Dear members

Your Directors have pleasure in presenting the 38th Annual Report of the company together with audited financial statments for the year ended 31st March 2022.

(` in lakhs)

Transfer to General Reserve

The company has transferred a sum of ` 7500 lakhs out of current year profit to the General Reserve.

Dividend

Your Directors recommend a dividend @ ` 10/- per share for the financial year ended March, 2022 taxable in the hands of the shareholders. 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 49.01 lakhs tonnes with a recovery of 9.33% compared to 38.31 lakhs tonnes with a recovery of 9.34% in the previous year.

Power

The Co-generation plants generated 573.77 million units of power and exported 393.23 million units of power to grids compared to the generation of 470.57 million units and export of 318.48 million units in the previous year.

Distillery

During the year, the distilleries produced 12.44 million B.Ltrs compared to the production of 11.91 million B.Ltrs in the previous year.

Granite

In the Granite Unit 184518 square meters of Polished Granite products were produced compared to production of 130507 square meters in the previous year.

Wind Mill

Wind Mills generated 11.36 million units of power and exported 10.64 million units to grid compared to the generation of 11.77 million units and export of 10.65 million units in the previous year.

Prospects for the Current year 2022 - 2023

In the current financial year, it is estimated to crush 50 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 62 million B.Litres of alcohol in the Distillery Units. The performance of Granite Division largely depends on the mining policy of the Central/ State Governments.

The increase in installed capacity from 60 Kilo Litre Per Day (KLPD) to 150 Kilo Litre Per Day (KLPD) at the distillery in the Suger Unit at Alaganchi Village, Nanjangud Taluk, Mysore District in Karnataka has been completed. The progress in modernization of distillery unit in Tamil Nadu is in final stage.

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 and being eligible offers himself for re-appointment.

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's operations, business models and related matters are placed on the website of the company at the link http://www.bannari.com/ InvestorInformation.html.

All the Independent Directors have given declarations that they meet the criteria of independence as provided in

Section 149 (6) of the Companies Act, 2013 and applicable regulations under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director, Sri C Palaniswamy, Company Secretary, Sri M Ramprabhu, Chief Financial Officer are the Key Managerial Personal of the Company as per Section 203 of the Companies Act, 2013.

There is no change in the Key Managerial Personnel during the year.

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 as required under Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in Annexure II forming part of this Report.

In terms of proviso to Section 136 (1) of the Companies Act, 2013 the Report and Accounts are being sent to the members excluding the information on employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the said information is available for inspection by the members at the Registered Office of the Company during business hours on all days except Sundays and public holidays upto the date of Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in this regard.

The Company has complied with applicable provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. During the year no complaint / case was filed pursuant to the said Act.

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, a certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance and a certificate on non-disqualification of Directors 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. The Annual Report on CSR activities for the financial year ended 31st March, 2022 is attached as Annexure IV to this report.

Risk Management / Risk Management policy

The company has constituted Risk Management Committee as required under Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and has formulated a detailed Risk Management Policy. In the opinion of the Board no element of risk that may threaten the existence of the company has been identified. More details are furnished in the Report on Corporate Governance attached herewith.

The Risk Management Policy is posted in the company's website at the link https://www.bannari.com/ InvestorInformation.html

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. The Whistle Blower Policy is posted in the company's website at the link https://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 https://www.bannari.com/ InvestorInformation.html

Related Party Transactions

All 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. None of the transactions is materially significant 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 omnibus approval of the Audit Committee was obtained on annual basis for the transactions which are at a foreseen and repetitive nature. The Related Party Transactions Policy as approved by the Board is uploaded on the company's website at https://www.bannari.com/ Investor Information.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 held on 7.2.2022 without participation of non-independent directors and management considered and evaluated the performance of the Chairman, Managing Director and the Board. The Board has carried out an annual evaluation of its own performance, the performance of the committees, board, independent Directors and individual Directors. The criteria applied in the evaluation process are detailed in the Corporate Governance Report which forms part of this report.

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 2021-22 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

Pursuant to Regulation 34 SEBI (LODR) Regulations 2015 as amended the Business Responsibility Report has been prepared as prescribed and annexed to this Report as Annexure V and the same shall form part of this report.

Annual Return

Copy of the previous year Annual Return in the prescribed form is available at the weblink https://www.bannari.com/InvestorInformation.html. A copy of Annual Return for the financial year 2021-2022 will be placed on the website of the company after the conclusion of 38th AGM.

