-

MATERIAL CHANGES AND COMMITMENTS

No Material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of this report.

There is no change in the nature of business of the company.

EXTRACTOF ANNUAL RETURN

The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed.

DIRECTORS'RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 read with Section 134(5) of the Companies Act, 2013, is hereby confirmed 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors 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) 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.

AUDITORS and AUDITORS REPORT thereon

M/s P.N. Raghavendra Rao & Co. (Firm Regn. No. 003328S), Chartered Accountants, who were re-appointed as Statutory Auditors for a period of 3 years at the Annual General Meeting held on 25th September, 2014. Their re-appointment and payment of remuneration are to be ratified in the ensuing Annual General Meeting in accordance with the provisions of Section 139 (1) of the Companies Act, 2013.

With regard to Auditor's remark on public deposits, we wish to state that an application has been made under section 74 (2) of the Companies Act, 2013 to Company Law Board, Chennai Bench seeking time till 31.03.2016 for the repayment of deposits and the order Is awaited, The Notes on financial statements are self-explanatory.

LOANS, GUARANTEES AND INVESTMENTS

There were no loans, guarantees or Investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision Is not applicable

RELATED PARTY TRANSACTIONS

All the transactions with the related parties are in the ordinary course of business and on arm's length basis, thus disclosure in form AOC-2 is not required.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) Conservation of energy: - Modification of Condensate Heater for Raw Juice to recover the waste (i) Steps taken / impact on conservation of energy / thermal Energy from condensate water.

Heat and Electrical Energy, with special reference to - Usage of IV Body vapour bleeding to raw juice.

The following: . Usage of III Vapour for all the Molasses conditioners.

- Usage of III Vapour for B-Continuous pan boiling.

- Usage of Direct contact heater for clear juice heating to get minimum approach of temperature.

- Periodical Energy / Thermal Audit has been carried out in SUGAR And COGEN divisions to reduce energy requirement thereby enhancing the power exported.

The above measures against conservation of thermal energy have helped to reduce the steam % cane to the tune of 2.50% on cane for the season 2014- 2015.

(ii) Steps taken by the company for utilizing alternate The Company primarily uses bagasse and green power, supplying the sources of energy including waste generated surplus power to state grid.

(iii) Capital investment on energy conservation The company has invested aboutRs, 20.00 Lakhs in thermal energy saving.

equipment

(B) Technology absorption:

1. Efforts, in brief, made towards technology Planting of sugarcane was initiated through single eye bud sets by procuring absorption. "Bud cutting machine" and started production of single eye budded sugarcane seedlings in Factory Nursery Farm and supplied to Farmers.

2. Benefits derived as a result of the above efforts, Research were made with direct planting of single eye Bud sets and saplings e.g., product improvement, cost reduction, through the Nursery with same single bud sets. The sugarcane through product development, import substitution, etc. Nursery produces the better result of extra tillers by 30% and the length of the Node is also 15 cms against 10-11 cms of direct plantation of sugarcane sets/chips. Almost 1,14,000 Seedlings of CO86032 were issued to farmers . As a result Higher yield and recovery is achieved.

3. In case of imported technology (imported during the last 3 years reckoned from the beginning of Nil the financial year), following information may be furnished:

a) Details of technology imported.

b) Year of import.

c) Whether the technology been fully absorbed

d) If not fully absorbed, areas where absorption has not taken place, and the reasons therefore.

4. Expenditure incurred on Research and Nil Development

RISK MANAGEMENT

Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the action taken to manage them. The Company has formulated a policy for Risk management.

DIRECTORS and KEY MANAGERIAL PERSONNEL

During the current financial year the following changes have occurred in the constitution of Directors / KMP of the company:

Date of S. Name Designation Appointment/ Appointment/ No cessation Cessation

1 Dr. N Mahalingam Chairman 02.10.2014 Demise

2 Shri K N V Ramani Director 20.03.2015 Resignation

3 Shri K Prakash Director 23.03.2015 Resignation

4 Shri Vignesa Company 07.03.2015 Resignation Somathurai Secretary Pandian (KMP)

5 Shri M Rajendra Company 30.03.2015 Appointment prasath Secretary (KMP)

Dr. N. Mahalingam, Chairman of the Company passed away on 2nd October 2014. He was the Chairman of the Company for more than 4 decades. His advice and guidance immensely benefitted the company in its growth and adherences to good corporate practices. His overall contribution is immeasurable to the group as a whole and our company in particular. We pledge to follow his high standards in the conduct of business and in all activities.

