Prudential Sugar Corporation Ltd

To,

The Members,

Your Directors have pleasure in presenting the 33^rd Annual Report and the Audited Financial Statements for the Financial Year ended March 31, 2024.

Financial Results

The performance for the Financial Year ended March 31, 2024 is as under:

(Rs.in Thousands)

State of the Affairs of the Company

After the transfer of business and assets of the Company to Natems Sugars Private Limited in May, 2017 pursuant to the approval of the shareholders of the Company through postal ballot held during October/November 2014, the Board of Directors of the Company has proposed to embark upon a Bio-organic Jaggery manufacturing project with state-of- the-art technology in Telangana state. The project study is nearing completion by the experts in this field with regard to technology, process, viability, state incentives etc., and an appropriate decision will be taken based on the study report to be submitted by them.

Authorized Share Capital

During the year under review, there was no change in authorized share capital of the Company. Authorized share capital of the company as on March 31, 2024 was Rs. 75,00,00,000, comprising of 5,00,00,000 equity shares of Rs. 10 each and 50,00,000 No of 16% Cum Redeemable Preference shares of Rs. 50.

Paid-up Share Capital

During the Financial Year 2023-24, there was no change in paid up share capital of the Company. Fully Paid up share capital of the company as on March 31, 2024 was Rs. 36,33,20,000, comprising of the following:

1. 1,54,06,400 equity shares of Rs. 10 each

2. 1,03,45,600 Equity shares of Rs. 10 each

(Converted from 2586400 Equi preference Shares of Rs. 40 each)

3. 20,000 16% Cum. Redeemable Pref. Shares of Rs. 40 each (Rs. 10 converted into Equity)

4. 65,000,00 Equity shares of Rs. 10 each Buy Back of Securities

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

Sweat Equity

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

Bonus Shares

The Company has not issued any bonus shares during the year under review.

Employees Stock Option

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

Dividend

Your Directors have not recommended any dividend on Equity Shares for the year under review.

Transfers to Reserves

Your Board of Directors does not appropriate any amount to be transferred to General Reserves during the year under review.

Fixed Deposits

During the year under review, your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made there under.

Listing of Equity Shares

During the year, your Company has received the Final approval for revocation of suspension and for listing and trading of the Company Shares w.e.f. 22.12.2023 at BSE and NSE.

Subsidiaries, Associates and Joint venture

During the financial year 2017-18, your company had acquired the Equity Shares in Prudential Ammana Sugars Limited, which has become 100 percent subsidiary of the Company.

Statement containing salient features of the financial statement of the above mentioned subsidiary has been given in Form AOC-1 in the Annexure-VII to this report.

Your Company does not have any Joint Ventures or Associate Companies.

Number of Meetings of the Board of Directors

The Board of Directors duly met 4 times during the financial year from April 1, 2023 to March 31, 2024, the details of which are given in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and Secretarial Standard -1.

Independent Directors' Meeting

The Independent Directors met on February 14, 2024, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Director and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Indian Accounting Standards (IND-AS)

Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 1, 2017 pursuant to the Companies (Indian Accounting Standard) Rules, 2015 as notified by the Ministry of Corporate Affairs on February 16, 2015. Accordingly, your Company has prepared financial results on standalone basis as per Ind-AS, the formats for Unaudited/Audited quarterly financial results i.e. Statement of Profit and Loss and the Unaudited/Audited Half-Yearly Balance Sheet are to be submitted to the stock exchanges, shall be as per the formats for revised Balance Sheet and Statement of Profit and Loss as prescribed in Schedule III to the Companies Act, 2013.

Extract of Annual Return

As required by Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of the Annual Return in Form MGT-9 is available on the Company's website at http://www.prudentialsugar. com/shareholders information.

Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013

Pursuant to the requirement under Sec 134 (3)( C) of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms that:

a. in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

b. the Directors have 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 March 31, 2024 and Statement of Profit and Loss of the Company for that period;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the Annual Accounts for the Financial Year ended March 31, 2024 on a going concern basis;

e. the Directors have 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149

The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).

