SHRI PRABHULINGESHWAR SUGARS AND …...Shri Prabhulingeshwar Sugars and Chemicals Limited will be held at Modern Hall, Near Toll Naka, Dharwad on Thursday, 29th September 2016 at 3-00

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PRABHU SUGAR PRABHU POWER

SHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITED, DHARWAD

Shri Jagadeesh S. Gudagunti - Chairman and Managing DirectorShri Rajendrakumar S. Gudagunti - Executive DirectorShri Deval A. Desai - DirectorShri Nagappa G. Sanadi - DirectorShri Mallappa C. Koti - DirectorShri Umesh S. Hiremath - DirectorShri Sudheer S. Gudagunti - DirectorShri Sateesh S. Gudagunti - DirectorShri Dharmalingayya J. Gudagunti - DirectorSmt. Ishwari A. Gudagunti - Director

Dr. N.A. Charantimath Shri S. P. Hiremath Shri Satyappa Akkiwat Shri M.C. Hippargi Dr. Ramesh R. Kalatippi

Shri Jagadeesh S. Gudagunti - Chairman and Managing Director Shri Rajendrakumar S. Gudagunti - Executive Director Shri Mahendra B. Horaginamani - Company Secretary cum General Manager (F&A)

Belgaum DCC Bank Ltd., Belagavi State Bank of India, Vijayapur Bank of India, Vijayapur Canara Bank, Vijayapur

Bagalkot DCC Bank Ltd., Bagalkot State Bank of India, (A.D.B.) Jamkhandi IDBI Bank Ltd., Vijayapur

Statutory Auditors : M/s. Nataraj & Co., Chartered Accountants, Hubli Secretarial Auditors : M/s. Gopalakrishnaraj H.H & Associates, Company Secretaries, Bengaluru Internal Auditors : M/s. Shivakumar & Co, Chartered Accountants, Hubli Cost Auditors : Mr. Hari T. Devadiga, Cost Accountant, Bengaluru

Shri B.S. Khandekar - Sr. General Manager (Cane)Shri S.C. Hipparagi - General Manager (E & I)Shri Mukund Kulkarni - Chief Chemist (W.T.P.)Shri D.N. Halle - Dy. General Manager (Cane)Shri R.P. Hiremath - Sr. Manager (F & A)Shri G.S. Saraganachari - Officer on Special DutyShri B.M. Balappagol - Civil EngineerShri V.S. Saraganachari - Stores Officer

Shri A. Gurunath - Sr. General Manager (Engg.) Shri Sunil Holeppagol - Chief Chemist Shri B.S. Khyadi - Dy. General Manager (Engg.) Shri M.B. Nippani - Dy. General Manager (Cane) Shri A.M. Jayaprakash - Sr. Manager (R.O.) Shri C.V. Baligar - Manager (Admin) Shri M. S. Guledgudda - Public Relation Officer Shri P. Chikkayya - Security Officer

BOARD OF DIRECTORS

HONORARY DIRECTORS

KEY MANAGERIAL PERSONNEL & WTD

PRINCIPAL BANKERS

AUDITORS

MANAGEMENT TEAM

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REGISTERED OFFICE : 1st Floor, “Sukrut” Building, Opp. K.C. Park Main Gate, P.B. Road, Dharwad - 580 008. Karnataka State. Telefax : (0836) 2745036 E-mail : [email protected], Website : www.prabhusugar.com CIN - U85110KA1995PLC017861, ISO : 14001 : 2004 Certified

FACTORY : Siddapur, Tq. : Jamkhandi, Dist. : Bagalkot. Karnataka State : (08353) 238004, 238200, Fax : (08353) 238164, 238166.

NOTICE

To the Members,

Notice is hereby given that the Twenty First Annual General Meeting of the members ofShri Prabhulingeshwar Sugars and Chemicals Limited will be held at Modern Hall, Near TollNaka, Dharwad on Thursday, 29th September 2016 at 3-00 p.m. to transact the followingbusiness :

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited financial statements for the financial year ended31.03.2016 together with the Board’s Report and Auditors Report’s thereon.

2. To Appoint Director in place of Shri Deval A. Desai (DIN-00801867) who retires by rotation andbeing eligible, offer himself for re-appointment.

3. To Appoint Director in place of Shri Sudheer S. Gudagunti (DIN-00464901) who retires byrotation and being eligible, offer himself for re-appointment.

4. To Ratify the appointment of Statutory Auditors.

SPECIAL BUSINESS

5. To appoint Shri Jagadeesh Shivayya Gudagunti, as a Managing Director and to fix hisremuneration.

To consider and if thought fit to pass, with or without modifications(s), the followingresolution as Special Resolution :

“RESOLVED THAT pursuant to the provisions of Section 196, 197, 198, 203 Part II of ScheduleV and other applicable provisions, if any, of the Companies Act, 2013 or any amendments(s)or modification(s) thereof and on the recommendation and approval of Nomination andRemuneration Committee, the consent of the members be and is hereby accorded for theappointment of Shri Jagadeesh S. Gudagunti, as a Managing Director of the Company witheffect from 26.09.2016 for a period of five calendar years that is till 25.09.2021, at amonthly remuneration of Rs.75,000/- (Rupees Seventy five thousand only) plus perquisitesand other allowances which the company is entitled to pay.”


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“FURTHER RESOLVED THAT pursuant to Section I of Part II of Schedule V of the CompaniesAct 2013 the aforesaid remuneration shall be for a period of three years i.e upto 25.09.2019.”

“FURTHER RESOLVED THAT in the event of adequacy of profits during the tenure of ShriJagadeesh S. Gudagunti, as a Managing Director, Shri Jagadeesh S. Gudagunti is paid theremuneration as per Section I of Part II of Schedule V of the Companies Act, 2013.”

“FURTHER RESOLVED THAT the Board of Directors be and is hereby authorized to do andperform all such acts, deeds and things as may be necessary desirable and appropriate to giveeffect to this resolution and make appropriate filings with the Registrar of Companies, Bengaluru,Karnataka.”

6. To appoint Shri Umesh Shivalingayya Hiremath, B.A.LL.M as an “Independent Director”of the company for the period of one year with effect from 27.09.2016 till the conclusionof 22nd AGM.

To consider and if thought fit to pass, with or without modification(s), the followingresolution as an Ordinary Resolution :

“RESOLVED THAT pursuant to the provisions of Sections 149, 152, 160 and any other applicableprovisions of the Companies Act, 2013 and Rules made thereunder, read with Schedule IV tothe Companies Act, 2013, Shri U.S.Hiremath, B.A.LL.M (DIN-00465023) be and is herebyappointed as an Independent Director to hold office for a period of one year i.e. from27.09.2016 till the conclusion 22nd AGM.

7. To appoint Shri Mahalingappa Chandrappa Hipparagi, B.A.,M.Com as an “IndependentDirector” of the company for the period of two consecutive years with effect from29.09.2016 till the conclusion of 23rd AGM.

To consider and if thought fit to pass, with or without modification(s), the followingresolution as an Ordinary Resolution :

“RESOLVED THAT pursuant to the provisions of Sections 149, 152, 160 and any other applicableprovisions of the Companies Act, 2013 and Rules made thereunder, read with Schedule IV tothe Companies Act, 2013, Shri M.C.Hipparagi, B.A.,M.Com (DIN-07578902) be and is herebyappointed as an Independent Director to hold office for a period of two years i.e. from29.09.2016 till the conclusion of 23rd AGM.

8. To consider confirm and ratification of remuneration to Cost Auditors for the F.Y.2016-17

To consider and if thought fit to pass, with or without modification(s), the followingresolution as an ordinary resolution :

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Place : SiddapurDate : 06-08-2016

By Order of the Board of DirectorsFor Shri Prabhulingeshwar Sugars

and Chemicals Limited

Sd/-Jagadeesh S. Gudagunti

Chairman & Managing Director(DIN-00464873)CIN : U85110KA1995PLC017861

Registered Office :1st Floor, “Sukrut”, Building,Opp. K.C. Park Main Gate, P.B. Road,Dharwad - 580 008. Karnataka StateTel .: 08353 - 238004, 238200 and 0836-2745036Fax : 08353-238164, 238166E-mail : [email protected] : www.prabhusugar.com

“RESOLVED THAT, pursuant to the provisions of Section 148 of the Companies Act, 2013 andRule 14 of the Companies (Audit and Auditors) Rules 2014 and all other applicable provisions(including any statutory modification(s) or re-enactment thereof, for the time being inforce), the remuneration of Rs.1,00,000/- payable to Shri Sanjay K. Tikare, Cost Auditorsappointed by the Board of Directors be and is hereby ratified for to conduct the audit of thecost records of the company for the financial year ending 31st March 2017.”

“FURTHER RESOLVED THAT Shri Jagadeesh S. Gudagunti, Chairman and Managing Directoror Shri Rajendrakumar S. Gudagunti, Executive Director of the Company be and are herebyauthorized to take all necessary action to give effect to this resolution.”

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NOTES

1. A member entitled to attend and vote at the above meeting is entitled to appoint a proxy toattend and vote instead of himself and such proxy need not be a member of the company.Proxies, in order to be effective, the member should sign and send the proxy authorizationletter to registered office of the company not less than forty eight (48) hours before thecommencement of the meeting.

2. Members desirous of obtaining any information concerning the accounts and operations ofthe company are requested to send their queries to the company at least seven (7) daysbefore the date of the meeting, to enable the management to keep the full informationready.

3. Members are requested to:

a) Inform the change of address if any, immediately to the company.b) Quote their folio number in all correspondences with the company.c) Bring the copy of Annual Report for attending the meeting.

4. The Register of members and Share Transfer Books of the company will remain closed22.09.2016. For e-voting at AGM, cut-off date is 22.09.2016.

5. Ministry of Corporate Affairs (MCA), New Delhi has introduced E-Notice, hence memberswho desire to receive E-Notice are requested to intimate their E-mail ID’s by mentioning inthe register maintained at registered office or by sending request mail to the company’smail ID [email protected].

6. Corporate members are requested to send a duly certified copy of the Board resolution,authorizing their representative to attend and vote at the AGM.

7. Members holding shares in single name and physical form are advised to make nomination inrespect of their shareholding in the Company. The nomination forms SH-13 & SH-14 areattached along with this annual report.

8. Notice of the 21st Annual General Meeting along with the Annual Report 2016 of the Companyis being sent to all the members in the electronic mode, whose E-mail address are registeredwith the Company, unless any member has requested for a hard copy of the same and formembers who have not registered their email address, physical copy of above documents isbeing sent.

9. All documents referred to in the accompanying Notice and the Explanatory Statement shallbe open for inspection at the Registered Office of the Company during normal business hourson all working days except holidays.

10. a. E-voting Instructions:i. The e-voting period commences on 26.09.2016, (09.00 A.M. IST) and ends on 28.09.2016

(5.00 p.m. IST). During this period, Members of the company who are holding shares

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either in physical form or in dematerialized form as on 22.09.2016, may cast their voteelectronically. The e-voting module shall be disabled by KARVY for voting thereafter.Once the vote on a resolution is cast by the Member, he/she shall not be allowed to alterit subsequently.

ii. The voting rights of Members shall be in proportion to the shares held by them on thepaid up equity share capital of the Company as on 22.09.2016 and as per the Register ofMembers of the Company.

iii. Shri Gopalakrishnaraj H.H., has been appointed as the Scrutinizer to scrutinize thee-voting process (including the Ballot Form received from the Members who do not haveaccess to the e-voting process) in a fair and transparent manner.

iv. The Scrutinizer shall, within a period not exceeding three working days from the conclusionof the e-voting period, unblock the votes in the presence of at least two witnesses (notin the employment of the Company) and make out a Scrutinizer’s Report of the votescast in favour or against, if any, forthwith to the Chairman of the Company.

v. A Member can opt for only one mode of voting i.e. either through e-voting or in physicalform. If a Member casts his / her vote by both modes, then voting done through e-votingshall prevail and the vote by ballot shall be treated as invalid. The results declared alongwith the Scrutinizer’s Report shall be placed on the Company’s websitewww.prabhusugar.com and on the website of KARVYhttps://evoting.karvy.com withintwo days of the passing of the resolutions at the 21st AGM of the Company.

10. b. E-VOTING PROCEDURE :

I. The Procedure and instructions for e-voting are as follows.

User - ID For Members holding shares in Demat Form :

a) For NSDL : 8 Character DP ID followed by 8 Digits Client ID.

b) For CDSL : 16 digits beneficiary ID.

For Members holding shares in Physical Form :

a) Event no. followed by Folio Number registered with the Company.

PasswordYour Unique password is printed on the Postal Ballot Form / via e-mailforwarded through the electronic notice.

Captcha Enter the Verification code i.e., please enter the alphabets and numbers in theexact way as they are displayed for security reasons.

c) Please contact our toll free No.1-800-34-54-001 for any further clarifications.

d) Members can cast their vote online from 26.09.2016 @ 9.00 AM to 28.09.2016 @ 5.00 PM

e) After entering these details appropriately, click on “LOGIN”.

f) Members holding shares in demat / physical form will now reach password change menuwherein they are required to mandatorily change their login password in the new passwordfield. The new password has to be minimum eight characters consisting of at least one uppercase (A-Z). one low case (a-z), one numeric value (0-9) and a special character

a) Open your web browser during the voting period and navigate to https: e-voting.karvy.com.

b) Enter the login credentials (i.e., user id & password) mentioned on the Ballot form. Yourfolio/DP client ID will be your user ID.

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Place : Siddapur

Date : 06-08-2016

By Order of the Board of Directors

For Shri Prabhulingeshwar Sugars


Sd/-

Jagadeesh S. Gudagunti

Chairman & Managing Director

(DIN-00464873)

(&,*,$ etc). Kindly note that this password can be used by the demat holders for voting forresolution of any other company on which they are eligible to vote, provided that company optsfor e-voting through Karvy computer share private limited e-voting platform. System will promptyou to change your password and update any contact details like mobile #, email id etc on 1st

login. You may also enter the secret question and answer of your choice to retrieve your passwordin case you forget it. It is strongly recommended not to share your password with any otherperson and take utmost care to keep your password confidential.

g) You need to login with the new credentials.

h) On successful login system will prompt to select the “EVENT” i.e. Shri Prabhulingeshwar Sugarsand Chemicals Limited.

i) If you are holding shares in demat form and had logged on to https://evoting.karvy.com andcasted your vote earlier for any company, then your exiting login id and password are to beused.

j) On the voting page, you will see resolution description and against the same the option FOR /AGAINST/ ABSTAIN or alternatively you may partially enter any number in FOR and partially inAGAINST but the total number in FOR /AGAINST taken together should not exceed your totalshareholding. If the shareholder do not wants to cast, select ABSTAIN.

k) After selecting the resolution you have decided to vote on, click on SUBMIT. A confirmation boxwill be displayed. If you wish to confirm your vote, click on OK. Else to change your vote, clickon CANCEL and accordingly modify your vote.

l) Once you CONFIRM your vote on the resolution you will not beallowed to modify your vote.

m) Corporate / institutional members (Corporate/FIs/FIIs/Trust/Mutual funds/ Banks etc.)are requiredto send scan (PDF format) of the relevant board resolution to the scrutinizer through e-mail [email protected] with copy to [email protected]. The file scanned image of theboard resolution should be in the naming format “Corporate Name_event no.”

II. For Members whose e-mail addresses are not registered with the Company/Depositories:

Members will receive a Ballot Form along with the Annual Report. They have two options:

i. To opt for e-voting by using the initial password that is provided in the enclosed Ballot Form.Follow all steps as given in Sr. No. (b) to Sr. No.(m) above, to cast your vote.