RESIGNATION OF DIRECTORS

Shri K.N.V Ramani and Shri K Prakash resigned from the board on 20.03.2015 and 23.03.2015 respectively. The board places its appreciation for their outstanding contributions during their tenure of their office.

DEPOSITS

The Company has not accepted any deposits during the year. As per section 74 of the Companies Act, 2013 the Company should have repaid all the deposits even though it is not matured. As per that section the unpaid Fixed Deposit amount to Rs, 11,68,00,000/- (553 depositors). An application has been made under section 74 (2) of the Companies Act, 2013, seeking extension of time till 31.03.2016 or as on the date of maturity whichever is earlier for the repayment of these deposits. All the deposits matured / claimed during the year have been paid. The unclaimed deposits as on 31.03.2015 is Rs, 26,09,000/- (26 depositors)

CORPORATE SOCIAL RESPONSIBILITY

As there have been no profits available during the year, provisions of section 135 pertaining to corporate social responsibility are not applicable to the Company. As per Section 135(5) of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and schedule VII of the Companies Act, 2013, the company has duly constituted CSR Committee. The committee would decide the activities to be undertaken by the company and the expenditures to be incurred on the same and recommended the same to the board therefore the board approved the CSR policy.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES

a) The ratio of the remuneration Shri. M. Srinivaasan, of each director to the median Managing Director-1:14 remuneration of employees for the financial year:

b) The percentage increase in There is no increase in the actual remuneration of each director, remuneration paid to Managing Chief Financial Officer, Chief Director for the Financial Year Executive Officer, Company 2014 - 2015. However, last year Secretary or Manager, if any, in there was a reduction in the The financial year: remuneration on account of the set off of remuneration paid by another Company, in which he is a Joint Managing Director, in terms of Section II of Part II of Schedule XIII of the Companies Act, 1956.

Other Directors/KMPs- NIL c)The percentage increase in the median remuneration of Nil employees in the financial year:

d) The number of permanent employees on the rolls of company:

e) The explanation on the

NA relationship between average increase in remuneration and company performance:

f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:

Name Designation CTC increase The revenue from in CTC operations had Shri.M.Srini vaasan Managing 28.48 Nil increased from Rs, Director lakhs 3023676 lakhs t0 Rs, 35967.96 lakhs. The Shri.J.U. Srinivasan Chief 11.36 Nil remuneration paid Financial lakhs to Key Managerial Officer Personnel has no

Shri.Vignesa Company 6.52 Nil direct correlatation Somathurai Secretary lakhs the performance of the company but Pandlan determined in the (Resigned wef normal course of 07.03.2015) business

g) Variations in market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer

Particulars FY 2013-14 FY 2014-15 Variation (%) Market Capitalization (Rs, crores) Rs, 60.27 Rs, 42.67 (29.20%)

Price Earnings Ratio N.A N.A -

h) Average percentage increase Average incfease jn sa,aries

already made in the salaries of 0.73% for Emp|oyees other than

employees other than the Managerlal Personnel.

managerial personnel in the last

financial year and its

comparison with the percentage

increase in the managerial

remuneration and justification

thereof and any exceptional

circumstances for increase in the

managerial remuneration:

i) Comparison of the each Refer point

(f) above S remuneration of the key ;

managerial personnel against

the performance of the company

j) The key parameters for any Except for the Managing

variable component of Director and Executive Director

remuneration availed by the (only for April, May & June 14)

directors: (only to Executive Director) no

directors have been paid any

remuneration, as only Sitting

Fees are paid to them. Variable

component is paid, as per the

Compensation Policy of the

Company

k)The ratio of the remuneration

No employee is remunerated

of the highest paid director to

more than the directors that of the employees who are

not directors but receive

remuneration in excess of the

highest paid director during the

year

I) Affirmation that the It is affirmed that the

remuneration is as per the remuneration is as per the

remuneration policy of the remuneration policy of the

company company

ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non Independent Directors ; was carried out by the Independent Directors.

CORPORATE GOVERNANCE

I Report on Corporate Governance along with the Certificate of the Auditors confirming compliance of conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges forms part of the Board Report.

INDEPENDENT DIRECTORS and DECLARATION

:Dr. M R Desai has been appointed as the independent director of the company as per Section 149(10) of the Companies Act, 2013 on25th September, 2014 for a term of 5 consecutive years on the Board of the Company.

Dr. A Selvakumar has been appointed as the independent director of the company as per Section 149(10) of the Companies Act, 2013 on 25th September, 2014 for a term of 5 consecutive years on the Board of the Company.