Management Discussion and Analysis

In terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis discusses the key issues concerning the business and carried on by the Company and the same is enclosed as Annexure - V to this Report.

Corporate Social Responsibility (CSR) Initiatives:

Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company ie. (a) net worth of the Company to be Rs.500 crore or more; or (b) turnover of the company to be Rs. 1,000 crore or more; or (c) net profit of the company to be Rs. 5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of section 135 are not applicable to the Company.

Audit Committee

The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of the following Directors namely Mr. Y. Ravinder Reddy, Chairman, Ms. Sadhana Bhansali and Mr. Kishore Jhunjhunwala.

Brief description of terms of reference:

• Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;

• carry on the evaluation of every director's performance;

• formulation of the criteria for determining qualifications, positive attributes and independence of a director;

• recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

• formulation of criteria for evaluation of Independent Directors and the Board;

• devising a policy on Board diversity; and

• any other matter as the Board may decide from time to time.

Nomination and Remuneration policy

In compliance to the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee has recommended to the Board a Nomination and Remuneration policy with respect to appointment / nomination and remuneration payable for the Directors, Key Managerial Personnel and senior level employees of the Company. The said policy has been adopted by the Board and the same was discussed in the Corporate Governance Report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

Particulars of Loans, Guarantees or Investments under Section 186

The Company has made Loans, Guarantees, and Investments during the Financial Year ended on March 31, 2024, in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Particulars of Contracts or Arrangements with Related Parties Referred to in Sub-Section (1) of Section 188

All transactions entered by the Company with Related Parties were in the Ordinary course of Business and are at Arm's Length pricing basis. The Audit Committee granted approvals for the transactions and the same were reviewed by the Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the financial year 2023-24 which were in conflict with the interest of the Company. The details of contracts and arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 are given as Annexure - I to the Board's Report in form # AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.

During the year under review there are no contracts / arrangements / transactions entered by the Company during the financial year with related parties and do not attract the provisions of Section 188 of the Companies Act, 2013.

The conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013 (Act) read with the Companies (Accounts) Rules, 2014

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - II to this Report.

Mechanism for Evaluation of Board

Pursuant to section Sec 134 (3)(q) read with Rule 8 (5) (viii) of Companies (Accounts) Rules evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

A. Criteria for evaluation of Board of Directors as a whole

i) The frequency of meetings;

ii) The length of meetings;

iii) The administration of meeting;

iv) The number of committees and their roles;

v) The flow of information to board members and between board members;

vi) The quality and quantity of information; and

vii) The Disclosure of Information to the stakeholders.

B. Criteria for evaluation of the Individual Directors

i) Ability to contribute and monitor corporate governance practices;

ii) Ability to contribute by introducing best practices to address top management issues;

iii) Participation in long term strategic planning;

iv) Commitment to the fulfillment of director obligations and fiduciary responsibilities;

v) Guiding strategy;

vi) Monitoring management performance and development;

vii) Statutory compliance & Corporate governance;

viii) Attendance and contribution at Board /Committee meetings;

ix) Time spent by each of the member; and

x) Core competencies.

Details of Directors or Key Managerial Personnel who were appointed or have resignedduring the Year

In terms of Section 152 of the Companies Act, 2013, Mr. Kurra Subba Rao, Executive Director would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr. Kurra Subba Rao has offered himself for re-appointment.

Based on the confirmations received from the Directors, none of the Directors are disqualified fromappointment under Section 164 of the Companies Act, 2013.

Deposits

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013. Statutory Auditors

M/s. PPKG & Co., Chartered Accountants, (Firm Registration #009655S) were appointed as Statutory Auditors of your Company to hold office from the conclusion of the 31^st AGM until the conclusion of the 36^th AGM to be held in the year 2027. The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting is done away with vide Notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi.