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ii. To opt for casting your vote in physical form, fill in the Ballot Form and post it in the boxprovided at AGM.

CIN : U85110KA1995PLC017861Registered Office :1st Floor, “Sukrut”, Building,Opp. K.C. Park Main Gate, P.B. Road,Dharwad - 580 008. Karnataka StateTel .: 08353 - 238004, 238200 and 0836-2745036Fax : 08353-238164, 238166E-mail : [email protected] : www.prabhusugar.com

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ANNEXURE TO THE NOTICE

EXPLANATORY STATEMENT(Pursuant to Section 102 of the Companies Act, 2013)

Item No.5

To Appoint Shri Jagadeesh Shivayya Gudagunti, (DIN 00464873)as a Managing Director andto fix his remuneration.

• Date of Birth : 06.07.1954• Qualification : DME, B.O.E.(AMIE)

Shri Jagadeesh S. Gudagunti, was appointed as an “Managing Director” by the Board of Directorsw.e.f. 26.09.2013 for a period of 3 years (Upto 25.09.2016) in accordance with provisions ofSection 196,197,198,203read with part IIof Schedule V and other applicable provisions, if any, ofthe Companies Act, 2013 or any amendment(s) or modification(s) thereof and on therecommendation and approval of the Remuneration and Articles III (56) of Article of Associationof the Company. Shri Jagadeesh S. Gudagunti, attended four Board meeting.

The Board of Directors on the recommendation and approval of the remuneration committee andsubject to consent and approval of the members in the General Meeting, appointed Shri JagadeeshS. Gudagunti, as a Managing Director of the company for the period of three calendar years at amonthly remuneration of Rs.75,000/- (Rupees Seventy five thousand only) plus perquisites andother allowances which the company is entitled to pay. Accordingly a resolution for ratificationand consent is placed as a special resolution in this regard.

Shri Jagadeesh S. Gudagunti, Shri Rajendrakumar S. Gudagunti, Shri Sudheer S. Gudagunti, ShriSateesh S. Gudagunti and Shri Dharmalingayya J. Gudagunti are concerned or deemed to beinterested in the resolution.

• Directorship in other Companies :

1. Siddapur Distilleries Limited., Siddapur. (Karnataka)

• Membership in other Board Committee : NIL

• Shareholding as on 31.03.2016 : 1,22,56,334 Shares ( 26.29%)

“INFORMATION AS PER SCHEDULE - V OF THE COMPANIES ACT, 2013”

I. General Information :

1. Nature of Industry :

The company is engaged in the business of manufacturing the sugar and generation of power.

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2. Date of Expected / Date of Commencement of Commercial production :

The commercial production was started during the year 1999-2000.

3. In case of new companies, expected date of commencement of activities as per projectapproved by financial institutions appearing in the prospectus :

—Existing Company - Not Applicable—-

4. Financial performance based on given indicators :

a. Turnover Rs.40,626.30 Lakhsb. Cost of Sales Rs.36,245.67 Lakhsc. Operating Profit Rs. 4,380.63 Lakhsd. Earning Per Share Rs. 0.49 Sharee. Share Capital Rs. 4,661.86 Lakhsf. Net-worth Rs. 3,573.62 Lakhsg. Profit for the year (After Tax) Rs. 230.32 Lakhs

5. Foreign investment or collaborations if any :

There is no Foreign collaboration

II. Information about the Appointee

1. Background Details, Job Profile and his suitability:

Expertise in Specific functional areas :

The Chairman, Shri Jagadeesh S. Gudagunti is a Technocrat, Industrialist and Consultant forSugar Machinery manufacturing. He has an experience of more than 35 years as an Industrialistand Consultant for Sugar Industries, Distilleries and Material Handling Equipment’s. He is alicensed Sugar Machinery manufacturer registered with NFCSF (New Delhi), NCDC (New Delhi),Commissionerate of Sugar (Maharashtra State & Andhra Pradesh), TASCO (Tamil Nadu), Gujaratand Karnataka Governments. He has carried out many projects in India and abroad. As aProject Consultant he has visited KENYA, NIZERIA, GERMANY, VIETNAM, CHINA, PHILIPPINES,MALAYSIA and other countries, for rehabilitation and modernization of sugar, paper anddistillery plants.

During the year 2016-17 Shri Jagadeesh S. Gudagunti received the award “Life TimeAchievement Award” by the Sugar Technologists Association of India (STAI). He has receivedcertificate of merits for excellence in productivity, quality, innovation and management, awardedby Institute of Economic Studies named “UDYOG RATNA” Award during 2002-03, “VANIJYARATHNA AWARD” from Karnataka Chamber of Commerce, Hubli (Karnataka) for his serviceto the sugar industry. He has also been awarded “INTERNATIONAL GOLD STAR MILLENIUMAWARD” for excellence in promoting Global Integration by Citizens Integration Peace Society,Nepal-India Forum For Peace & Development at an International Conference held on 7th February2007* at Kathmandu (Nepal).

2. Past Remuneration:Rs.75,000/-(Rupees Seventy Five thousand) plus perquisites and other allowances.

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3. Recognition / Awards:In his regular guidance CMD Shri Jagadeesh S. Gudagunti and Company has received theawards as mentioned below:

• “Life Time Achievement Award” by Sugar Technologists Association of India (STAI), NewDelhi.(Season 2015-16)

• “Best Performing Sugar Factory” in South India – given by SISSTA, Chennai at Hyderabad.• “Best Sugarcane Development Award 1st Prize” for the season 2009-10 in Karnataka –

given by SISSTA at Chennai.• “Best Co-generation Platinum Award” (Season 2013-14) given by SISSTA at Visakhapatnam

(A.P.)

4. Remuneration proposed :Rs.75,000/-PM (Rupees Seventy five thousand only) plus perquisites and other allowances whichthe Company is entitled to pay for next three years till 25.09.2019.

5. Comparative Remuneration profile in respect of industry, size of the Company profile ofthe position and person (in case of expatriates the relevant details would be with respectto the country of his origin.)

—Not Applicable—-

6. Pecuniary relationship directly / indirectly with the Company or relationship with managerialpersonnel, if anyThe following is the relationship (Share Holding Pattern) Directly / Indirectly holding equityshares, such as..

• Shri Jagadeesh S. Gudagunti. - 1,22,56,334 Equity Shares• Shri Rajendrakumar S. Gudagunti. - 10,36,334 Equity Shares• Shri Sudheer S. Gudagunti. - 8,79,134 Equity Shares• Shri Sateesh S. Gudagunti. - 9,56,035 Equity Shares• Shri Dharmalingayya J. Gudagunti - 11,24,000 Equity Shares• Through M/s. Siddapur Distilleries Ltd. - 91,91,800 Equity Shares

III. Other Information :

1. Reasons for inadequacy of profits :• Increased cost of sugar cane price.• Under utilization of capacity.• Lower sugar crop days.• Lower recovery Percentage.

2. Steps taken or proposed to be taken for improvement :• Cane development activities to ensure regular supply of sugar cane with high recovery

percentage.• Efficient plant utilization.• Reduction of cost of production.• Entering future markets to use market driven benefits.• Export Arrangements for Sugar/raw sugar.• Reducing interest burden by managing working capital.

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3. Expected increase in productivity and profits in measurable terms :

• Crushing - 11.50 Lakhs MT• Expected Recovery in % - 11.50 %• Expected Crop Days - 120 Days• Turnover - Rs.42,500.00 Lakhs• Cost of Sales - Rs.37,300.00 Lakhs• Operating Profit/Loss - Rs.5,200.00 Lakhs• Earnings Per Share - Rs.1.14 Per Share• Share Capital - Rs.4,661.86 Lakhs• Net worth - Rs.4,039.80 Lakhs

Item No. 6

To Appoint Shri Umesh Shivalingayya Hiremath, (DIN 00465023) B.A.LL.M. as an “IndependentDirector” of the Company for the period of one year with effect from 27.09.2016 till theconclusion of 22nd AGM.

• Date of Birth : 03.10.1943• Qualification : B.A.LL.M

Pursuant to provisions of Section 160 of the Companies Act, 2013 the company has receivednotice in writing from a member along with deposit of Rs.1,00,000/- (One Lakhs Rupees only)proposing the candidature of Shri Umesh Shivalingayya Hiremath for the office of independentdirector to be appointed as such, under the provisions of Section 149 of the Companies Act, 2013.

The company has received from Shri Umesh Shivalingayya Hiremath (i) consent in writing to actas director in Form DIR 2 pursuant to Rule 8 of Companies (Appointment & Qualification ofDirectors) Rule, 2014. (ii) intimation in Form DIR 8 in terms of Companies (Appointment &Qualification of Directors) Rules, 2014 to the effect that he is not disqualified under sub-section(2) of Section 164 of the Companies Act 2013 and (iii) a declaration to the effect that he meetsthe criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act2013.

The resolution seeks the approval of members for the appointment of Shri Umesh ShivalingayyaHiremath as an Independent Director of the Company up-to the conclusion of 22nd AGM pursuantto Section 149 and other applicable provisions of the Companies Act 2013 and the Rules madethereunder and he is not liable to retire by rotation.

In the opinion of the Board of Directors, Shri Umesh Shivalingayya Hiremath, the independentdirector proposed to be appointed, fulfills the conditions specified in the Companies Act, 2013and Rules made there under and he is independent from the management. A copy of the letterfor the appointment of Shri Umesh Shivalingayya Hiremath as an independent director setting outthe terms and conditions is available for inspection without any fee by the members at theCompany’s registered office during normal business hours on working days up to the date of theAGM.

No director, key managerial personal of their relatives, except Shri Umesh Shivalingayya Hiremath,to whom the resolution relates, is interested or concerned in the resolution.

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• Expertise in Specific functional areas :

Shri Umesh Shivalingayya Hiremath is post graduate in Law from Karnataka University Dharwadspecialised in merchantile law, was a professor and retired Principal of Hurkadli Ajja Law College,Dharwad and KLE’s, G.K.Law College, Hubballi and Bengaluru. He has rich experience in corporatelegal matters and administration as Chief Executive of plywood and sugar industry. He also servedas CEO of Shri Prabhulingeshwar Sugars and Chemicals Limited during the period 2001 to 2009.

He is already holding the position of Independent director upto 26.09.2016 and eligible for reappointment as Independent Director.

• Directorship in other Companies : -NIL-• Membership in other Board Committee :

1. Audit Committee2. Nomination and Remuneration Committee, and3. Share Transfer Committee

• Shareholding as on 31.03.2016: -NIL-

Item No. 7

To Appoint Shri Mahalingappa Chandrappa Hipparagi, (DIN-07578902) B.A.,M.Com as an“Independent Director” of the company for the period of two consecutive years with effectfrom 29.09.2016 till the conclusion of 23rd AGM.

• Date of Birth : 30.04.1940• Qualification : B.A.,M.Com

Pursuant to provisions of Section 160 of the Companies Act, 2013 the company has receivednotice in writing from a member along with deposit of Rs.1,00,000/- (One Lakhs Rupees only)proposing the candidature of Shri M.C.Hipparagi for the office of independent director to beappointed as such, under the provisions of Section 149 of the Companies Act, 2013.

The company has received from Shri M.C.Hipparagi (i) consent in writing to act as director inForm DIR 2 pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rule,2014. (ii) intimation in Form DIR 8 in terms of Companies (Appointment & Qualification ofDirectors) Rules, 2014 to the effect that he is not disqualified under sub-section (2) of Section164 of the Companies Act 2013 and (iii) a declaration to the effect that he meets the criteria ofindependence as provided in sub-section (6) of Section 149 of the Companies Act 2013.

The resolution seeks the approval of members for the appointment of Shri M.C.Hipparagi as anIndependent Director of the Company for a period of two years from 29.09.2016 to till theconclusion of 23rd AGM pursuant to Section 149 and other applicable provisions of the CompaniesAct 2013 and the Rules made thereunder he is not liable to retire by rotation.

In the opinion of the Board of Directors, Shri M.C.Hipparagi, the independent director proposedto be appointed, fulfills the conditions specified in the Companies Act, 2013 and Rules made thereunder and he is independent of the management. A copy of the letter for the appointment ofShri M.C.Hipparagi as an independent director setting out the terms and conditions is available

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for inspection without any fee by the members at the Company’s registered office during normalbusiness hours on working days up to the date of the AGM.

No director, key managerial personal of their relatives, except Shri M.C.Hipparagi, to whom theresolution relates, is interested or concerned in the resolution.

• Expertise in Specific functional areas:

Shri Mahalingappa Chandrappa Hipparagi, B.A., M.Com, having 35 years experienced as a Professorin Head of the Department of Commerce of Karnataka University College, Dharwad and nowpresently designated as a “Director” in Shri Prabhulingeshwar Souhard Credit Co-operative Ltd,(SPSCCL) Jamkhandi from the year 2003-04 onwards.

Shri M.C.Hipparagi, having vast and well qualified, experienced in fields like Banking, Sugarindustry and Agriculture. Therefore he is eligible to become “Independent Director” and he is notcovered under director retire by rotation.

• Directorship in other Companies : NIL• Membership in other Board Committee : NIL• Shareholding as on 31.03.2016 : 11,000 Shares

Item No.8

Confirmation of Remuneration to Cost Auditors for the F.Y. 2016-17.

The Board, on the recommendation of the Audit Committee, had approved the appointment andremuneration of M/s. S.K.Tikare& Co., Cost Accountants (M.No.020794) (FRN.101039) as theCost Auditors to conduct the audit of the cost records of the Company relating to Sugar andElectricity for the financial year ending March 31, 2017 at a remuneration of Rs.1,00,000/-(Rupees One Lakhs only) per annum for FY 2016-17.

In accordance with the provisions of Section 148 of the Act, read with the Companies (Audit andAuditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by theshareholders of the Company at the ensuing 21st AGM. Accordingly, consent of the members issought for passing an Special Resolution as set out at Item No.8 of the Notice for ratification ofthe remuneration payable to the Cost Auditors for the financial year ending March 31, 2017.

None of the Directors / Key Managerial Personnel of the Company/ their relatives is, in any way,concerned or interested, financially or otherwise, in the resolution set out at Item No.8 of theNotice. The Board recommends for the ordinary Resolution set-out at Item No.8 of the Notice forapproval by shareholders.

Place : Siddapur

Date : 06-08-2016

By Order of the Board of Directors

For Shri Prabhulingeshwar Sugars


Sd/-

Jagadeesh S. Gudagunti


(DIN-00464873)

CIN : U85110KA1995PLC017861Registered Office :1st Floor, “Sukrut”, Building,Opp. K.C. Park Main Gate, P.B. Road,Dharwad - 580 008. Karnataka StateTel .: 08353 - 238004, 238200 and 0836-2745036Fax : 08353-238164, 238166E-mail : [email protected] : www.prabhusugar.com

14


To,The Members,Shri Prabhulingeshwar Sugars and Chemicals Limited

I heartly welcome you all to this 21st Annual General Meeting of the Company.

The Directors hereby present the Twenty first Annual Report of your Companyon the business and operations for the year ended March 31, 2016.