Shri A Arjunraj has been appointed as the independent director of the company as per Section 149(10) of the Companies Act, 2013 on 25th September, 2014 for a term of 5 consecutive years on the Board of the Company.

Smt Susheela Balakrishnan has been appointed as an additional director of the company on 30th March 2015 subject to the approval of the members at the ensuing AGM. If the resolution for her appointment gets passed in the ensuing AGM, she will be an Independent director as per section 149(10)of the Companies Act, 2013 for a period of five consecutive years.

The Board of Directors of the Company hereby confirms that all the Independent directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report as provided by Shri. M Thirupal Gorige, Practicing Company Secretary for the financial year ended, 31st March, 2015 is annexed herewith.

With regard to Secretarial Auditor's remark on public deposits, we wish to state that an application has been made under section 74(2) of the Companies Act, 2013 to Company Law Board, Chennai Bench seeking time till 31.03.2016 for the repayment of deposits and the order is awaited. In respect of dividend for Cumulative Non convertible preference share, the company did not declare any dividend, as the company incurred loss during the said year.

COST AUDIT

Shri M.R Krishnamurthy (Membership No.7568), Cost Accountant, was appointed as the Cost Auditor of the Company and their Audit report on the Cost Accounts of the Company for the period ended March 31, 2015, will be submitted to the Central Government in due course.

In terms of the Companies (Cost Accounting Records and Compliance)Rules, 2011, Cost Audit Report for the year ended 31st March, 2014 was filed on 27.09.2014 and the due date for the same being 27.09.2014.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY As per Section 177(9) and (10) of the Companies Act, 2013, and as per the Clause 49 of the Listing Agreement, the company has established Vigil Mechanism for directors and employees to report genuine concerns and made provisions for direct access to the Chairperson of the Audit Committee. Company has formulated the present policy for establishing the Vigil Mechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders, Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company.

SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

ORDERS PASSED BY REGULATORS/COURTS/TRIBUNALS.

During the year the Company has not received any significant and material order from regulators/courts/tribunals impacting the status of going concern and future operations of the company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company is having an adequate Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134 (5) (e) IFC of the Companies Act, 2013. For the year ended 31st March, 2015, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations; wherein controls are in place and operating effectively and no material weaknesses exist. The Company has also a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and /or improved controls wherever the effect of such gaps would have a material effect on the Company's operation.

SHARES IN UNCLAIMED SUSPENSE ACCOUNT MSI

Particulars No of Shareholders No of Shares

Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year 2,689 2,22,197

Number of shareholders who approached the issuer for transfer of BSB shares from the Unclaimed Suspense Account during the year Nil Nil

Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year Nil Nil

Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year 2,689 2.22.197 $&&$

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year under review the human relations continued to be very cordial. The Company wishes to acknowledge the contribution of the employees at all levels of the organization.

The Company has placed an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints for sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints received for disposal off during the year.

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation to the continued co-operation received from the Banks, Government Authorities, Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service of the Executives, staff and Workers of the Company.

For and on behalf of the Board of Directors

Date : 07.08.2015 M. Srinivaasan V.K. Swaminathan

Place: Coimbatore Managing Director Director

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Mar 31, 2014

Dear Members

The Directors present their 41st Annual Report together with Audited Financial Accounts of the Company for the year ended 31st March 2014.

FINANCIAL RESULT

? in Lakhs

Particulars 2013-14 2012-13

Profit Before Interest and

Depreciation 3293.04 4442.09

Less: Interest 3076.05 2361.78

Depreciation and Ammortisation 1819.35 4895.40 1730.66 4092.44

Profit / (Loss) Before Tax (1602.36) 349.65

Less : Income Tax Expenses - 69.96

Deferred Tax Liability/(Asset) (519.89) 113.45

Add: MAT Credit Entitlement - (519.89) 69.96 113.45

Profit / (Loss) after Tax (1082.47) 236.20

REVIEW OF OPERATIONS

Division-wise Performance is as under:

Cane Sugar Production Co-generation Units Crushed Produced Recovery of Alcohol (power Generated) Lakh MTs Lakh Qtls. (%) Lakh Ltrs. Crore Units

Bharathinagara 2013 - 2014 6.18 5.74 9.21 146.83 10.49

2012 - 2013 8.95 7.95 8.82 159.38 11.42

Srinivasapura 2013 - 2014 2.12 2.06 9.61 - -

2012 - 2013 2.14 2.04 9.52 - -

During the year under review, the Company had incurred Loss due to reduction in average selling price per quintal of Sugar from ?3011.28 (YE.31.03.2013) to ?2763.39 for the year ended 31st March 2014 coupled with lower cane crush and higher interest cost.