Qualification by Statutory Auditors

There are no Qualification/Reservation or Adverse remarks contained in Independent Auditors Report under Paras: Basis for Qualified opinion:

i) Since all the shares of the Company were converted into equity Share the Company did not redeem the 16% Redeemable Cumulative Preference Shares and did not provide for arrears of dividend thereon.

ii) In view of very limited strength of employees, presently working with the Company, the requirements of AS-15 Employee Benefits in respect of gratuity could not be complied with. However, provision for gratuity as required under Payment of Gratuity Act has been provided for.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s.RBM & Associates, Practicing Company Secretaries for conducting Secretarial Audit of the Companyfor the financial year 2023-24.

Cost Auditors

The appointment of Cost Auditors for the year ended March 31, 2024, was not mandated since the Company has not been engaged in manufacturing operations.

Internal Auditors

The Board of Directors of the Company has opined that it was not required to assign the function of Internal Audit to an independent firm of Chartered Accountants to carry out Internal Auditing of books of accounts in pursuance of Section 138 of the Companies Act, 2013 read with rules made there under, in view of the fact that there were no commercial/ operational transactions during the year.

Internal financial control and its adequacy

The Board of your Company has laid down internal financial controls which comply with the provisions of the Companies Act, 2013 and Listing Regulation with Stock Exchange and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

Corporate Governance

The Company is committed to good corporate governance in line with the SEBI (LODR) Regulations, 2015 and Provisions, Rules and Regulations of the Companies Act, 2013. The Company is in compliance with the provisions on corporate governance specified in the Listing Agreement with BSE. A certificate of compliance from M/s. R. Pugalia & Co., Chartered Accountants and the report on Corporate Governance form part of this Directors' Report.

Vigil Mechanism

The Board of Directors have adopted Whistle Blower Policy. The Whistle Blower Policy aims at conducting the affairs of the company in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases.

Secretarial Auditor Report

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has appointed M/s. RBM & Associates, Company Secretaries as Secretarial Auditors to conduct Secretarial audit of the company for the Financial Year Ended on March 31, 2024.

Secretarial Audit Report issued by RBM & Associates, Company Secretaries in form MR-3 is enclosed as Annexure - III to this Annual Report.

Statement of particulars of appointment and remuneration of managerial personnel

The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - IV to this Annual Report.

There are no employees whose particulars need to be furnished pursuant to Rule 5(2) The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements

1. The Company has set internal control systems to maintain accurate and complete accounting records, to safeguard its assets, to prevent and detect any frauds and errors.

2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the workflow of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and

3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Fixed Assets Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Change in the nature of business

Pursuant to the sale of the business and assets of the Company, the Board of Directors of the Company is exploring pportunities in diversified areas of business like, putting up a State-of-the-Art Bio- organic Jaggery manufacturing plant in the state of Telangana. Besides, the Company is also planning to venture in to import/export of raw-sugar and white sugar depending upon the opportunities and public policies of the Government from time to time.

The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

As disclosed in the Directors' Report in the Balance Sheet for the previous Financial Year ended March 31, 2023, a few legal cases which were filed by Mr. Ch. Krishna Murthy against the Company and by the Company against him, though not significant and would in any manner impact the going concern status of the Company and the Company's operations in future, are pending at various stages before the respective Courts/Tribunals.

The details of the cases filed:

Material changes and commitments affecting the financial position of the Company

There were no material changes and commitments affecting the financial position of the Company during the year.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year ended March 31, 2024, the Company has not received any Complaints pertaining to Sexual Harassment.

Policies

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.

I. Whistle blower Policy (Policy on vigil mechanism)

The Company has adopted the whistle blower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's code of conduct and ethics. There has been no change to the Whistle blower Policy adopted by the Company during fiscal 2022-23.

II. Policy for Determining Materiality for Disclosures

This policy applies to disclosures of material events affecting PSCL. This policy is in addition to the Company's corporate policy statement on investor relations, which deals with the dissemination of unpublished, price- sensitive information.

III. Policy on Document Retention

The policy deals with the retention and preservation of corporate records of the Company.

Human Resources

The company believes that the quality of its employees is the key to its success in the long run and is committed to provide necessary human resource development and training opportunity to equip them with skills, which would enable them to adapt contemporary technological advances.

Acknowledgement

The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and cooperation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere and dedicated services of the employees and workmen at all levels.