1. FINANCIAL SUMMARY AND PERFORMANCE OF THE COMPANY :

OPERATING RESULTS : (Rs. In Lakhs)

37,496.88

33,996.81

3,500.07

3,109.60

1,141.92

(751.44)

(803.10)

(1,554.54)

(1.61)

4,661.86

3,343.30

40,626.30

36,245.67

4,380.63

2,983.13

1,167.18230.32

(1,555.00)

(1,324.22)

0.49

4,661.86

3,573.62

No. Particulars 2015-16 2014-15

12

3

4

5

6

7

8

9

10

11

TurnoverCost of SalesOperating Profit

Interest

Depreciation

Net Profit After Tax (Loss)

Balance of Profit brought forward from the previous year

Balance carried to Balance SheetEarnings Per Share (Rs.)Share Capital

Net Worth

PRODUCTION PERFORMANCE FOR THE YEAR 2015-16 & 2014-15

A) SUGAR DIVISION: (Season-wise) :


1

2

3

4

Sugarcane Crushed

Sugar Produced

Recovery (%)

Export of Sugar

B) CO-GEN POWER DIVISION : (Financial Year-wise) :

1

2

3

Power Exported (Unit)

Power Rate (Per Unit)

Total Value


BOARD’S REPORT

10,31,249 M. Tons

11,56,800 Qtls.

11.22%

3,32,625 Qtls.

12,56,070 M. Tons

15,43,800 Qtls.

12.29%

1,39,080 Qtls.

6,11,18,750

Rs. 4.06

Rs. 24.83 Crores

6,89,48,250

Rs. 4.94

Rs. 34.05 Crores

15


2. INDUSTRIAL SCENARIO :

Sugar Industry :The Indian sugar industry is a key driver of rural development, supporting India’s economicgrowth. The industry is supporting farmers and their families, along with workers andentrepreneurs, apart from wholesalers and distributors spread across the country. It hasdone so by commercially utilizing the rural resources to meet the large domestic demand forsugar and by generating surplus energy to meet the increasing energy needs of India.

Sugar industry in an agro based industry, now a days the Indian sugar industry facing lot ofproblems and its known fact that every year a typical problem will be faced.The reasons forthis may be because of dependency on agriculture or may be because of Natural calamitiesor may because of interference of politics or sometimes it may occur because ofmisunderstanding between farmers and sugar industry owners.

Due to lack of sufficient rain for the last two year the sugar cane cultivation decreaseddrastically. It is presumed that hardly 50% of the cane will be available for crushing in thestate of Karnataka and it is estimated that, the sugar production for the forthcomingseason 2016-17 will fall by 50% due to drought faced in the current season. Due to thisdrought, farmer will not gain financially and on the other side due to lack of sufficient supplyof sugarcane industry also ends up in paying double cost of production as such FinancialInterest to banks and financial institutions, Repairs and Maintenance, Salaries to workers,Depreciation are in fixed nature irrespective of quantum of crushing. This will results in lossto farmers as well as factories though market price for the sugar increase, on other wordsfactories are not able to realise market price profitability due to double cost of productionof sugar. Sugar is an essential commodity, though 75% of total production consumed bysweetener industries like chocolate, bisuits, beverages and others, Central Governmentalways tries to control sugar price by importing from the other counties, putting stockholding limits etc, if this happens financial position will badly affect in such manner that thesurvival will be of big question mark.

Another important shocking thing that, now days no one is coming forward to buy sugarfactory co-gen power and even State or Central government is also not showing any interestto procure power from us. If government ignore or refuse to buy the power from us, thenour total electricity generation will be forced to pump at IEX market platform where we canrealize 2.00 to Rs. 2.50 per unit, whereas the cost of sale of power itself is Rs. 4.50 perunit. As such sugar factories are not using any fossil fuel to generate power, it is usingbaggasse to generate power and it is ‘green power’ i.e. renewable power, to support thisgovernment should buy electricity generated by sugar factories to support industries andmaintain environment eco-friendly. Maharashtra State and other Neibhouring states arepaying Rs. 6.00 per unit for the sugar Co-gen power, all factories in Karnataka requestedState Government to pay Rs. 6.00 per unit to support green energy and help farmer andmillers financially.

New sugar industries entered in the market and existing sugar industries expanding theircrushing capacities and if good quality sugar cane produced, Indian sugar factories willproduce 300 – 320 lakh MT of sugar and the domestic consumption requirement is 220 – 240Lakhs MT, on an average Indian sugar industries producing nearly 100 MT extra than itsrequirement, due to this factor the market price for the sugar decreasing. To avoid this,industry should shift its production from sugar to ethanol, ethanol will be used as fuel byblending with petrol. Industries must produce the sugar to the extent of its requirement,any excess should be shifted to production of ethanol and blending with petrol which is onlyway factories should think.

16


Power :At present, your company has one of the best Co-gen unit compare to others and awardedby SISSTA, Chennai as “Best Performing Co-generation Award” for the Sugar Season2013-14 and Generating 41.50 MW of Power Per Hour and exporting 25.00 MW per Hour ofpower through Indian Energy Exchange (IEX) and PCKL on daily, weekly and monthly basis.The Company had an agreement with PCKL through M/s. PTC India Ltd., New Delhi exportof power 20.00 MW/hr during the period from December 2015 to April 2016 i.e for a periodof 5 months. In this period company has exported power as per terms and conditions of theagreement entered by the company with PTC India Ltd, New Delhi.

3. EXTRACT OF THE ANNUAL RETURN :

In accordance with Section 134(3)(a) of the Companies Act, 2013 extract of theAnnual Return in prescribed format MGT-9 is appended as Annexure-1 to the Board’sReport.

4. BOARD MEETING :

During the year the Board of Directors have met four times.

4. a) Directors :

The composition of the Board of Directors and changes in the composition of theBoard of Directors are reported as under :

S.N. Name DesignationDate of

AppointmentDate of

Resignation

1

2

3

4

5

6

7

8

9

10

Shri Jagadeesh S. Gudagunti

Shri Rajendrakumar S. Gudagunti

Shri Nagappa G. Sanadi

Shri Deval A. Desai

Shri Sateesh S. Gudagunti

Shri Sudheer S. Gudagunti

Shri Mallappa C. Koti

Shri Umesh S. Hiremath

Shri Dharmalingayya .J. Gudagunti

Smt. Ishwari A. Gudagunti


Executive Director

Director

Director

Director

Director

Independent Director

Independent Director

Director

Director

26.09.2013

01.08.2014

28.09.2013

27.09.2014

28.09.2013

27.09.2014

27.09.2014

27.09.2014

12.02.2015

31.03.2015

-

-

-

-

-

-

-

-

-

-

4. (b) Key Managerial Personnel:

S.N Name DesignationDate of

AppointmentDate of

Resignation

1

2

3

Shri K. L. Revannaswamy

Shri V. Subbu Rathinam

Shri Mahendra B. Horaginamani

Chief Financial Officer & I/c EVP

Chief Financial Officer & EVP

Company Secretary cum GM (F&A)

23.06.2014

04.08.2015

31.03.2015

31.05.2015

06.04.2016

--

17


Name of theCommittee

Composition Highlights of duties, responsibilitiesand activities

Audit Committee Shri M.C.Koti – ChairmanShri U.S.Hiremath – MemberShri N.G.Sanadi – Member

• All the recommendations made by theAudit Committee during the year wereaccepted by the Board.

• The Company has adopted the Whistleblower mechanism for Directors and allemployees to report concerns aboutunethical behaviour, actual or suspectedfraud, or violation of the Company’s Codeof Business Conduct and Ethics. The Whistleblower Policy is appended as Annexure-3 tothe Board’s Report.

4. (c) Directors Retiring by Rotation :

As per the provisions of the Companies Act, 2013 and Articles of Association of theCompany, Shri Deval A. Desai, and Shri Sudheer S. Gudagunti, Directors retire byrotation at the ensuing 21st Annual General Meeting and being eligible, have offeredthemselves for re-appointment.

4. (d) Committees of the Board :

Currently, the Board has four Committees. The composition of the Committees,duties, responsibilities and activities, are as per the applicable provisions of the Actand Rules, which are as follows :

Nomination andRemunerationCommittee

Shri U.S.Hiremath – ChairmanShri M.C.Koti – MemberShri N.G. Sanadi - Member

• The Committee oversees & administersexecutive compensation, operating undera written charterad opted by the Board ofDirectors.• The Committee has designed andcontinuously reviews the compensationprogramme of WTD & KMP.• A copy of the policy is appended asAnnexure-2 to the Board’s Report

Stake HoldersRelationshipCommittee

Shri R.S.Gudagunti –ChairmanShri Deval A. Desai- MemberShri Sudheer S. Gudagunti –Member

• The Committee reviews and ensuresredressal of Investor grievances.• The Committee noted that all the griev-ances of the investors have been resolvedduring the year.

Share TransferCommittee

Shri R.S.Gudagunti –ChairmanShri U.S.Hiremath – MemberShri M.C.Koti – Member

• The Committee reviews and approvestransfer of shares, transmission of sharesetc.

18


4. (e) Declarations Given by Independent Directors :

Both Independent Directors have given their declarations to the effect that they meet thecriteria of independence as laid down under Section 149 (6) of the Companies Act, 2013.

5. DIRECTORS’ RESPONSIBILITY STATEMENT :

In accordance with the requirements of Section 134(3)(c) of the Companies Act, 2013,Directors of the Company hereby declare that, your Directors make the followingstatements.

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

b) the Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis; and

e) the Directors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

6. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION INCLUDINGCRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES,INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS STATED IN SECTION 178(3) OF THE COMPANIES ACT, 2013 :

Your Company has an appropriate mix of Executive and Independent Directors to maintainthe independence of the Board. As on date, the Board consists of ten members, two ofwhom are Executive or whole-time Directors, and two are Independent Directors and onewoman Director. The Board periodically evaluates the need for change in its compositionand size. The policy of the Company on Directors' appointment and remuneration,including criteria for determining qualifications, positive attributes, independence of aDirector and other matters provided under Sub-section (3) of Section 178 of the CompaniesAct, 2013, adopted by the Board, is appended as Annexure-2 to the Board's Report. Weaffirm that the remuneration paid to the Directors is as per the terms.

7. VIGIL MECHANISM (WHISTLE BLOWER POLICY) :

The Company has established a Whistle Blower Policy for Directors and employees to reporttheir genuine concern. The policy is enclosed as Annexure-3

8. SECRETARIAL AUDIT REPORT :

Secretarial Audit report pursuant to Section 204 of the Companies Act, 2013 is enclosed asAnnexure-4

19


9. EXPLANATION ON QUALIFICATION MADE BY THE :

a) Auditors in their report : NILb) Secretarial auditors in their report : NIL

10.DETAILS IN RESPECT OF FRAUDS REPORTED BY THE AUDITORS UNDER SECTION143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE REPORTABLE TO THECENTRAL GOVERNMENT :

- NIL -

11.PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 :

Particulars of loans, guarantees or investments u/s186 are given in the enclosed Annexure-5

12.PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIESREFERRED TO IN SECTION 188 (1) :

Particulars of contracts or arrangements with related parties referred to in section 188(1)are given in prescribed Form AOC-2 enclosed as Annexure-6.

13.AMOUNT TRANSFERRED TO RESERVES :- NIL -

14.PROPOSED DIVIDEND :- NIL -

15.MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITIONOF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THEFINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTSRELATES AND THE DATE OF THE REPORT :

There are no material changes and commitments, affecting the financial position of theCompany which have occurred between the end of the financial year of the Company towhich the financial statements relates and the date of the report.

16.DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ANDFOREIGNEXCHANGE EARNINGS AND OUTGO :

A note on details of Conservation of energy, Technology absorption and Foreign exchangeearnings and out go,is enclosed as Annexure-7.

17.A STATEMENT ON DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENTPOLICY :

The business and financial risk of the Company are akin to any other Company in the sameline of business. The Company has a robust Enterprise Risk Management frame work toidentify and evaluate business risk opportunities. This framework seeks to create transpar-ency, minimize adverse impact on the business objectives and enhance the Company’s com-petitive advantage. The business risk policy defines the risk management approach acrossthe enterprise at various levels, including documentation and reporting. The model hasdifferent modes that help in identifying risk trends, exposure and potential impact analysisat a Company level and also separately for different business segments. The Company hasidentified various risks and also has mitigation plans for each risk identified.

20


18.CORPORATE SOCIAL RESPONSIBILITY (CSR) :

The Company is not required to constitute Corporate Social Responsibility (CSR) Committeeand also not required to spend any amount under the Corporate Social Responsibility(CSR)activity under provisions of Section 135 of the Companies Act, 2013.

Even though CSR provisions will not applicable to us, you will appreciate the initiatives taken byyour Company, providing the following services to the farmers and the public in our area ofoperation.

• The Company has continued its services like free supply of precious drinking water to thesocial and religious functions organized by the general public, farmers and shareholders inthe area of operation of the Company. To aid this, Company has reserved two new vehiclesto supply of precious drinking water to general public and its shareholders.

The Company also implemented following social welfare measures in the vicinity offactory site.

• Health Camps : To create awareness of the health in the minds of the farmers in andaround villages of the area of the operation of the factory, the company hasorganized the free health check-up camps, collaboration with Shri Tulasigiri DiabeticHospital, Bagalkot and M/s Wanless Mission Hospital, Miraj during the year 2011-12 and 2012-13.

19. STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATIONHAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITSCOMMITTEES AND INDIVIDUAL DIRECTORS :

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annualperformance evaluation of its own performance, the Directors individually, as well as theevaluation of the working of its Audit, Nomination and Remuneration Committee and issatisfied with the performance of them.

20. INTERNAL FINANCIAL CONTROL :

Adequacy of Internal Financial Control with reference to financial statements:

• The company maintains all its records in tally system with VSI software and the work flowand approvals are routed through this system.

• The company has laid down adequate systems and well-drawn procedures for ensuringinternal financial controls. It has appointed internal auditors for periodically checking andmonitoring the internal control measures.

• Internal audit reports are discussed along-side of management comments and the finalobservation of internal auditor.

• The Board of Directors have adopted various policies like whistle blower policy, developmentand implementation of risk management policy and put in place budgetary control andmonitoring measures for ensuring the orderly and efficient conduct of the business, thesafeguarding of its assets, the prevention and detection of frauds and errors, the accuracyand completeness of the accounting records and the timely preparation of reliable financialinformation.

21


21. INFORMATION REQUIRED AS PER RULE 5 (2) OF THE COMPANIES (APPOINTMENTAND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 :

During the year, there were no employees covered under Rule 5 (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014.

22. PUBLIC DEPOSITS :

The Company has not accepted any public deposits under Chapter V of the Companies Act,2013 and the Companies (Acceptance of Deposit) Rules, 2014 during the financial year.So, details to be given under the Rule 8(5)(v) of the Companies (Accounts) Rule, 2014 are: NIL.

23. HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES AND JOINT VENTURES :

a) The Company is not subsidiary of any Companyb) The Company has no subsidiaries, associates Companies or joint ventures in India

or abroad.

24. AUDITORS :

M/s. Nataraj & Co., Chartered Accountants, Hubballi, who were appointed at the 19th

Annual Gen eral Meeting, hold their office as Auditors of the Company till conclusion of 22th

Annual General Meeting. The said Auditors being eligible to continue for the financial year2016-17 andexpressed their willingness for their auditor ratification in ensuing 21st AnnualGeneral Meeting.

25. INTERNAL AUDITORS :

Shri G. Shivakumar Chartered Accountants, Hubballi have been conductingperiodcally Audits of all operations of the Company and their findings have been reviewedregularly. Your Directors note with satisfaction that no material deviations from theprescribed policy and procedures have been observed.

With effect from 01.04.2016 Smt. Prafulla G. Melinamani, Chartered Accountants has beenappointed as Internal Auditors of the company.

26. SECRETARIAL AUDITORS :

M/s. Gopalakrishnaraj H.H. & Associates, Company Secretary in practice, Bengaluru havebeen appointed as Secretarial Auditors of the Company for the Financial year 2015-16 asrequired under section 204 of the Companies Act, 2013 and rules thereunder.