Change in Sugar and Sugarcane Policy

The Sugarcane pricing policy based on Revenue Sharing Formula as recommended by Dr. C Rangarajan Committee has been delegated by the Government of India to the respective State Government for implementation. The Government of Karnataka has promulgated The Karnataka Sugar (Regulation of Purchase and Supply) Act 2013, which is further amended in July 2014. The provisions of this act have to be implemented at the earliest to solve problems relating to Cane Price Fixation.

The Government of India has announced "Scheme for Extending Financial Assistance to Sugar Undertaking, 2014", and under the scheme, the sugar producing mills can borrow Term Loan equivalent to Excise Duty paid during the preceding three years, for which the Government of India has extended an Interest subvention of 12%. The loan is repayable in 5 years with a moratorium of 2 years.

Current Year Outlook

The All India Sugar Production is expected to be higher than the Sugar year 2013-14. Therefore, the Sugar price would continue to be under pressure due to excess stock. The World Market is also depressed and therefore there may not be much scope for sustained export from the Country.

The Company is supplying power through open access and to State Grid under Short Term Tender process with some intervals. The neighbouring States like Andhra Pradesh, Kerala have also resorted to purchase power through tender process and pay a higher tariff. This will result in a higher average realization during the year.

The Distillery is also expected to realize better revenue consequent to the implementation of the Ethanol blending programme by the Government of India with the proposed increase in the percentage of blending from 5% to 10%.

Deposits

All Fixed Deposits and Cumulative deposits matured and claimed as on 31.03.2014 have been paid. At the end of the financial year, 17 deposits amounting to Rs.8,95,521/-, which were due for repayment remain unclaimed.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars required to be included in terms of Section 217(1)(e) of the Companies Act, 1956 with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in Annexure - I to this report.

Particulars of Employees:

The Company has no employees drawing remuneration attracting the provisions of section 217 (2A) of the Companies Act, 1956.

Directors:

Shri K N V Ramani and Dr M R Desai, Directors of the Company retire by rotation at the ensuing Annual General Meeting and are being appointed as Independent Directors for a term of five years from 25.09.2014 to 24.09.2019. Dr A Selvakumar and Shri A Arjunaraj, Directors are also being appointed as Independent Directors for a term of five years from 25.09.2014 to 24. 09.2019.

Nomination & Remuneration Committee:

Nomination & Remuneration Committee is constituted in the place of Remuneration Committee at the Board Meeting held on 29th May 2014. The members of the Committee are 1) Shri K N V Ramani, Chairman of the Committee, 2) Shri A Arjunaraj 3) Dr A Selvakumar and 4) Dr. M R Desai. The Scope of the Committee is to formulate the criteria for determining the qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, Key Managerial Personnel and other employees.

Stakeholders'' Relationship Committee:

Stakeholders'' Relationship Committee is constituted in the place of Shareholders'' / Investors'' Grievance Committee at the Board Meeting held on 29th May 2014.The members of the Committee are 1) Dr M R Desai, Chairman of the Committee, 2) Shri M Srinivaasan and 3) Shri M Balasubramaniam. The scope of the Committee is to consider and resolve the grievances of the security holders of the company.

Auditors: Statutory Auditors:

M/s. P.N. Raghavendra Rao & Co., (Firm Regn. No. 003328S) Chartered Accountants, who were appointed as Auditors at the previous Annual General Meeting hold office till the conclusion of this Annual General Meeting and are eligible for re-appointment.

Cost Audit:

Pursuant to Section 233B of the Companies Act, 1956 with respect to the appointment of Cost Auditor, Shri M.R Krishnamurthy, (Membership No. :7568) Cost Accountant was appointed as Cost Auditor for the year ended 31.03.2014.

For the year ended 31-03-2014

Date of Appointment: 29.05.2013

Due Date of filing Cost Audit Report:27.09.2013

Actual Date of filing Cost Audit Report:27.09.2013

Directors'' Responsibility Statement:

Pursuant to requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

i) that in the preparation of the annual accounts for the financial year ended 31.03.2014, the applicable accounting standards had been followed.

ii) that the directors had selected such accounting policies and applied them consistently and made judgements 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 Loss of the company for the year under review.

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) that the directors had prepared the annual accounts on a going concern basis.