Auditors / Auditors' Report

M/s P K Nagarajan & Co., Chartered Accountants Coimbatore were appointed as the Statutory Auditors of the company at the 33rd Annual General Meeting of the Company for a period of five consecutive years and they shall hold office till the conclusion of 38th Annual General Meeting. The term of office of M/s P K Nagarajan & Co., as Statutory Auditors expires at the conclusion of 38th Annual General Meeting of the Company scheduled to be held on 9th September, 2022. M/s. P K Nagarajan & Co., have expressed their intention not to seek re-appointment as Statutory Auditors of the Company on conclusion of their present term. The Audit Committee and Board of Directors at their respective meetings held on 30.5.2022 took note of the above and accepted their request. The Board of Directors place on record the services rendered by M/s. P K Nagarajan & Co., Charted Accountants. The Audit Committee of the Company after due deliberation and discussion and considering various factors such as industry experience, technical skills, audit team, quality of reports etc., recommended the appointment of M/s P N Raghavendra Rao & Co., Chartered Accountants (Firm Registration No. 003328S), Coimbatore as Statutory Auditors for a term of five consecutive years to hold office from the conclusion of 38th Annual General Meeting till the conclusion of 43rd Annual General Meeting. M/s. P N Raghavendra Rao & Co, Chartered Accountants have consented for the said appointment and has submitted necessary certificates in compliance of Section 139 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014. The Auditors have confirmed their independence and eligibility under Section 141 of the Companies Act, 2013.

The Report given by the present Statutory Auditors M/s P K Nagarajan & Co., on the financial statements of the company for the financial year 2021-22 do not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors did not report any matter under Section 143(12) of the Companies Act, 2013 and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

Secretarial Auditors and Secretarial Audit Report

The Board has appointed M/s C Thirumurthy & Associates, Company Secretaries, Coimbatore as Secretarial Auditors to conduct Secretarial audit for the financial year 2021-2022. The Report of Secretarial Auditors is annexed to this report as Annexure VI. The Report do not contain any qualification, reservation or adverse remark.

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

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

The Company has maintained cost records as specified by the Central Government under Section 148 of the Companies Act, 2013.

Sri M Nagarajan, Cost Accountant, Coimbatore was appointed as Cost Auditor to conduct audit of cost accounting records for the financial year 2021-22.

Industrial Relations

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

General

i) Your Directors state that no disclosure or reporting is required in respect o 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

ii) 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.

iii) No resolution plan/process was initiated or pending under insolvency and bankruptcy Code 2016, against the Company.

iv) The disclosure relating to valuation at the time of one time settlement with banks or financial institutions is not applicable as the company has not made any such one-time settlement.

v) The Company has no Subsidiary / Joint venture / Associate company.

Acknowledgement

Your Directors wish to place on record their appreciation for the continued support and co-operation by the Government Authorities, banks and other stakeholders 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.

ANNEXURE - I

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNINGS AND OUTGO REQUIRED UNDER THE COMPANIES (ACCOUNTS) RULES, 2014

A) Conservation of energy :

I) Steps taken or impact on conservation of energy

v As a part of continuous process / effort the company is replacing light fittings in many places with LED fitting to improve the illumination and energy saving.

v New Variable Frequency Drive (VFD) panels were installed in the sugar and co-generation plant in sugar unit at Kolundampattu Village (Unit-IV)

v A-vaccum crystallizer was set to auto mode and thereby reduced water consumption.

ii) Steps taken to utilize alternate sources of energy;

v The company’s co-generation plants are generating green power which is utilized for consumption in all sugar units and to that extent reduced the electricity drawal from the state grids.

As a responsible organization, your company is has constantly utilizing bio-gas generated in the Anaerobic digester for cooking purpose in canteens and dormitory.

iii) The capital investment on energy conservation equipments : Nil

B) Technology absorption:

i) The efforts made towards technology absorption : Nil

ii) The benefits derived like product improvement, cost reduction, product development or import substitution : Nil

iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

The company has not imported any technology during the last three years

iv) The expenditure incurred on Research and Development : ` 107.61 lakhs.

C) Foreign exchange earnings and outgo :

v The Foreign Exchange earned in terms of actual inflows during the year : ` 2127.94 lakhs

v The Foreign Exchange outgo during the year in terms of actual outflows : ` 815.32 lakhs

THE INFORMATION REQUIRED PURSUANT TO SECTION 197 OF THE COMPANIES ACT, 2013, READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

A) Information as per Section 197(12) read with Rule 5(1) of The Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014:

1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year :

The median remuneration of employees of the company during the financial year 2021-22 was ` 3.93 Lakhs. The Non-Executive Directors were paid only sitting fee for attending the meetings of the Board and Committees thereof.

2. The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager if any in the financial year.

3. Percentage increase in the median remuneration of employees in the financial year : 9 %.

4. Number of permanent employees on the rolls of company : 1898 .

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration : The average percentile increase in salaries of employees other than managerial personnel was 7%. Since the managerial persons are being paid commission linked to company's profitability in terms of the resolutions passed by the shareholders of the company under the provisions of the Companies Act, 2013, it cannot be compared with the percentile increase in salaries of other employees.

6. Affirmation that the remuneration is as per the remuneration policy of the company. The company affirms that remuneration is as per the Remuneration Policy of the company.