27. COST AUDITORS :

The cost audit report for the year ended 31st March 2015 given by Shri Hari T. Devadiga.,Cost Accountant (M.No.22200) was filed on 17.11.2015 vide SRN.S43193002.

M/s. S. K. Tikare & Co., Cost Accountants appointed as “Cost Auditor” of the companyrelating to Sugar and Electricity for the Financial year 2016-17.In accordance with the

22


provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules,2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholdersof the Company.

Accordingly, consent of the members is sought for passing an Ordinary Resolution as set outat Item No.8 of the Notice for ratification of the remuneration payable to the Cost Auditorsfor the financial year ending 31st March, 2017.

None of the Directors / Key Managerial Personnel of the Company/ their relatives is, in anyway, concerned or interested, financially or otherwise, in the resolution set out at Item No.8of the Notice.

28. CORPORATE GOVERNANCE :

Your Company has voluntarily taken steps for implementation of directives of CorporateGovernance to ensure value system of integrity, fairness, transference, accountability andadoption of the highest standards of business ethics which are benefit to all stakeholders.

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

During the year the company did not have any woman employee. So, disclosure under thesexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013,does not arise.

30. AWARDS :

We are happy to informing you that, during the year your company has received the followingawards:

• During the year 2016-17 Shri Jagadeesh Gudagunti, C.M.D. awarded “Life TimeAchievement Award” from The Sugar Technologists Association of India(STAI), New Delhi.

• State Level Safety Awards for “Best Fuel Efficient Boiler” by Karnataka State Safetyinstitute Govt. of Karnataka.

• “Best Co-generation platinum award” for the Season 2013-14 by South Indian SugarCane and Sugar Technologist Association (SISSTA).

• “Best Co-generation Award 2nd Prize” for the season 2011-12 in Karnataka – given bySISSTA at Chennai.

• “Best Sugarcane Development Award 1st Prize” for the season 2009-10" inKarnataka – given by SISSTA at Chennai.

• “Udyog Ratna” from Institute of Economic Studies, New Delhi.

• “Vanijya Ratna” from Karnataka Chamber of Commerce and Industries, Hubballi.

• “International Gold Star Millennium Award” from Indo-Nepal Friendship & EconomicCo-operation, Nepal.

• “Best Performing Sugar Factory” in South India – given by SISSTA at Hyderabad.

23



For and on behalf of the Board of Directors


Chairman & Managing Director(DIN-00464873)

31. ACKNOWLEDGEMENTS :

The Directors place on record their appreciation of cooperation and continued supportextended by Farmers, Harvesters & Transporters, Customers, Shareholders, vendors, Bankers,the Government, and Statutory authorities for the Company’s growth. We thank employeesat all levels across the group for their valuable contribution in our progress and look forwardto their continued support.

24


Annexure-1FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on 31-03-2016

(Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company(Management & Administration) Rules, 2014.)

1

2

3

4

5

6

7

CIN

Registration Date

Name of the Company

Category / Sub-categoryof the Company

Address of the Registeredoffice & contact details

Whether listed company

Name, Address & contactdetails of the Registrar &Transfer Agent, if any.

U85110KA1995PLC017861

25-05-1995

Shri Prabhulingeshwar Sugars and Chemicals Limited

Indian Non-Government Company.

1st Floor, “Sukrut” Building, Opp. K.C. Park Main Gate,P.B. Road, Dharwad - 580 008, Karnataka StateTel : 0836-2745036, 08353-238004

No

Not Applicable

I. REGISTRATION & OTHER DETAILS :

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing10% or more of the total turnover of the company shall be stated)

Sl.No.

Name and Description of mainproducts / service

NIC Code of theProduct / service

% to total turnover of thecompany

1 Sugar 2060

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sl.No.

Name and Address ofthe company CIN / GLN

Holding /Subsidiary /Associates

% ofsharesheld

Applicablesection

--NIL--

84.68%

25


SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)(i) Category-wise Share Holding

IV.

(A) Promoters

(1) Indian

a) Individual

b) Central Govt.

c) State Govt(2)

d) Bodies Corpo.

e) Banks / FI

f) Any other

Sub Total (A)(1)

(2) Foreign

a) NRI’s Individuals

b) Other-Individuals

c) Bodies Corporate

d) Banks/FI’s

e) Any other

Sub Total (A)(2)

A=A(1)+A(2)

0

0

0

0

0

0

0

0

0

0

0

0

0

15170641

0

0

0

0

0

15170641

0

0

0

0

0

0

15170641

15170641

0

0

0

0

0

15170641

0

0

0

0

0

0

15170641

32.54

0

0

0

0

0

32.54

0

0

0

0

0

0

32.54

0

0

0

0

0

0

0

0

0

0

0

0

0

0

15262641

0

0

0

0

0

15262641

0

0

0

0

0

0

15262641

15262641

0

0

0

0

0

15262641

0

0

0

0

0

0

15262641

32.74

0

0

0

0

0

32.74

0

0

0

0

0

0

32.74

0.20

0.20

0

0

0

0

0

0

0.20

Category ofShareholders

No. of Shares held at the beginningof the year (As on 31/03/2015)

No. of Shares held at the end of theyear (As on 31/03/2016) % Change

during theyearDemat Physical Total % of

TotalShares

Demat Physical Total % ofTotal

Shares

(B) PublicShareholding1. Institutions

a) Mutual Funds

b) Bank/FI

c) Central Govt

d) State Govt(s)

e) Venture Capital Capital Fundsf) Insurance Companiesg) FIIS

h) Foreign Venture Capital Fundsi) Others(specify)

Sub-total (B)(1) :-2. Non-Institutions

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

9191800

0

0

0

0

0

0

0

0

0

0

9191800

0

0

0

0

0

0

0

0

0

0

19.72

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

9191800

0

0

0

0

0

0

0

0

0

0

9191800

0

0

0

0

0

0

0

0

0

0

19.72

0

0

0

0

0

0

0

0

0

0

0

0

26


i) Individualshareholdersholding nominalshare capitalupto Rs. 1 lakh

ii) Individualshareholdersholding nominalshare capital inexcess of Rs 1lakh

c) Others(specify)

Sub-total (B)(2) :-Total PublicShareholding(B)=(B)(1)+(B)(2)

C. Shares heldby Custodian forGDRs & ADRs

Grand Total(A+B+C)

0

0

0

0

0

0

0

15643151

6613003

0

31447954

31447954

0

46618595

33.56

14.19

0

67.46

67.46

0

100.00

0

0

0

0

0

0

0

15634958

6529196

0

31355954

31355954

0

46618595

33.54

14.01

0

67.26

67.26

0

100.00

-0.02

-0.18

0

-0.20

-0.20

0

15643151

6613003

0

31447954

31447954

0

46618595

15634958

6529196

0

31355954

31355954

0

46618595

(ii) Shareholding of Promoters :

1

2

3

4

5

6

7

8

9

10

Sri. Jagadeesh S. Gudagunti

Sri. Satish S. Gudagunti

Sri. Rajendrakumar S.Gudagunti

Sri. Sudheer S. Gudagunti

Sri. Nagayya A.CharantimathSri. VeerayyaKochalapurmathSri. Subodh Vinayak Joshi

Sri. Nagappa G. Sanadi

Sri. Appasaheb R. Patil

Sri. Salleppa B. Babagond

S.No. Shareholder’s Name Shareholding at the beginningof the year

Shareholding at the end of theyear

No. ofShares

% of totalSharesof the

company

% of SharesPledged/

encumbered

to totalsharesNo. ofShares

% of totalShares of

thecompany

% of SharesPledged/

encumberedto total shares

% changein shareholdingduring

the year

1,21,64,334

9,56,035

10,36,334

8,79,134

35,801

0

11,00177,001

11,001

0

26.09

2.05

2.22

1.89

0.08

0

0.02

0.17

0.02

0

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

12256334

956035

1036334

879134

35801

0

11001

77001

11001

0

26.29

2.05

2.22

1.89

0.08

0

0.02

0.17

0.02

0

0.20

0

0

0

0

0

0

0

0

0

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

27


(iii) Change in Promoter’s Shareholding :

Shri Nagayya A. CharantimathBeginning of the YearChanges during the yearEnd of the yearShri Veerayya KochalapurmathBeginning of the yearChanges during the yearEnd of the yearShri Subodh Vinayak JoshiBeginning of the yearChanges during the yearEnd of the yearShri Nagappa Gadigappa SanadiBeginning of the yearChanges during the yearEnd of the yearShri Appasaheb Rayagowda PatilBeginning of the yearChanges during the yearEnd of the year

5

6

7

8

Transfer

Transfer

Transfer

Transfer

Transfer

358010

00

110010

770010

110010

35801

0

11001

77001

11001

9

0.080

00

0.020

0.170

0.020

0.08

0

0.02

0.17

0.02

S.No. Name of the Promoter Reason

Shareholding at thebeginning of the year

No. of shares % of totalShares

Cumulative Shareholding during the year

AT THE BEGINNING OF THE YEAR

Shri Jagadeesh S. GudaguntiBeginning of the YearChanges during the yearEnd of the yearShri Satish S. GudaguntiBeginning of the yearChanges during the yearEnd of the yearShri Rajendrakumar S. GudaguntiBeginning of the yearChanges during the yearEnd of the yearShri Sudheer S. GudaguntiBeginning of the yearChanges during the yearEnd of the year

1

2

3

4

Transfer

Transfer

Transfer

Transfer

15170641

1216433492000

9560350

10363340

8791340

32.54

26.090.20

2.050

2.220

1.890

12256334

956035

1036334

879134

26.29

2.05

2.22

1.89

No. ofshares

% of totalShares

28


Shri Salleppa Balappa BabagondBeginning of the yearChanges during the yearEnd of the yearAT THE END OF THE YEAR

Transfer00

0

15262641

00

0

32.74

10

(iv) Shareholding Pattern of top ten Shareholders : (Other than Directors, Promoters & Holders of GDRs & ADRs) :-

S.No. For Each of the Top 10 Shareholders


No. ofshares

% of totalShares of the

company


AT THE BEGINNING OF THE YEARShri Jagadeesh S. Gudagunti (HUF)Shri M.I. GhanakumarmathShri Kallinath C HiremathShri Shivayya A. HiremathShri Jagadeesh P. HiremathShri Gangadhar P. SarangamathShri G.I. GhanakumarmathShri Virupakshayya J. GudaguntiShri A.M. JayaprakashShri Sudheer Shivayya Gudagunti (HUF)

12345678910

2035902306000243002220000205500192800192000182100180000177000137500

A

No. ofshares

% of total Shares of the

company

4.370.660.520.470.440.410.410.390.390.380.29

306000243002220000205500177827192000182100180000177000137500

0.660.520.470.440.380.410.390.390.380.29

(V) Shareholding of Directors and Key Managerial Personnel :

S.No. Shareholding of each Directors and each

Key Managerial Personnel


No. ofshares

% of totalShares ofthecompany


DIRECTORS

Shri Jagadeesh S. GudaguntiShri Rajendrakumar S. GudaguntiShri Sudheer S. GudaguntiShri Sateesh S. GudaguntiShri N.G. SanadiShr D.A. DesaiShri M.C. KotiShri D.J. Gudagunti

KEY MANAGERIAL PERSONNAL (KMP)Shri Jagadeesh S. GudaguntiShri V. Subbu RathinamShri Mahendra B. Horaginamani

12345678

123

121643341036334879134956035770017900028000

1124000

1183833400

No. ofshares

% of total Shares of the

company

26.092.221.892.050.170.170.062.41

25.3900

122563341036334879134956035770019000

280001124000

1225633400

26.292.221.892.050.170.020.062.41

26.2900

29


Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for Increas/ Decrease (e.g. allotment / transfer / bonus / sweat equity etc) :

S.No. Name of the Top 10 Shareholders Reason


No. of shares % of totalShares


Shri. Jagadeesh S. GudaguntiBeginning of the YearChanges during the yearEnd of the year

Shri Rajendrakumar S. Gudagunti

Beginning of the yearChanges during the yearEnd of the yearShri Sudheer S. GudaguntiBeginning of the yearChanges during the yearEnd of the yearShri Satish S. GudaguntiBeginning of the yearChanges during the yearEnd of the yearShri N.G. SanadiBeginning of the yearChanges during the yearEnd of the year

1

2

3

4

Transfer12164334

92000

10363340

8791340

9560350

770010

26.090.20

2.220

1.890

2.050

0.170

12256334

1036334

879134

956035

77001

26.29

2.22

1.89

2.05

0.17

No. ofshares

% of totalShares

5

Shri D.A. DesaiBeginning of the YearChanges during the yearEnd of the yearShri M.C. KotiBeginning of the yearChanges during the yearEnd of the yearShri DharmalingayyaJ. GudaguntiBeginning of the yearChanges during the yearEnd of the year

6

7

8

90000

280000

11240000

0.020

0.060

2.410

9000

28000

1124000

0.02

0.06

2.41

30


V. INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment :

TotalIndebtedness

Indebtedness at the beginning of thefinancial yeari) Principal Amountii) Interest due but not paidiii) Interest accrued but not due

Total (i+ii+iii)Change in Indebtedness during thefinancial year* AdditionReductionNet ChangeIndebtedness at the end of the financial yeari) Principal Amountii) Interest due but not paidiii) Interest accrued but not due

Total (i+ii+iii)

69,35,31,707----

69,35,31,707

5,00,00,0009,37,53,707

64,97,78,000----

64,97,78,000

43,59,78,596----

43,59,78,596

44,08,83,93259,08,85,640

28,59,76,888----

28,59,76,888

--------

----

--------

112,95,10,303----

112,95,10,303

49,08,83,93268,35,22,640

93,57,54,888----

93,57,54,888

Secured Loansexcluding deposits

UnsecuredLoans

Deposits

KEY MANAGERIAL PERSONNAL (KMP) :

Shri Jagadeesh S. GudaguntiBeginning of the yearChanges during the yearEnd of the yearShri V. Subbu RathinamBeginning of the yearChanges during the yearEnd of the yearShri M.B. HoraginamaniBeginning of the yearChanges during the yearEnd of the year

1

Transfer

1216433492000

00

00

2

3

26.090.20

00

00

12256334

0

0

26.29

0

0

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL :A. Remuneration to Managing Director, Whole-time Directors and/or Manager :

SN. Particulars of Remuneration Name of MD/WTD/Manager Total Amount

J.S. GudaguntiCMD

R.S. GudaguntiED

1 Gross salary

(a) Salary as per provisions contained insection 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section17(3) Income-tax Act, 1961Stock OptionSwear EquityCommissions % of profitOthers, please specify (Bonus)Total (A)Ceiling as per the Act

2

345

9,00,000

00

0000

9,00,000

8,40,000

0

0

0000

8,40,000

17,40,000

0

0

0000

17,40,000

31


B. Remuneration to Other Directors :

Particulars of RemunerationSN. Total AmountName of DirectorsIndependent DirectorsFee for attending board committee meetingsCommissionOthers, please specifyTotal (1)

1 U.S. Hiremath3,65,000

00

3,65,000

M.C. Koti3,65,000

00

3,65,000

7,30,00000

7,30,000

IshwariA.