Corporate Governance:

As per the requirement of the Listing Agreement, a Report on Corporate Governance together with Auditors'' Certificate and its compliance is included as part of the Annual Report.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report as required under the Listing Agreement is given in the Section on Corporate Governance.

Acknowledgement:

Board of Directors wish to express their thanks to all the Cane Growers, Shareholders, State and Central Governments, Financial Institutions, Consortium of Bankers, Local Authorities and also appreciation to the Employees at all levels for their services and excellent support rendered to the Company.

By order of the Board

Date : 14.08.2014 M. Srinivaasan K. Prakash

Place : Coimbatore Managing Director Executive Director

Annexure - I

Disclosure of Particulars in the Report of Board of Directors Rule, 1988

A) Conservation of Energy:

(a) Energy conservation measures taken

Periodical Energy Audit has been carried out in SUGAR and COGEN Divisions to reduce energy requirement thereby enhancing the Power Exported.

(b) Additional investment and proposals if any being implemented for reduction of conservation of energy The Company is in the process of implementing energy efficiency measure with respect to heat and electrical energy.

(c ) Impact of measures (a) and (b)

The above measure will reduce the steam and energy consumption per ton of Sugarcane crushed.

(d ) Particulars of energy consumption and energy consumption per unit of production in the Sugar factories

Given in Form - A of the Annexure.

B) Technology Absorption:

Technology absorption is made as per Form-B of the Annexure.

C) Foreign Exchange Earnings and Outgo:

Foreign Exchange used – Rs. 6.63 Lakhs

Foreign Exchange earned – Nil

Form - A

Disclosure of Particulars with respect to Conservation of Energy of Sugar Division

Form - B

Disclosure of Particulars with respect to Technology Absorption

Research and Development (R&D):

1. Specific areas in which R & D carried out by the company.

a) Development of high sucrose varieties vide Covc-99463 along with three other varieties namely CO419, CO86032 and CO7804

b) Trials were conducted in the Farmers field subsequent to R & D for single eye bed system with the new variety CO419 and CO86032.

2. Benefits derived as a result of the above R & D

a) Economic Water consumption

b) Easy inter cultural operations and reduction in cost of cultivation

c) Increase in yield and recovery

d) Decomposition of Organic Wastes in between the rows which results to improvement in soil fertility and increase of Cane yield per acre.

3. Future Plan of Action

a) Introduction of Inter Cropping with legumes and short duration vegetable for Enrichment of Soil fertility and increase in yield

b) Multiplication of high yielding high sucrose varieties by single seedling method.

c) Popularising 6 feet spacing in sugar cane cultivation with inline drip irrigation system.

Technology Absorption, Adaption and Innovation:

1. Specific areas in which Technology Absorption carried out by the Company - Nil

2. Benefits derived as a result of the above Technology Absorption - Nil

3. Future Plan of Action - Nil

By order of the Board

Date : 14.08.2014 M. Srinivaasan K. Prakash Place : Coimbatore Managing Director Executive Director

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Mar 31, 2012

The Directors present their 39th Annual Report together with Audited Financial Accounts of the Company for the year ended 31st March 2012.

FINANCIAL RESULT Rs. in Lakhs

Particulars 2011-12 2010-11

Profit Before Interest and Depreciation 4752.23 7723.78

Less: Interest 2294.49 3346.30

Depreciation and Ammortisation 1754.12 4048.61 1742.59 5088.89

Profit Before Tax 703.62 2634.89

Less: Income Tax Expenses 140.79 525.15

Deferred Tax Liability 228.29 831.18

Add: MAT Credit Entitlement 140.79 228.29 525.15 831.18

Profit after Tax 475.33 1803.71

REVIEW OF OPERATIONS

Division-wise Performance is as under:

Cane Sugar Recovery Production Co-generation Units Crushed Produced of Alcohol (power Generated) Lakhs MTs Lakhs Qtls. (%) Lakhs Ltrs. Crores Units

Bharathinagara

2011-2012 8.05 7.02 8.71 161.76 11.10

(2010-2011) (7.94) (7.35) (9.26) (152.20) (14.21)

Srinivasapura

2011-2012 2.68 2.60 9.72 - -

(2010-2011) (2.59) (2.49) (9.62) - -

During the year under review, the process of manufacturing refined sugar was implemented and during the implementation period the sugar recovery was lower than normal. Power generated in co-gen is lesser compared to previous year due to non-operation of plant in off- season on account of un-economical power prices. Lower recovery, higher cane price and sub-optimal operations of the co-generation unit, had impacted profits.