Gudagunti

Fee for attendingboard committeemeetings

Commission

Others, please specify

Total(2)

Total (B)=(1+2)

Total ManagerialRemuneraion

Overall Ceiling as perthe Act

2 Other Non-ExecutiveDirectors

D.A.Desai

N.G.Sanadi

SudheerGudagunti

SateeshGudagunti

D.J.Gudagunti

3,00,000

0

0

3,00,000

3,25,000

0

0

3,25,000

3,00,000

0

0

3,00,000

3,00,000

0

0

3,00,000

3,00,000

0

0

3,00,000

3,00,000

0

0

3,00,000

18,25,000

0

0

18,25,000

NIL

NOT APPLICABLE

Total

*Shri V. Subbu Rathinam was resigned for the post of Chief Financial Officer and Executive Vice President andrelieved from the office of the company with effect from 05-07-2016 after office hours.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD :

SN Particulars of Remuneration Key Managerial Personnel

CS

Mahendra B.H.

CFO*

V. Subbu Rathinam

Total

1 Gross salary

(a) Salary as per provisions contained insection 17(1) of the Income-tax Act, 1961

(b) Value of perquisities u/s 17(2)Income-tax Act, 1961

(c) Profits in lieu of salary u/s 17(3)Income- tax Act, 1961

Stock Option

Sweat Equity

Commission

- as % of profit

others, specify

Others, (Ex-gratia)

Total

2

3

4

5

14,18,500

0

0

0

0

0

0

0

14,18,500

18,00,000

0

0

0

0

0

0

0

18,00,000

32,18,500

0

0

0

0

0

0

0

32,18,500

32


Type Section of theCompanies Act

BriefDescription

Details of Penalty/Punishment/Compoundingfees imposed

Authority(RD/NCLT/

COURT)

Appeal made,if any (give

Details)

A. COMPANY

Penalty

Punishment

Compounding

B. DIRECTORS

Penalty

Punishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment

Compounding

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES : NIL

33


Annexure-2

NOMINATION AND REMUNERATION POLICY :Our policy on the appointment and remuneration of Directors and Key Managerial Personnel provides a frameworkbased on which our human resources management aligns their recruitment plans for the strategic growth ofthe Company. The Nomination and Remuneration policy is provided herewith pursuant to Section 178(4) of theCompanies Act.

I. PREAMBLE:Pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of every public company shallconstitute Nomination and Remuneration Committee .The company already constituted Nomination andRemuneration Committee comprising of two non-executive independent Directors which also meets therequirement of Companies Act 2013.

A Policy is required to be formulated in compliance with section 178 of the companies Act 2013 read alongwith the applicable rules

II. OBJECTIVES:

The key objectives of the committee :

a) To guide the Board in relation to appointment and removal of Directors and Key Managerial Personneland Senior management.

b) To evaluate the performance of the Board members and submit the necessary reports for furtherevaluation from the Board.

c) To recommend to the Board on Remuneration payable to the Directors and Key Managerial Personneland Senior management.

III. DEFINITIONS :

• “Board” means Board of Directors of the Company.

• “Company” means “Shri Prabhulingeshwar Sugars and Chemicals Limited.”

• “Employees’ Stock Option” means the option given to the directors, officers or employees of a companyor of its holding company or subsidiary company or companies, if any, which gives such directors, officersor employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a futuredate at a pre-determined price.

• “Independent Director” means a director referred to in Section 149 (6) of the Companies Act, 2013.

• “Key Managerial Personnel” (KMP) means pursuant to Section 203 of the Companies Act, 2013:

(i) Chief Executive Officer or the Managing Director or the Manager

(ii) Whole time Director,

(iii) Company Secretary,

(iv) Chief Financial Officer and

(v) Such other officer as may be prescribed.

• “Nomination and Remuneration Committee” shall mean a Committee of Board of Directors of the Company,constituted in accordance with the provisions of Section 178 of the Companies Act, 2013.

• “Policy or This Policy” means, “Nomination and Remuneration Policy.”

• “Remuneration” means any money or its equivalent given or passed to any person for services rendered byhim and includes perquisites as defined under the Income-tax Act, 1961.

• “Senior Management” means personnel of the company who are members of its core management teamexcluding Board of Directors. This would include all members of Management one level below the ExecutiveDirectors, including all the functional heads.

34


IV. INTERPRETATION : Terms that have not been defined in this Policy shall have the same meaning assigned to them in the Companies Act, 2013 as amended from time to time.

V. GUIDING PRINCIPLES : The Policy ensures that :

a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivateDirectors / KMP of the quality required to run the Company successfully.

b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks.c) Remuneration to Directors and Key Managerial Personnel and senion management involves a balance

between fixed and incentive pay reflecting short- and long-term performance objectives appropriateto the working of the Company and its goals.

d) To lay down criteria and terms and conditions with regard to identifying persons who are qualified tobecome Directors (Executive and Non-executive) and persons who may be appointed in senionmanagement, Key Managerial positions and to determine their remuneration.

e) To determine remuneration based on the Company’s size and financial position and trends & Practiceson remuneration prevailing in peer companies, in the industries.

f) To carry out evaluation of the performance of Directors, as well as Key Managerial and to provide forreward(s) linked directly to their effort, performance, dedication and achievement relating to theCompany’s operations; and

g) To retain, motivate and promote talent and to ensure long-term sustainability of talented managerialpersons and create competitive advantage.

h) To lay down criteria for appointment, removal of directors, Key Managerial Personnel senion managementpersonnel and evaluation of their performance.

VI. ROLE OF THE COMMITTEE The role of the Committee inter alia is the following:

a) To formulate a criteria for determining qualifications, positive attributes and independence of aDirector.

b) Formulate criteria for evaluation of Independent Directors and the Board.c) Identify persons who are qualified to become Directors and who may be appointed in Senior Management

in accordance with the criteria laid down in this policy.d) To carry out evaluation of every Director’s performance.e) To recommend to the Board the appointment and removal of Directors and Senior

Management.f) To recommend to the Board, policy relating to remuneration for Directors, Key Managerial Personnel

and Senior Management.g) Ensure that level and composition of remuneration is reasonable and sufficient, relationship of

remuneration to performance is clear and meets appropriate performance benchmarks.h) To devise a policy on Board diversity.i) To carry out any other function as is mandated by the Board from time to time and/or enforced by any

statutory notification, amendment or modification, as may be applicable.j) To perform such other functions as may be necessary or appropriate for the

performance of its duties.

VII. MEMBERSHIP :a) The Committee shall comprise at least three (3) Directors, all of whom shall

be non-executive Directors and at least half shall be Independent.b) The Board shall reconstitute the Committee as and when required to comply with the provisions

of the Companies Act, 2013 and applicable statutory requirement.c) Minimum two (2) members shall constitute a quorum for the Committee

meeting.d) Membership of the Committee shall be disclosed in the Annual Report.e) Term of the Committee shall be continued unless terminated by the Board of Directors.

VIII. CHAIRMAN :a) Chairman of the Committee shall be an Independent Director.

35


b) Chairperson of the Company may be appointed as a member of the Committee but shall not Chairthe Committee.

c) In the absence of the Chairman, the members of the Committee present at the meeting shallchoose one amongst them to act as chairman.

d) Chairman of the Nomination and Remuneration Committee could be present at the Annual GeneralMeeting or may nominate some other member to answer the shareholders’ queries.

IX. FREQUENCY OF MEETINGS :

The meeting of the Committee shall be held at such regular intervals as may be circumstances exist.

X. COMMITTEE MEMBERS’ INTERESTS :

a) A member of the Committee is not entitled to be present when his or her own remuneration isdiscussed at a meeting or when his or her performance is being evaluated.

b) The Committee may invite such executives, as it considers appropriate, to be present at themeetings of the Committee.

XI. VOTING :

a) Matters arising for determination at Committee meetings shall be decided by a majority of votesof Members present and any such decision shall for all purposes be deemed a decision of theCommittee.

b) In the case of equality of votes, the Chairman of the meeting will have a casting vote.

XII. APPOINTMENT AND REMOVAL OF DIRECTOR AND KMP

Appointment criteria and qualifications :

a) The Committee shall identify and ascertain the integrity, qualification, expertise and experienceof the person for appointment as Director & KMP and recommend to the Board his/her appointment.

b) A person should possess adequate qualification, expertise and experience for the position he/she is considered for appointment. The Committee has discretion to decide whether qualification,expertise and experience possessed by a person are sufficient/satisfactory for the concernedposition.

c) The Company shall not appoint or continue the employment of any person as Managing Director/Whole-time Director/Manager who has attained the age of seventy years. Provided that the termof the person holding this position may be extended beyond the age of seventy years with theapproval of shareholders by passing a special resolution based on the explanatory statementannexed to the notice for such motion indicating the justification for extension of appointmentbeyond seventy years.

Term/Tenure :

a) Managing Director/Whole-time Director/Manager (Managerial Person) :

The Company shall appoint or re-appoint any person as its Managerial Person for a term notexceeding five years at a time. No re-appointment shall be made earlier than one yearbefore the expiry of term.

b) Independent Director:

An Independent Director shall hold office for a term up to two consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of aordinary resolution by the Company and disclosure of such appointment in the Board's report.No Independent Director shall hold office for more than two consecutive terms, butsuch Independent Director shall be eligible for appointment after expiry of twoyears of ceasing to become an Independent Director. Provided that an IndependentDirector shall not, during the said period of three years, be appointed in or beassociated with the Company in any other capacity, either directly or indirectly.

36


However, if a person who has already served as an Independent Director for 5 yearsor more in the Company as on October 01, 2014 or such other date as may bedetermined by the Committee as per regulatory requirement, he/she shall be eligiblefor appointment for one more term of 5 years only.

At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director does not serve as an IndependentDirector as well as Whole-time Director of a company.

Evaluation:

The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management atregular interval (yearly).

Removal:

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or underany other applicable Act, rules and regulations, the Committee may recommend, to the Board with reasonsrecorded in writing, removal of a Director, KMP or Senior Management subject to the provisions and complianceof the said Act, rules and regulations.

Retirement:

The Director, KMP and Senior Management shall retire as per the applicable provisions of the Companies Act,2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP,Senior Management in the same position/remuneration or otherwise even after attaining the retirement age,for the benefit of the Company.

XIII.PROVISIONS RELATING TO REMUNERATION OF MANAGERIAL PERSON, KMP AND SENIOR MANAGEMENT

1. General :

a) The remuneration/compensation/commission, etc., to Managerial Person, KMP andSenior Management Personnel will be determined by the Committee and recommendedto the Board for approval. The remuneration/compensation commission etc. shall be subject to theprior/post approval of the shareholders of the Company and Central Government, wherever required.

b) The remuneration and commission to be paid to Managerial Person shall be as per thestatutory provisions of the Companies Act, 2013, and the rules made thereunder forthe time being in force.

c) Increments to the existing remuneration/compensation structure may be recommended by theCommittee to the Board which should be within the slabs approved by the Shareholders in the case ofManagerial Person. Increments will be effective from the date of reappointment in respect of ManagerialPerson and 1st April in respect of other employees of the Company.

d) Where any insurance is taken by the Company on behalf of its Managerial Person, KMP and any otheremployees for indemnifying them against any liability, the premium paid on such insurance shall notbe treated as part of the remuneration payable to any such personnel. Provided that if any Directoris proved to be guilty, the premium paid on such insurance shall be treated as part of theremuneration.

2. Remuneration to Managerial Person, KMP and Senior Management:

a) Fixed pay:

Managerial Person, KMP and Senior Management shall be eligible for a monthly remuneration as may beapproved by the Board on the recommendation of the Committee in accordance with the statutory provisionsof the Companies Act, 2013, and the rules made thereunder for the time being in force. The break-up ofthe pay scale and quantum of perquisites, including employer’s contribution to P.F, pension scheme,medical expenses, etc., shall be decided and approved by the Board on the recommendation of theCommittee and approved by the shareholders and Central Government, wherever required.

37


b) Minimum Remuneration:

If, in any financial year, the Company has no profits or its profits are inadequate, the Company shallpay remuneration to its Managerial Person in accordance with the provisions of Schedule V of theCompanies Act, 2013 and if it is not able to comply with such provisions, with the prior approval of theCentral Government.

c) Provisions for excess remuneration:

If any Managerial Person draws or receives, directly or indirectly by way of remuneration any suchsums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction ofthe Central Government, where required, he/she shall refund such sums to the Company and untilsuch sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of suchsum refundable to it unless permitted by the Central Government.

3. Remuneration to Non-Executive/Independent Director:

a) Remuneration/Commission:

The remuneration/commission shall be in accordance with the statutory provisions of the CompaniesAct, 2013, and the rules made there under for the time being in force.

b) Sitting Fees:

The Non-Executive/Independent Director may receive remuneration by way of fees for attendingmeetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed themaximum amount as provided in the Companies Act, 2013 and Articles of Association of the company,per meeting of the Board or Committee or such amount as may be prescribed by the Central Governmentand approved by the Board from time to time.

c) Limit of Remuneration/Commission:

The company does not paid any commission to independent directors of the company.

d) Stock Options:

An Independent Director shall not be entitled to any stock option of the Company.

XIV. MINUTES OF COMMITTEE MEETING :

Proceedings of all meetings must be minuted and signed by the Chairman of the said meeting or theChairman of the next succeeding meeting. Minutes of the Committee meeting will be tabled at thesubsequent Board and Committee meeting.

XV. DEVIATIONS FROM THIS POLICY :

Deviations on elements of this policy in extraordinary circumstances, when deemed necessary in theinterests of the Company, will be made if there are specific reasons to do so subject to the approval ofthe Board.

38


Annexure-3

VIGIL MECHANISM (WHISTLE BLOWER POLICY) :

As part of our Corporate Governance practices, the Company has adopted the Whistleblower policy that coversour directors and employees.

The policy is provided herewith pursuant to Section 7 of the Companies (Meeting of the Board and its Powers)Rules, 2014.

1. INTRODUCTION :

Shri Prabhulingeshwar Sugars and Chemicals Limited (hereinafter referred to as (“the Company”) is committedto the highest standards of transparency, professionalism, legal compliance, honesty, integrity, ethical behavior,corporate governance and accountability in conducting its business. The Company is commited to developinga culture where it is safe for all directors and employees to raise concerns, grievances on various matterspertaining to any malpractice, fraud, violation of code of conduct, abuse of power or authority by any officialand misconduct.

An important aspect of transparency and accountability is a mechanism to enable employees of the Companyto voice their Protected Disclosures in a responsible and effective manner. It is a fundamental term of everycontract of employment with the Company that an employee will faithfully serve his or her employer and notdisclose confidential information about the employer’s business and affairs. Nevertheless, where an employeediscovers information which he/she believes to be a serious malpractice, impropriety, abuse or wrongdoingwithin the organization, especially at the higher levels, then he/she should be able to disclose or report thisinformation internally without fear of reprisal.

Section 7(1) of the Companies (Meetings of Board and its Powers) Rules, 2014 has been recently amendedwhich, interalia, provides for a mandatory requirement for all class of companies to establish a mechanismcalled 'Whistle Blower Policy' for employees to report to the management instances of unethical behaviour,actual or suspected, fraud or violation of the Company's Code of Business Conduct and Ethics policy.

Accordingly, this Whistle Blower Policy ("the Policy") has been formulated with a view to provide a mechanismfor employees of the Company to approach various Committees of the Company.

2. DEFINITIONS :

The definitions of some of the key terms used in this Policy are given below. Capitalized terms not definedherein shall have the meaning assigned to them under the Code.

(a) “Audit Committee”- means the Audit Committee constituted by the Board of Directors of the Company inaccordance withSection 177 of the Companies Act, 2013.

(b) “Alleged Wrongful Conduct”- wrongful conduct shall mean and includes, but not limited to:• Corporate Governance.• Related Party Transactions.• Misappropriation of funds.• Noncompliance to the law of the land or violation of law.• Concealing legal mandatory disclosures.• Breach of fiduciary responsibilities.• Infringement of Company Code of Conduct.• Breach of integrity and ethics policy.• Prohibitive Insider Trading Code of the Company.• Financial Irregularities.• Infringement and misuse of Intellectual Property.

(c) “Code”- means Company Code of Conduct.

(d) “Company means”- “Shri Prabhulingeshwar Sugars and Chemicals Limited”.

39


(e) “Employee”- Employee means every employee of the Company (whether working inIndia or abroad), permanent or temporary including the contracted employee andDirectors of the Company whether in the employment of the Company or not.

(f) “Protected Disclosure”- means any communication made in good faith that discloses ordemonstrates information that may evidence unethical or improper activity.

(g) “Subject” - means a person against or in relation to whom a Protected Disclosure has been made orevidence gathered during the course of an investigation.

(h) “Whistle Blower”- means an Employee making a Protected Disclosure under this Policy.

3. SCOPE OF THE POLICY :

(a) This policy covers all employees of Shri Prabhulingeshwar Sugars and Chemicals Limited.

(b) The Policy covers any ‘Wrongful Conduct’ and other malpractices which have taken place involving, butnot limited to:

• Any unlawful act, whether criminal or not.

• Breach of any Policy or Manual or Code of Conduct adopted by the Company.

• Abuse (e.g. through physical, psychological or financial abuse, exploitation or neglect).

• Fraud and corruption (e.g. to solicit or receive any gift/reward as a bribe).

• Any instance of failure to comply with legal or statutory obligation either on behalf of the Company or in any personal capacity in the course of discharging duties of the Company.

• Any kind of financial malpractice.

• Abuse of power (e.g. bullying/harassment).

• Negligence causing substantial and specific danger to public health and safety.

• Wastage/misappropriation of company funds/assets.

• Any other unethical or improper conduct.

(c) All employees of the Company are eligible to make Protected Disclosures under the Policy. The ProtectedDisclosures may bein relation to matters concerning the Company or any other subsidiaries but wedon’t have subsidiary company.

(d) This policy has been introduced by the Company to enable to raise their ProtectedDisclosures about any‘Alleged Wrongful Conduct’, malpractice, impropriety, abuse orwrong doing at any stage and in the right way, without fearof victimization, subsequentdiscrimination or disadvantage. However, employees are not to use this mechanism toquestion financial or business decisions taken by the Company Management or to reopenissues, which have already been addressed pursuant to disciplinary or other proceduresof the Company.

(e) The Whistle Blower's role is that of a reporting party with reliable information. They are not requiredor expected to act as investigators or finders of facts, nor would they determine the appropriate correctiveor remedial action that may be warranted in a given case.

(f) Whistle Blowers should not act on their own in conducting any investigative activities,nor do they have a right to participate in any investigative activities other than asrequested by the Committee Heads.

4. EFFECTIVE DATE OF POLICY :

This revised policy will be effective from April 1st 2014.

5. COMPANY GUARANTEES UNDER THE POLICY :

Protection :

(a) The Company, as a matter of policy, condemns any kind of discrimination, harassment, victimization or any other unfair employment practice being adopted against Whistle

40


Blowers. Complete protection shall be given to Whistle Blowers against any unfairpractice like retaliation, threat or intimidation of termination/suspension of service,disciplinary action, transfer, demotion, refusal of promotion, including any direct orindirect use of authority to obstruct the Whistle Blower's right to continue to performhis/her duties/functions including making further Protected Disclosure.

(b) The Company will take steps to minimize difficulties, which the Whistle Blower mayexperience as a result of making the Protected Disclosure. Employees who acted ingood faith, raise genuine Protected Disclosures under this policy will not beat risk oflosing their jobs or be subjected to any kind of harassment or pressure from theManagement.

Protected Disclosures are not published :

The Company will take appropriate action to protect the identity of employees who raise ProtectedDisclosures in good faith, unless forced by circumstances to reveal, in which case the employees will betaken into confidence and his interests adequately protected.

Any other Employee assisting in the said investigation shall also be protected to the same extent as theWhistle Blower.

Disqualifications :

(a) While it will be ensured that genuine Whistle Blowers are accorded complete protectionfrom any kind of unfair treatment as herein set out, any abuse of this protection will warrant disciplinaryaction.

(b) Protection under this Policy would not mean protection from disciplinary action arisingout of false or bogus allegations made by a Whistle Blower knowing it to be false or bogus or with a malafide intention.

(c) Whistle Blowers, who make three or more Protected Disclosures, which have beensubsequently found to be mala fide,frivolous, baseless, malicious, or reported otherwisethan in good faith, will be disqualified from reporting further Protected Disclosuresunder this Policy. In respect of such Whistle Blowers, the Company/Audit Committeewould reserve its right to take/recommend appropriate disciplinary action.

6. PROCEDURE FOR DISCLOSURE, ENQUIRY AND DISCIPLINARY ACTION :

How to disclose Protected Disclosures :

a) An employee intending to make any Protected Disclosure is required to disclose allrelevant information at the earliest from the day on which he knew of the ProtectedDisclosure.

b) Protected Disclosures should preferably be reported in writing, so as to ensure a clearunderstanding of the issues raised and should either be typed or written in a legiblehandwriting in English or in the regional language of the place of employment of theWhistle Blower.

c) The Protected Disclosure, if forwarded under a covering letter which shall bear the identity of theWhistle Blower. The Chairman of the Audit Committee shall detach the covering letter and discuss theProtected Disclosure with Members of the Committee.

d) The Whistle Blower must disclose his identity in the covering letter forwarding such Protected Disclosure.Anonymous disclosures will not be entertained by the Audit Committee as it would not be possible tointerview the Whistle Blowers.

e) Protected Disclosures should be factual and not speculative or in the nature of a conclusion, andshould contain as muchspecific information as possible to allow for proper assessment of the natureand extent of the concern and the urgencyof a preliminary investigative procedure.

41


To whom should Protected Disclosures be disclosed:

The Protected Disclosure should be disclosed through E-mail or fax, letter or any other method to theChairman of the Audit Committee as mentioned below.

Chairman of the Audit Committee Shri Prabhulingeshwar Sugars and Chemicals Limited

Registered Office:1st Floor, Sukrut Building,

Opp.K.C.Park Main Gate, P.B.Road,Dharwad – 580 008, Karnataka State

Tel: 08353 238004, 238200 and 0836 2745036Fax: 08353 238164 , E-mail:[email protected]

Investigation process:

(a) All Protected Disclosures reported under this Policy will be thoroughly investigated by the Chairman ofthe Audit Committee, who will investigate/oversee the investigations under the authorization of theAudit Committee. If anymember of the Audit Committee has a conflict of interest in any givencase, then he should recuse himself and the other members of the Audit Committee should deal withthe matter on hand.

(b) Chairman of the Audit Committee may at its discretion, consider involving anyInvestigators for the purpose of investigation.

(c) The decision to conduct an investigation taken by the Chairman of the Audit Committeeis by itself not an accusation and is to be treated as a neutral fact-finding process.The outcome of the investigation may not support the conclusion of theWhistle blowerthat an improper or unethical act was committed.

(d) The identity of a Subject will be kept confidential to the extent possible given the legitimate need oflaw and the investigation.

(e) Subject will normally be informed of the allegations at the outset of a formalinvestigation and have opportunities for providing their inputs during the investigation.

(f) Subject shall co-operate with the Chairman of the Audit Committee or any of theInvestigators during investigation to the extent that such co-operation will notcompromise self-incrimination protections available under the applicable laws.

(g) Subject has a right to consult with a person or persons of their choice, other thanthe Investigators and/or members of the Audit Committee and/or the Whistle blower.Subject shall be free at any time to engage counsel at their own cost to representthem in the investigation proceedings.

(h) Subject shall not interfere with the investigation.

(i) Evidence shall not be withheld, destroyed or tampered with, and witnesses shall notbe influenced, coached, threatened or intimidated by the Subject.

(j) Unless there are compelling reasons not to do so, subject will be given the opportunityto respond to material findings contained in an investigation report. No allegation ofwrong doing against a Subject shall be considered as maintainable unless there isgood evidence in support of the allegation.

(k) Subject has a right to be informed of the outcome of the investigation. If allegations are not sustained,the Subject should be consulted as to whether public disclosure of the investigation results would be inthe best interest of the Subject and the Company.

(l) The investigation shall be completed normally within 45 days of the receipt of theProtected Disclosure.

42


Appeal against the decision of the Audit Committee:

If the Complainant or the person complained against is not satisfied with the decision of the AuditCommittee, then either of the Parties could prefer an appeal against this decision before the Company’sBoard and the decision of the Board in the matter will be final and binding on all the parties in relationto the terms of employment. Appropriate appeal procedure may be formulated by the Board, ensuringprinciples of natural justice and the Subject shall have right of remedies under the law.

Untrue Allegations:

If employees make allegations in good faith, which is not confirmed by subsequent investigation, noaction will be taken against the disclosing employees. In making disclosures, employees should exercisedue care to ensure the accuracy of the information.

Maintaining confidentiality of the Protected Disclosure:

The employees disclosing the Protected Disclosure, as well as any of the persons to whom the ProtectedDisclosure has been disclosed or any of the persons who will be investigating or deciding on the investigation,as well as the members of the Audit Committee, shall not make public the Protected Disclosure disclosedexcept with the prior written permission of the Audit Committee. However, this restriction shall not beapplicable if any employee is called upon to disclose this issue by any judicial process and in accordancewith the laws of land.

7. COMPLAINTS OF RETALIATION AS A RESULT OF DISCLOSURE :

(a) If an employee believes that he/she has been retaliated against in the form of any adverse action fordisclosing a Protected Disclosure under this policy, he/she may file a written complaint to the AuditCommittee seeking redress.

(b) For the purposes of this policy, an adverse action shall include a disciplinary suspension, a decisionnot to promote, a decisionnot to grant a salary increase, a termination, demotion, rejection duringprobation, a performance evaluation in which the employee's performance is generally evaluated asunsatisfactory, a forced resignation or an unfavourable change in the general terms and conditions ofemployment.

Amendment :

The Company reserves its right to amend or modify this Policy in whole or in part, at any time withoutassigning any reason. However, no such amendment or modification will be binding on the employeesunless the same is notified to the employees.

43


Annexure-4Form No. MR-3

Secretarial Audit ReportFor the financial year ended 31st March 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules, 2014]

To,The Members,Shri Prabhulingeshwar Sugars and Chemicals LimitedCIN :U85110KA1995PLC017861Regd. Office:“Sukrut” Bldg., 1st FloorOpp. K C Park Main Gate, P. B. Road,Dharwad - 580 008.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherenceto good corporate practices by Shri Prabhulingeshwar Sugars and Chemicals Limited (the company). SecretarialAudit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the books, papers, minute books, forms and returns filed and other recordsmaintained by the company and also the information provided by the Company, its officers, agents and authorizedrepresentatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has,during the audit period covering the financial year ended on 31st March 2016 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board processes and compliance mechanismin place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained byShri Prabhulingeshwar Sugars and Chemicals Limited for the financial year ended on 31st March 2016 accordingto the provisions of :

1. The Companies Act, 2013 (the Act) and the rules made thereunder;

2. The Securities Contracts (Regulation) Act. 1956 (‘SCRA’) and the rules made thereunder;

3. As the entire shares of the company are held in physical form, the audit under the DepositoriesAct 1996 and the Regulations and Bye-Laws framed thereunder is not required.

4. As the company does not have Foreign Direct Investment, Overseas Direct Investment andExternal Commercial Borrowings, the audit under Foreign Exchange Management Act, 1999and the rules and regulations made thereunder is not required.

5. The following laws and Regulations and Guidelines prescribed under the Securities and ExchangeBoard of India Act, 1992 (‘SEBI Act’) are not applicable to the company as the company is anunlisted public company.

1) Regulations and Guidelines prescribed under the Securities and Exchange Board of IndiaAct, 1992 (‘SEBI Act’) :

44


a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations, 2015;

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations, 2009;

d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations, 2014;

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations, 2008;

f) The Securities and Exchange Board of India (Registrars to an Issue and Share TransferAgents) Regulations, 1993 regarding the Companies Act and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations, 2009;

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

6. Other Laws :

(a) Industry Specific laws :

(i) Sugar Cess Act, 1982

(ii) Levy Sugar Price Equalisation Fund Act, 1976

(iii) Food Safety And Standards Act, 2006

(iv) Essential Commodities Act, 1955

(v) Sugar Development Fund Act, 1982

(vi) Export (Quality Control and Inspection) Act, 1963

(vii) Agricultural and Processed Food Products Export Act, 1986

We have also examined compliance with the appicable claused of the following:

a. Secretarial Standards issued by The Institute of Company Secretaries of India.

b. As the company is an unlisted publice company, the provisions of Listing Agreement (nowthe SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015) are not applicableto the company.

We further state that, during the period under review and based on our verification of the records maintainedby the company and also on the review of compliance reports/statements by respective department heads/Chief Financial Officer/Company secretary taken on record by the Board of Directors of the company, in ouropinion, adequate systems and process and control mechanism exist in the company to monitor and ensurecompliances with applicable industry specific laws, labour laws, Intellectual property laws and environmentallaws.

We further report that, we have not reviewed the applicable financial laws direct and indirect tax laws sincethe same have been subject to review and audit by the Statutory Auditors of the company.

45


For M/s. Gopalakrishnaraj H. H. & AssociatesCompany Secretaries

Sd/-Gopalakrishnaraj H. H

ProprietorFCS: 5654; CP: 4152

We, further report that :

1) The Board of Directors of the Company is duly constituted with proper balance of ExecutiveDirectors, Non-Executive Directors and Independent Directors. The changes in the composition of theBoard of Directors that took place during the period under review were carried out in compliance with theprovisions of the Act.

2) Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes onagenda were sent at least seven days in advance, and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningful participationat the meeting.

3) Majority decision is carried through while the dissenting members’ views are captured and recorded aspart of the minutes.

We further report that during the audit period ;

a) the company has not issued any shares / debentures/sweat equity, etc.

b) the company had no preference shares, the company did not buy-back of securities.

c) the company has not taken any major decisions by the members in pursuance to section

180 of the Act.

d) there was merger / amalgamation / reconstruction, etc

e) there was no Foreign technical collaborations.

Place: BengaluruDate: 29/07/2016

46


For M/s. Gopalakrishnaraj H. H. & AssociatesCompany Secretaries

Sd/-Gopalakrishnaraj H. H

ProprietorFCS: 5654; CP: 4152

To,The Members,Shri Prabhulingeshwar Sugars and Chemicals LimitedCIN :U85110KA1995PLC017861Regd. Office:“Sukrut” Bldg., 1st FloorOpp. K C Park Main Gate, P. B. Road,Dharwad - 580 008.

Our report of even date is to be read along with this letter.

1) Mantenance of Secretarial records is the responsibility of the management of the Company.Our responsibility is to express an opinion on these secretarial records based on our audit.

2) We have followed the audit practices and processes as were appropriate to obtain reasonableassurance about the correctness of the contents of secretarial records. The verification wasdone on test basis to ensure that correct facts are reflected in secretarial records. Webelieve that the processes and practices, we follow provide a reasonable basis for ouropinion.

3) We have not verified the correctness and appropriateness of financial records and books ofaccounts of the Company.

4) Wherever required, we have obtained the management representation about the complianceof laws, rules and regulations and happening of events etc.

5) The compliance of the provision of corporate and other applicable laws, rules, regulations,standards is the responsibility of management. Our examination was limited to verificationof procedures on test basis.

6) The secretarial audit report is neither an assurance as to the future vaibility of the Companynor the efficiency or effectiveness with which the management has conducted the affairs ofthe company.