Current year:

Due to failure of monsoon, the cane crushing is expected to be at 8.5 lakhs tonnes only. The prices of sugar and distillery products are expected to be better than previous years. Inspite of lower crush, your Directors are optimistic of favourable working results.

Status of FPO proposal

In view of the present capital market scenario, the proposed FPO of the Company is put on hold for the time being and would be relooked into at an appropriate time.

Expansion:

All the preliminary works for the establishment of co-gen plant of 18MW and sugar expansion from 1250 to 3500 tonnes per day at Srinivasapura unit are being carried out. The financial closure is expected to be completed during the year. Both the projects are expected to be completed within 18 Months from financial closure.

Deposits

All Fixed Deposits and Cumulative deposits matured and claimed as on 31.03.2012 have been paid. At the end of the financial year, 17 deposits amounting to Rs. 11,62,524/-, which were due for repayment remained unclaimed.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Out Go:

The particulars required to be included in terms of Section 217(l)(e) of the Companies Act, 1956 with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in Annexure-I tothisreport.

Particulars of Employees:

The Company has no employees drawing remuneration attracting the provisions of section 217 (2A)ofthe Companies Act, 1956.

Directors:

Dr. M. Manickam, Shri M. Balasubramaniam, Shri S. Srinivasan are liable to retire by rotation in the ensuing Annual General Meeting and are eligible for reappointment.

Auditors:

M/s. P.N. Raghavendra Rao & Co., Chartered Accountants, who were appointed as Auditors at the previous Annual General Meeting hold office till the conclusion of this Annual General Meeting and are eligible for re-appointment.

Cost Audit:

Pursuant to Section 233B of the Companies Act 1956 with respect to the appointment of Cost Auditor, Shri M.R Krishnamurthy, Cost Accountant was appointed as Cost Auditor for the year ended 31.03.2012.

For the Year Ended 31-03-2011

Date of Appointment: 17.06.2011

Due Date of filing Cost Audit Report: 27.09.2011

Date of filing Cost Audit Report: 21.10.2011

Directors' Responsibility Statement:

Pursuant to requirements under Section 217 (2AA) of the Companies Act 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

i) that in the preparation of the annual accounts for the financial year ended 31.03.2012, the applicable accounting standards had been followed.

ii) that 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 of the company for the year under review.

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

(iv) that the Directors had prepared the annual accounts on a going concern basis

Corporate Governance:

As per the requirement of the Listing Agreement, a Report on Corporate Governance together with Auditor's Certificate and its compliance is included as part of the Annual Report.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report as required under the Listing Agreement is given in the section on Corporate Governance.

Acknowledgment:

Board of Directors wish to express their thanks to all the Cane Growers, Shareholders, State and Central Governments, Financial Institutions, Consortium of Bankers, Local Authorities and also appreciation to the Employees at all levels for their services and excellent support rendered to the Company.

By order of the Board

Date: 14th August 2012 M. Srinivaasan V.K. Swaminathan

Place: Coimbatore Managing Director Director

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Mar 31, 2011

Dear Members,

The directors present their 38th Annual Report together with Audited Financial Accounts of the Company for the year ended 31st March 2011.

FINANCIAL RESULT

Particulars Rs. in Lakhs

Profit Before Interest and - 7,723.78 Depreciation

Less: Interest 3,346.30 -

Depreciation and 1,742.59 5,088.89 Ammortisation

Profit Before Tax - 2,634.89

Less : Income Tax Expenses 525.15 -

Deferred Tax Liability 831.18 -

Add : MAT Credit Entitlement 525.15 831.18

Profit After Tax - 1,803.71

Add : Surplus from the - 1,744.32 Previous Year

- 3,548.03

Less: Appropriations

Preference Dividend Paid 200.00 -

Tax on Dividend 33.22 -

Capital Redemption Reserve 500.00 -

Transfer to General Reserve 1,500.00 2,233.22

Surplus Carried over to 1,314.81 Balance Sheet

REVIEW OF OPERATIONS

Division-wise Performance is as under:

Units Cane Raw Sugar Recovery Crushed Sugar Produced Lakts MTs MTs Lakte Qtls. (%) Bharathinagara 7.94 Nil 7.35 9.26 2010-2011 (4.45) (3.374) (4.17) (8.65) (2009-2010)

Srinivasapura 2.59 Nil 2.49 9.62 2010 2011 (1.52) Nil (1.42) (9.42) (2009-20)0)

Units Production Co-generation of Alcohol (Power Generated) Lakhs Ltrs Cores Units Bharathinagara 152.20 14.21 2010-2011 (93.80) (9.22) (2009-2010)

Srinivasapura - - 2010 2011 - - (2009-20)0)

During the year under review, the sugar cane crush was higher compared to previous year resulting in increased turnover. Inspite of lower realization of sugar prices and increased cost of inputs compared to previous year, the profits are higher on account of higher sugar cane crush.