Annexure to our Secretarial Audit Report

Place: BengaluruDate: 29/07/2016

47


Annexure -5

Particulars of loans, guarantees or investments u/s 186 :

Details of Loans :

1. Date of Making the loan

2. Details of borrower

3. Amount

4. Rate of interest

5. Purpose for which the loan is to be utilised by the borrower

6. Time period for which it is given

7. Security

8. Date of Special resolution, if any.

9. Date of Board resolution

Details of Investments :

Note : ERR-Expected rate of return, DSR-Date of Special resolution, D B R- Date of Board

Resolution.

Details of Guarantee and/or security provided :

1. Date of providing Guarantee and/or security.

2. Details of recipient.

3. Amount

4. Purpose

5. Expected rate of return

6. Date of Special resolution, if any.

7. Date of Board resolution

Date

16-01-2016

05-11-2015

02-12-2015

Bagalkot DCCBank Ltd.,Jamkhandi

8,90,000/-Avail workingcapital loan

8% PerAnnum

2,50,000/-

6,00,000-

17,40,000/-Total :

Details Rs. Purpose E.R.R. D.S.R. D.B.R.

Avail termloan

Avail workingcapital loan

10% PerAnnum

8% PerAnnum

BasaveshwarCo-op Bank Ltd.,Bagalkot

Belgaum DCCBank Ltd.,Belgavi

NIL

Place : Siddapur

Date : 06-08-2016

By Order of the Board of DirectorsFor Shri Prabhulingeshwar Sugars

and Chemicals LimitedSd/-

Jagadeesh S. GudaguntiChairman & Managing Director

(DIN-00464873)

NIL

48


Annexure-6

Form No.AOC-2

PARTICULARS OF CONTRACTS/ARRANGEMENTS MADE WITH RELATED PARTIES(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and

Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 includingcertain arms-length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis:

There were no contracts or arrangements or transactions entered during the year endedMarch 31, 2016, which were not at arm’s length basis.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

The details of material contracts or arrangement or transaction at arms-length basis for theyear ended March 31, 2016 are ;

Name(s) of therelated party

Nature ofrelationship

Nature ofcontracts/

arrangements/transactions

Durationof

contracts

Salient terms ofthe contracts

Date ofapproval of

Board, ifany

Advances,if any

SiddapurDistilleriesLimited







Associate

Associate

Associate

Associate

Associate

Associate

Associate

Sale ofMolasses

Sale ofMolasses

Sale ofMolasses

Sale ofMolasses

Sale ofSteam

Sale ofPressmud

Purchase ofBiogas

June 2015

Dec. 2015

Jan. 2016

Feb. 2016

Apr. 2015to

Mar. 2016

Apr. 2015to

Mar. 2016

Apr. 2015to

Mar. 2016

9000 MT @Rs.5400/- per MT+ applicable tax

10,000 MT @Rs.4900/- per MT+applicable tax



39,703.75 tonn@Rs. 400/- pertonn+tax

43,471 Mt @ Rs.275/- per Mt+tax

28,78,597 M3 CubicQty. @ Rs. 4/- PerM3 Cubic Qty.

22.06.15

14.12.15

22.01.16

17.02.16

22.06.15

22.06.15

22.06.15

NIL

NIL

NIL

NIL

NIL

NIL

NIL

49


Annexure-7

DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO AS PER RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014.

A. CONSERVATION OF ENERGY :

1. Sulphur burners for sugar process are designed, fabricated and installed to achievewaste heat recovery. Hence high pressure steam used for the same has been divertedto generate more power export is increased.

2. Condensate flash heart recovery system has been designed, fabricated and installed.Hence loss of heat along with outgoing condensate is used to heat the juices, sosteam required to heat the juices are reduced saving the steam / bagasse.

3. Cooled condensate is used to cooling tower as make up. Previously fresh waters areused for the purpose, hence conservation of fresh water has achieved and excess hotcondensate water wastage is stopped.

4. Installed and commissioned the falling film evaporator for sugar processing. Due tohigh efficiency of vaporization of this equipment, the generated vapor temperaturesare more are useful for preceding evaporator bodies. This also reduces the steamconsumption for sugar process.

B. TECHNOLOGY ABSORPTION :

Training programs of factory workmen are in continuous process. Improving and refreshingthe knowledge of the working hands resulted better working qualities.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

D. POWER AND FUEL CONSUMPTION :

Particulars 2015-16 2014-15

Earnings (Third Party)

Outgo

Rs. 74,39,46,250/-

Nil

Rs. 34,08,19,100/-

Nil

Particulars Units (K Wh) Rate Rs.Per Unit Amount Rs.

Electricity Purchase

Diesel Consumption forDG Set

Own Generation of Powerthrough Steam Turbine

Consumption of Power forSugar Plant

Consumption of Power perQuintal of Sugar Production

14,66,500 Units(13,52,700 Units)

1,000 Ltrs(8,200 Ltrs)

10,88,89,000 Units(11,95,99,800 Units )

3,63,85,137 Units(3,38,95,495 Units)

21.38 Units(22.97 Units)

9.50/-

61.64/- Ltr.(61.95/- Ltr.)

-

-

-

1,39,31,750/-(1,28,50,650/-)

61,640/-(5,07,990/-)

-

-

-

(Previous year figures are indicated in brackets)

50


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OFSHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of SHRI PRABHULINGESHWAR SUGARSAND CHEMICALS LIMITED (“the company”), which comprise the Balance Sheet as at31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year thenended, and a summary of signigicant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements :

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of theCompanies Act, 2013 (“the Act”) with respect to the preparation and presentation of thesefinancial statements that give a true and fair view of the financial position, financial performanceand cash flows of the Company in accordance with the accounting principles generally acceptedin India, including the Accounting Standards specified under Section 133 of the Act.

This responsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the company and for preventingand detecting frauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and design,implementation and maintenance of adequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completeness of the accounting records, relevant tothe preparation and presentation of the financial statements that give a true and fair view andare free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards andmatters which are required to be included in the audit report under the provisions of the Act andthe Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatement of the financial statements, whether dueto fraud or error. In making those risk assessments, the auditor considers internal financialcontrol relevant to the Company’s preparation of the financial statements that give true and fairview, in order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company’s Directors, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion on the financial statements.

51


Opinion :

In our opinion and to the best of our information and according to the explanations given to us,the aforesaid financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the Company as at 31st March, 2016, its profit andits cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements :

1. As required by section 143(3) of the Act, we report that :

a) We have sought and obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the AccountingStandards prescribed under Section 133 of the Act.

e) On the basis of written representations received from the directors as on 31 March,2016, taken on record by the Board of Directors, none of the directors is disqualifiedas at 31 March, 2016, from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reportingof the Company and the operating effectiveness of such controls, refer to ourseparate Report in Annexure “A”.

g) With respect to the other matters to be included in the Auditor’s Report in accordancewith Rule-11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion andto the best of our information and according to the explanations given to us :

a) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements -Refer Note.28 of the financial statements.

b) The Company did not have any long-term contracts including derivativescontracts for which there were any material foreseeable losses.

c) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.


For M/s. NATARAJ & CO.Chartered Accountants

FRN 006442S

Sd/-(M.B. NATARAJ)

Proprietor (M. No. 202826)

52


ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ ofour report of even date) Report on the Internal Financial Controls Over Financial Reporting underClause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of SHRI PRABHULINGESHWARSUGARS & CHEMICALS LIMITED (“the Company”) as of March 31, 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls :

The Company’s management is responsible for establishing and maintaining internal financialcontrols based on “the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountantsof India”. These responsibilities include the design, implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly and efficientconduct of its business, including adherence to Company’s policies, the safeguarding of itsassets, the prevention and detection of frauds and errors, the accuracy and completeness of theaccounting records, and the timely preparation of reliable financial information, as requiredunder the Companies Act, 2013.

Auditor’s Responsibility :

Our responsibility is to express an opinion on the Company’s internal financial controls overfinancial reporting based on our audit. We conducted our audit in accordance with the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”)issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribedunder Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of theinternal financial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor’s judgement, includingthe assessment of the risks of material misstatement of the financial statements, whether dueto fraud or error.

53


We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion on the Company’s internal financial controls system over financialreporting.

Meaning of Internal Financial Controls Over Financial Reporting :

A company’s internal financial control over financial reporting is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal financial control over financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparationof financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only in accordance with authorisationsof management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition, use, or disposition of the company’sassets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting :

Because of the inherent limitations of internal financial controls over financial reporting, includingthe possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projections of any evaluation of theinternal financial controls over financial reporting to future periods are subject to the risk thatthe internal financial control over financial reporting may become inadequate because of changesin conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion :In our opinion, to the best of our information and according to the explanations given to us, theCompany has, in all material respects, an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting were operatingeffectively as at March 31, 2016, based on “the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India”.



FRN 006442S

Sd/-(M.B. NATARAJ)


54


ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’section of our report of even date)

i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of the fixed assets on the basis of available information.

(b) As explained to us, fixed assets have been physically verified by the managementduring the year in accordance with the phased programme of verification adopted bythe management which, in our opinion, provides for physical verification of all thefixed assets at reasonable intervals. In accordance with this programme certain fixedasset were verified during the year and no material discrepancies were noted.

(c) The title deeds of all the immovable properties of the Company shown under theFixed Assets schedule are held in the name of Company.

(ii) The inventories have been physically verified by the management at reasonable intervalsduring the year. In our opinion, the frequency of such verification is reasonable and nomaterial discrepancies were noticed at the time of verification.

(iii) The company has not granted loans, secured or unsecured, to companies, firms, LLP’sor other parties covered in the register maintained U/s. 189 of the Act.

(iv) The company has not given any given loans / investments / guarantees to which theprovisions of S. 185 and S.186 of the Act apply.

(v) The company has not accepted any deposits to which the provision of Sec. 73 to 76 orany other relevant provisions of the Act and the rules framed there under and thedirections issued by the RBI are applicable. Therefore, the provisions of Clause (v) ofparagraph 3 of the CARO 2016 are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the company pursuantto the Rules made by the Central Government for the maintenance of cost records U/s. 148 of the Act, and are of the opinion that prima facie, the prescribed accounts andrecords have been made and maintained. We have, however, not made a detailedexamination of the cost records with a view to determine whether they are accurateor complete.

(vii) According to the information and explanations given to us in respect of statutory dues:

55


(a) The Company has generally been regular in depositing undisputed statutory dues,including Provident Fund, employees state insurance (ESI), Investor Educationand Protection Fund, Income-tax, Tax deducted at source, Tax collected at source,Professional Tax, Sales Tax, Value Added Tax (VAT), Wealth Tax, Service Tax,Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it,with the appropriate authorities. According to the records of the company andinformation and explanations given to us, no undisputed statutory dues payable inrespect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Sales Tax, VAT, Cessand other material statutory dues were in arrears, as at 31st March 2016 for aperiod of more than six months from the date they become payable.

(b) Details of dues of Excise Duty, Service Tax, Income-tax and Sales Tax matterswhich have not been deposited as on March 31, 2016 by the Company on accountof disputes are given below :

56


(viii) In our opinion and according to the information and explanations given to us, the Companyhas not defaulted in the repayment of dues to banks and financial institutions. The Companyhas neither taken any loans or borrowings from government nor has issued any debenturesduring the year.

(ix) The Company has not raised any moneys by way of Initial Public Offer / Further Public Offerduring the Year. In our opinion, the moneys raised by way of Term Loans during the yearwere applied for the purposes for which those are raised.

(x) To the best of our knowledge and according to the information and explanations given to us,no fraud by the Company and no fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Companyhas paid/provided managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act,2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO2016 Order is not applicable.

57


(xiii) In our opinion and according to the information and explanations given to us the Companyis in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable,for all transactions with the related parties and the details of related party transactionshave been disclosed in the financial statements etc. as required by the applicable accountingstandards.

(xiv) During the year, the Company has not made any preferential allotment or private placementof shares or fully or partly convertible debentures and hence reporting under clause (xiv) ofCARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during theyear the Company has not entered into any non-cash transactions with its directors orpersons connected with him and hence provisions of section 192 of the Companies Act,2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank ofIndia Act, 1934.



FRN 006442S

Sd/-(M.B. NATARAJ)


58


12

3456

78910

11

12

1314

15161718

I.

1.

2.

3.

II.1.

2.

Sl.No. Particulars Note No. As at 31-03-2016 As at 31-03-2015

EQUITY AND LIABILITIES :

Shareholders Funds(a) Share Capital(b) Reserves and Surplus

Non-Current Liabilities(a) Long-Term Borrowings(b) Deferred Tax Liabilities (Net)(c) Other Long Term Liabilities(d) Long-Term Provisions

Current Liabilities

(a) Short-Term Borrowings

(b) Trade Payables

(c) Other Current Liabilities

(d) Short-Term Provisions

TOTAL :ASSETS :Non-Current Assets

(a) Fixed Assets(i) Tangible Assets(ii) Capital Work-in-progress

(b) Non-Current Investments(c) Long-Term Loans and Advances(d) Other Non-Current Assets

Current Assets(a) Inventories

(b) Trade Receivables

(c) Cash and Bank Balances

(d) Short-Term Loans and Advances

TOTAL :

(Amount in )

The Notes form an integral part of these financial statementsPlace : SiddapurDate : 06-08-2016

*As per our report of even dateattached*

For NATARAJ & CO.,FRN 006442S

CHARTERED ACCOUNTANTS

Sd/-(M.B.NATARAJ)

Proprietor(M.No. 202826)

For SHRI PRABHULINGESHWAR SUGARS & CHEMICALS LIMITED.,

Sd/-J. S. Gudagunti

Chairman & Managing Director(DIN - 00464873)

Sd/-R. S. Gudagunti

Executive Director(DIN - 00464952)

Sd/-N. G . Sanadi

Director(DIN - 00666766)

Sd/-Mahendra B.H.

CS Cum. GM (F&A)

Sd/-R.P. Hiremath

Sr. Manager (F&A)

Sd/-M.C. Koti

Independent Director(DIN - 05203944)


46,61,85,950(10,88,24,191)

44,59,70,0009,81,49,793

05,74,54,162

189,60,22,312200,02,91,2218,57,025,1913,30,88,562

574,53,63,000

217,07,06,73423,90,09,4562,74,89,5002,03,87,8654,05,43,777

251,59,31,07120,43,30,57814,33,54,37038,36,09,649

574,53,63,000

46,61,85,950(13,18,56,011)

61,29,15,00011,31,98,699

05,03,48,950

133,26,24,000247,88,26,43742,63,25,7583,82,95,988

538,68,64,771

222,34,63,9157,50,61,2452,57,49,5001,25,07,7754,17,81,615

232,07,09,44511,65,71,54710,00,34,48147,09,85,248

538,68,64,771

SHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITED, DHARWADBALANCE SHEET AS AT MARCH 31, 2016

59


(Amount in )

19

20

21

2223241125

I

II

III

IV

V

VI

Sl.No. Particulars Note No. Year ended 31-03-2016 Year ended 31-03-2015

Income :Revenue from OperationsLess : Excise Duty

Other Income

Total Revenue :

Expenses :Cost of Materials ConsumedChanges in Inventories of Finished Goods,Work-in-progress and Stock-in-TradeEmployee Benefits ExpensesFinance CostsDepreciation and Amortisation ExpensesOther Expenses

Total Expenses :

Profit Before Tax (I-II)

Tax Expense :

Current TaxDeferred Tax

Profit/(Loss) for the Year (III-IV)

Earnings Per Equity Share :(i) Basic(ii) Diluted

The Notes form an integral part of these financial statements

421,46,76,45516,19,50,319

405,27,26,136

99,03,717

406,26,29,853

338,88,38,656

(17,22,45,028)17,20,65,35329,83,13,16311,67,17,89124,90,77,673

405,27,67,708

98,62,145

18,79,232(1,50,48,906)

2,30,31,820

0.490.49

387,66,68,91014,16,81,256

373,49,87,654

1,47,00,728

374,96,88,382

339,16,17,202

(48,50,51,044)16,88,23,58231,09,59,67011,41,91,81334,12,12,770

384,17,53,993

(9,20,65,611)

01,69,21,766

(7,51,43,845)

(1.61)(1.61)

SHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITED, DHARWADSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016





Sd/-(M.B.NATARAJ)



Sd/-J. S. Gudagunti


Sd/-R. S. Gudagunti


Sd/-N. G . Sanadi


Sd/-Mahendra B.H.