Future Outlook

Expansion:

M/s. Indian Renewable Energy Development Agency Limited have sanctioned a term loan of Rs.76 Crores for the establishment of COGEN Power Plant of 18 MW capacity at Srinivasapura unit. The project is under implementation. The Sugar expansion programme at Srinivasapura Unit from 1250 TCD to 3500 TCD is under progress.

New Equity Capital:

The preliminary work for issue of equity to public is almost completed.

Current Year:

In the current year the sugar prices continue to be low. The cane availably is adequate and in both the units it is expected to crush approximately 11 lakh tonnes. Your directors are optimistic of favourable working results provided the cost of inputs mainly sugar cane does not increase to very high level without corresponding increase in sugar, distillery and power realization.

Deposits

All Fixed Deposits and Cumulative deposits matured and claimed as on 31.03.2011 have been paid. At the end of the financial year, 11 deposits amounting to Rs. 5,13,696/-, which were due for repayment remain unclaimed.

Issue of Bonus Shares

The Company has issued and allotted 61,13,582 equity shares during the financial year by way of bonus shares in the ratio of 1:3 by capitalization of reserves of the Company.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Out Go:

The particulars required to be included in terms of Section 217(1)(e) of the Companies Act, 1956 with regard to conser- vation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure - I to this report.

Particulars of Employees:

Particulars of employees as required under section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 and forming part of this report have been provided in Annexure - II to this report.

Directors:

Sri K.N.V. Ramani, Sri V.K. Swaminathan and Sri A. Arjunaraj are liable to retire by rotation in the ensuing Annual General Meeting and are eligible for reappointment. Further, Dr. Mallappa Rachappa Desai, Additional Director is to be appointed as Director by the shareholders in the ensuing Annual General Meeting.

Auditors:

M/s. P.N. Raghavendra Rao & Co., Chartered Accountants, who were appointed as auditors at the previous Annual General Meeting hold office till the conclusion of this Annual General Meeting and are eligible for re-appointment.

Cost Audit:

The Central Government has approved the appointment of Sri. G. I. Srinivasa Murthy, Cost Accountant as Cost Auditor for the year ended 31.03.2011.

Director's Responsibility Statement:

Pursuant to requirements under Section 217 (2AA) of the Companies Act 1956 with respect to Director's responsibility statement, it is hereby confirmed:

i) that in the preparation of the annual accounts for the financial year ended 31 03.2011, the applicable accounting standards had been followed.

ii) that 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 of the company for the year under review.

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) that the directors had prepared the annual accounts on a going concern basis.

Corporate Governance:

As per the requirement of the Listing Agreement, a Report on Corporate Governance together with Auditor's Certificate and its compliance is included as part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report as required under the Listing Agreement is given in the Section on Corporate Governance.

ACKNOWLEDGEMENT:

Board of Directors wish to express their thanks to all the Cane Growers, Shareholders, State and Central Governments, Financial Institutions, Consortium of Bankers, Local Authorities and also appreciation to the Employees at all levels for their services and excellent support rendered to the Company.

By order of the Board

M.SRINIVAASAN V.K.SWAMINATHAN Managing Director Director

Date : 20th May 2011 Place : Coimbatore

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Mar 31, 2010

The directors present their 37th Annual Report together with Audited Financial Accounts of the Company for the year ended 31st March 2010. Financial Result

Particulars. Rs. Rs.

Profit Before Tax 16,88,34,191

Less : Prior year taxes & Provisions 7,72,790 Provision for MAT tax 2,86,93,371

Deferred Tax (Net) 5,27,61,843 8,22,28,004

8,66,06,187 Add : MAT Credit Entitlement 2,86,93,371

Profit After Tax 11,52,99,558

Add : Surplus from the previous year 5,91,31,955

Surplus Carried over to Balance Sheet 17,44,31,513

REVIEW OF OPERATIONS

Division wise performance is as under.

Units Cane Faw Soger Sugar Racowry Production Cc-generatlon

Crushed Pracantd Produced of Alcohol (Power Generated)

Lakh MTs MTs Lakh Otis (%) Lakh Ltts Crore Units

Bharathinagara

2009-2010 4.45 3374 4.17 8.65 93.80 9.22

(2008-2009) (5.58) (Nil) (4.75) (8.47) (133.07) (8.36)

Srinivasapura

2009-2010 1.52 Nil 1.42 9.41 - -

(2008-2009) (1.47) - (1.22) (8.16) - -

The financial result of the Company in the current year is encouraging because of higher realization of sugar, despite the low capacity utilization. The distillery division was not able to operate at full capacity consequent to shortage of molasses. The cogeneration plant operated at lower capacity on account of lower sugarcane crushing. However, Co-generation was operated on bought out fuel in the months of April and May 2009 for which Government of Kamataka paid higher prices of Rs.6.50 per KWH. During the year 2010 - 2011, though the Sugar prices have declined, the company is confident of achieving better results due to the higher cane availability.

Expansion : Your are aware, that a sugar factory at Srinivasapura owned by M/s. HSSK Ltd. has been taken over on Lease, Rehabilitate, Operate and Transfer basis for a period of 30 years. As per the terms of the agreement the crushing capacity of the sugar unit has to be expanded from 1250 TCD to 3500 TCD. It is also required to establish a Co-gen plant.

pThe expansion of sugar crushing capacity to 3500 TCD and establishment of 18 MW Co-generation plant have been taken up at an estimated cost of Rs. 150 crores. The cost of the project will be financed by issuing new equity capital and debt from banks/financial institutions.

New Equity capital: To part finance the cost of the project, the equity capital upto an extent of Rs. 50 Crores is being raised from public. The details are being worked out for the issue of new equity capital. Necessary resolutions authorizing the Board to issue new equity capital, are being placed before the members seeking their approval.

Authorised Capital : To accommodate issue of new capital, the Authorised capital requires to be enchanced by Rs. 10 crores from Rs. 50 crores to Rs. 60 crores. Present unutilized Authorised preference capital of Rs. 10 crores is proposed to be converted into 10 crores equity capital. Necessary resolutions seeking approval of the members are being placed at the ensuing Annual General Meeting.

Bonus Shares : Your Board has approved the issue of bonus shares in the ratio of 1:3 by capitalization of the reserves of the company. The bonus shares will be issued after obtaining members and other required approvals.

Deposits: All Fixed Deposits and Cumulative deposits matured and claimed as on 31.03.2010 have been paid. At the end of the financial year 17 deposits amounting to Rs. 10,60,632/- which were due for re-payment remained unclaimed.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Out Go:

The particulars required to be included in terms of Section 217(1 )(e) of the Companies Act,1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report. Particulars of Employees: Particulars of employees as required under section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 and forming part of this report have been provided in Annexure -1 to this report. Directors: Sri.M.Manickam, Sri.M.Balasubramaniam and Dr.A.Selvakumar are liable to retire by rotation in the ensuing Annual General Meeting and are eligible for reappointment. Auditors: M/s. P.N. Raghavendra Rao & Co., Chartered Accountants, who were appointed as auditors at the previous Annual General Meeting hold office till the conclusion of this Annual General Meeting and are eligible for re-appointment. Cost Audit: The Central Government has approved the appointment of Sri.G.I.Srinivasa Murthy, Cost Accountant as Cost Auditor for the year ended 31.03.2010. Directors responsibility statement:

Pursuant to requirements under Section 217 (2AA) of the Companies Act 1956 with respect to Directors responsibility statement, it is hereby confirmed:

i) that in the preparation of the annual accounts for the financial year ended 31.03.2010, the applicable accounting standards had been followed.

ii) that 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 of the company for the year under review.

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

(iv) that the directors had prepared the annual accounts on a going

concern basis Corporate Governance: As per the requirement of the Listing Agreement, a Report on Corporate Governance together with Auditors Certificate and its compliance is included as part of the Annual Report.

Managements Analytical Report: Managements Analytical Report as required under the Listing Agreement is given in the Section on Corporate Governance.

Acknowledgement: Board of Directors wish to express their thanks to all the cane growers, share holders, State and Central Governments, Financial Institutions, Consortium of Bankers, Local Authorities and also appreciation to the Employees at all levels for their services and excellent support rendered to the Company.

By order of the Board

Sri Chamundeswari Sugars Limited

Place : Coimbatore

Date : 28th May 2010

M. Srini vaasan V. K. Swaminathan

Managing Director Director