CS Cum. GM (F&A)

Sd/-R.P. Hiremath

Sr. Manager (F&A)

Sd/-M.C. Koti



60


Year ended 31-03-2016 Year ended 31-03-2015CASH FLOWS FROM OPERATING ACTIVITIESNet profit before TaxAdjustments for :Depreciation

Profit/Loss on Sale of Asset/Impairment of AssetsInterest IncomeDividend IncomeFinancial ExpensesOperating cash profit before working capital changesAdjustments for :Decrease / (Increase) in Trade ReceivablesDecrease / (Increase) in inventoriesDecrease / (Increase) in Loans & Advances(Decrease) / Increase in current liabilities

Cash generated from operationsLess : Taxes PaidNet cash flow from operating activities (A)CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assetsInvestment in SharesProceeds from sale of assetInterest ReceivedDividend Received

Net cash flow from investing activities (B)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issuance of Equity Share Capital

Proceeds from long-term borrowings (Net)

Proceeds from Working Capital Borrowings (Net)

Proceeds from short-term borrowings (Net)

Repayment of Preference Share Capital

Financial Expenses

Dividend and Dividend Tax of Previous Year

Net cash used in financing activities (C)Cash flow from Investing & Financing Activities (B+C) (D)Net increase / (decrease) in cash and cash equivalents (A-D)Add : Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the close of the year

(Amount in )

11,67,17,891

98,62,145

41,24,34,76142,22,96,906

(37,32,55,832)4,90,41,074

-4,90,41,074

(22,70,52,628)(22,70,52,628)

22,13,31,44322,13,31,443(57,21,185)4,33,19,88910,00,34,48114,33,54,370

(9,20,65,611)

41,48,51,19132,27,85,580

18,86,39,48951,14,25,069

85,00,00050,29,25,069

(10,94,93,097)(10,94,93,097)

(42,15,97,244)(42,15,97,244)(53,10,90,341)(2,81,65,272)12,81,99,75310,00,34,481

11,41,91,813

14,611(7,79,849)

(18,31,055)29,83,13,163

(8,77,59,031)(19,52,21,626)

8,07,33,347(17,10,08,522)

(22,82,39,911)(17,40,000)

3,16,3797,79,849

18,31,055

--

(16,69,45,000)71,34,00,020(2,68,10,414)

- -(29,83,13,163)

--

(675)(91,16,650)(11,82,967)

31,09,59,670

10,22,37,698(44,19,51,951)(18,30,61,722)71,14,15,464

(13,09,48,674)1,01,60,700

9,95,26091,16,65011,82,967

- -

(25,38,01,675)(7,24,94,000)21,56,58,101

- -(31,09,59,670)

- -


SHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITED, DHARWADCASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016





Sd/-(M.B.NATARAJ)



Sd/-J. S. Gudagunti


Sd/-R. S. Gudagunti


Sd/-N. G . Sanadi


Sd/-Mahendra B.H.

CS Cum. GM (F&A)

Sd/-R.P. Hiremath

Sr. Manager (F&A)

Sd/-M.C. Koti



61


As at31-03-2016

Authorised

5,00,00,000 (Previous year 5,00,00,000) Equity Shares of Rs. 10/- each

1,00,00,000 (Previous Year 1,00,00,000) 13% Non-Cumulative Redeemable Prefer-ence Shares of Rs.10/- each

Issued, Subscribed & Paid up

4,66,18,595 (Previous Year 4,66,18,595) Equity Shares of Rs.10/-each fully paid-up

Nil (Previous Year Nil) 13% Non-cumulative Redeemable Preference Shares of Rs. 10/- each fully paid-up

Total :

As at 31st March 2016


(Amount in )NOTE 1 - SHARE CAPITAL

Particulars

Equity SharesParticulars

Number Amount Number Amount

Shares outstanding at the beginning of the year

Shares issued during the year

Shares outstanding at the end of the year

Terms/rights attached to Equity Shares :

• The Company has only one class of Equity Shares having a par value of Rs. 10/- per Share.

• Each holder of Equity Shares is entitled to one vote per Share.

• The Company declares and pays dividends in Indian Rupees.

• The dividend proposed by the Board of Directors is subject to the approval of the Share holders in theensuing Annual General Meeting.

• In the event of liquidation of the Company, the Equity Shareholders are eligible to receive the remainingassets of the Company, after distribution of all Preferential amounts. The distribution will be in proportionof their Shareholding.

Name of the Share HolderNo. of Shares Held % of Holding

1. Shri Jagadeesh S. Gudagunti (Individual & H.U.F.)

2. Siddapur Distilleries Limited

50,00,00,000

10,00,00,000

60,00,00,000

46,61,85,950

--

46,61,85,950

50,00,00,000

10,00,00,000

60,00,00,000

46,61,85,950

--

46,61,85,950

4,66,18,595

--

4,66,18,595

46,61,85,950

--

46,61,85,950

4,66,18,595

--

4,66,18,595

46,61,85,950

--

46,61,85,950

1,25,62,334

91,91,800

26.95

19.72

1,24,62,334

91,91,800

26.73

19.72


As at31-03-2015



No. of Shares Held % of Holding

Sl.No.

62


1

2

S.N. Nature of Security Terms of Repayment

Term Loan from Belgaum DCC Bank Ltd, Belgaum, amountingto Rs. 2100.00 Lakhs under scheme for Extending FinancialAssistance to Sugar Undertakings, 2014 is secured by (I) paripassu 1st charge on Sugar Plant. (II) Jointly and severally,irrevocable an Personal Guarantee of all Directors.

Repayable in 36 monthly installments com-mencing from March 2016. Last installmentsdue in February 2019.# Rate of interest (floating) : 13.00% PerAnnum.

Term Loan from Bagalkot DCC Bank Ltd, Bagalkot, amountingto Rs. 1378.20 Lakhs under scheme for Extending FinancialAssistance to Sugar Undertakings, 2014, is secured by (I)Charges on the Fixed Assets of the factory. (II) Personal Guar-antee of Promoters / Directors

Repayable in 36 monthly installments com-mencing from March 2016. Last installmentdue in February 2019.# Rate of interest (floating) : 13.50% PerAnnum.

NOTE 2 - RESERVES & SURPLUS

a) Capital Redemption Reserve

Opening Balance

(+) Current Year Transfer

Closing Balance

b) Surplus

Opening Balance

(+) Net Profit / (Loss) for the year

Closing Balance

Total :

NOTE 3 - LONG TERM BORROWINGS

Secured

(a) Term Loans

From Banks

Total :

(Amount in )

(Amount in )

Particulars

Particulars

2,35,97,870

- -

2,35,97,870

(15,54,53,881)

23,031,820

(13,24,22,061)

(10,88,24,191)

2,35,97,870

- -

2,35,97,870

(8,03,10,036)

(7,51,43,845)

(15,54,53,881)

(13,18,56,011)

44,59,70,000

44,59,70,000

61,29,15,000

61,29,15,000

As at31st Marth 2015

As at31st March 2016

As at31st Marth 2015

As at31st March 2016

Nature of Security and Terms of Repayment for Long Term secured borrowings :

63


3

S.N. Nature of Security Terms of Repayment

Term Loan from Belgaum DCC, Belgaum, amounting to Rs.3446.19 Lakhs is secured by (I) pari passu 1st charge on allthe movable and immovable proprietes of the company , bothpresent & future (II) Jointly & Severally, Irrevocable and Per-sonal Guarantee of Directors.

Repayable in 55 monthly installments com-mencing from January 2015. Last install-ment due in July 2019.# Rate of interest (floating) : 13.50 % PerAnnum.

Note :# Entitled for Interest subvention from Sugar Development Fund @ 12.00% p.a.

As at31 March 2016

NOTE 4 - DEFERRED TAX LIABILITIES (NET)

-

-

-

a) Deferred Tax Liability on account of

i) Depreciation

b) Deferred Tax Asset on account of

i) Unabsorbded depreciation

ii) Provisions and expenses disallowable under Income Tax Act but allowable on payment basis

Total (b) :

c) Deferred Tax Liability Net

NOTE 5 - OTHER LONG TERM LIABILITIES

(a) Deferred Purchase Tax on Sugarcane

(b) Interest accrued but not due on borrowings

Total :

(Amount in )

(Amount in )

Particulars

Particulars

-

-

-

33,82,96,462

23,71,36,605

30,10,064

24,01,46,669

9,81,49,793

32,25,40,837

20,34,19,392

59,22,746

20,93,42,138

11,31,98,699

4 Term Loan from Shri Basaveshwar Sahakari Bank Niyamita,Bagalkot amounting to Rs. 500.00 Lakhs is secured by (I) paripassu 2nd charge on Plant & Machinery of the Factory. (II)Personal Guarantee of Directors.

Repayable in 72 monthly installments com-mencing from November 2015. Last install-ment due in October 2021.# Rate of interest (floating) : 13.50 % PerAnnum.

As at31 March 2015

As at31 March 2016

As at31 March 2015

NOTE 6 - LONG TERM PROVISIONS

(a) Provision for Employee Benefits

(i) Gratuity

(ii) Leave Encashment

Total :

(Amount in )

Particulars

3,92,56,582

1,81,97,580

5,74,54,162

3,36,43,865

1,67,05,085

5,03,48,950

As at31 March 2016

As at31 March 2015

64


NOTE 7 - SHORT TERM BORROWINGS

Secured

(a) Working Capital Loan

From Banks

(Secured by pledge of sugar and hypothecation of inventories ofstore materials) Refer Note no. 28

From other parties

(Secured by pledge of sugar) Refer Note no. 28

Sub Total :

(b) Basaldose loan

From Banks

(Basaldose Loan from banks are secured by secondary chargeon Assets of the Company & Personal Guarantee of Core promotors)

Sub Total :

Total :

(Amount in )

Particulars

126,50,00,000

53,10,24,020

179,60,24,020

9,99,98,292

9,99,98,292

189,60,22,312

68,26,24,000

40,00,00,000

108,26,24,000

25,00,00,000

25,00,00,000

133,26,24,000

As at31 March 2016

As at31 March 2015

Particulars

(i) Total outstanding dues to Micro & Small Enterprises

(ii) Trade Payables

Total :

NOTE 8 - TRADE PAYABLES(Amount in )

7,84,618

199,95,06,603

200,02,91,221

31,76,856

247,56,49,581

247,88,26,437

As at31 March 2016

As at31 March 2015

65


NOTE 9 - OTHER CURRENT LIABILITIES

(a) Current maturities of long-term debt

(b) Interest accrued and due on borrowings

(c) Interest accrued but not due on borrowings

(d) Other Payables

(i) Deffered Purchase Tax on Sugar Cane

(ii) Others

Total :

(Amount in )

Particulars

NOTE 10 - SHORT TERM PROVISIONS

(a) Provision for Employee Benefits

Salary & Reimbursements

Contribution to PF

Gratuity

Leave Encashment

Bonus, Ex-Gratia & Insurance

(b) Other Payables

Provision for UI, Power Import Charges

Total :

(Amount in )

Particulars

20,38,08,000

-

1,14,45,904

18,59,78,596

45,57,92,691

85,70,25,191

8,06,16,707

-

4,09,50,141

18,59,78,596

11,87,80,314

42,63,25,758

96,35,015

20,70,582

39,61,207

23,55,929

1,50,65,829

- -

3,30,88,562

92,80,740

20,11,050

34,45,822

22,86,478

1,13,11,432

99,60,466

3,82,95,988

As at31 March 2016

As at31 March 2015

As at31 March 2016

As at31 March 2015

66


5,80

,98,

826

21,5

9,99

,277

27,0

4,84

,828

30,7

0,40

4

281,

76,3

2,77

7

2,80

,49,

830

83,0

5,22

0

6,25

,41,

220

85,7

4,30

5

1,01

,98,

544

1,28

,73,

888

349,

58,2

9,11

9

- -

2,36

,662

-

5,69

,70,

534

31,2

6,62

4

14,8

6,63

0 -

4,01

,701

11,5

2,31

2

9,17

,237

6,42

,91,

700

- - - - -

3,35

,908

- - - - -

3,35

,908

5,80

,98,

826

21,5

9,99

,277

27,0

7,21

,490

30,7

0,40

4

287,

46,0

3,31

1

3,08

,40,

546

97,9

1,85

0

6,25

,41,

220

89,7

6,00

6

1,13

,50,

856

1,37

,91,

125

355,

97,8

4,91

1

--

5,35

,12,

832

4,36

,51,

145

30,7

0,40

4

110,

55,6

8,87

3

82,8

7,90

7

47,7

9,35

8

3,00

,21,

235

35,9

1,96

7

76,0

0,37

2

1,22

,81,

111

127,

23,6

5,20

4

-

67,1

1,17

0

1,03

,47,

545 -

8,55

,54,

663

37,5

4,72

9

6,77

,490

76,5

6,27

5

6,11

,597

10,3

1,13

9

3,73

,283

11,6

7,17

,891

-

6,02

,24,

002

5,39

,98,

690

30,7

0,40

4

119,

11,2

3,53

6

1,20

,37,

718

54,5

6,84

8

3,76

,77,

510

42,0

3,56

4

86,3

1,51

1

1,26

,54,

394

138,

90,7

8,17

7

SHRI

PRA

BHU

LIN

GES

HW

AR

SUG

ARS

AN

D C

HEM

ICA

LS L

IMIT

ED.,

DH

ARW

AD

.

NO

TE 1

1 -

FIXE

D A

SSET

S

Dep

reci

atio

n

Tang

ible

Ass

ets

Land

Fact

ory

Build

ings

Oth

er B

uild

ings

Tem

pora

ry S

heds

Plan

t &

Mac

hine

ry

Vehi

cles

Trac

tors

Cane

Har

vest

ing

Mac

hine

Furn

itur

e &

Fix

ture

s

Off

ice

Equi

pmen

ts

Dat

a Pr

oces

sing

Mac

hine

s

To

tal :

5,80

,98,

826

15,5

7,75

,275

21,6

7,22

,800 -

168,

34,7

9,77

5

1,88

,02,

828

43,3

5,00

2

2,48

,63,

710

47,7

2,44

2

27,1

9,34

5

11,3

6,73

1

217,

07,0

6,73

4

5,80

,98,

826

16,2

4,86

,445

22,6

8,33

,683

-

171,

20,6

3,90

4

1,97

,61,

923

35,2

5,86

2

3,25

,19,

985

49,8

2,33

8

25,9

8,17

2

5,92

,777

222,

34,6

3,91

5

Net

Blo

ck

(Am

ount

in

)

Del

etio

ns

4,91

8

4,91

8

7,50

,61,

245

7,50

,61,

245

22,1

1,55

,407

22,1

1,55

,407

5,72

,07,

196

5,72

,07,

196

Capi

tal W

ork

in P

rogr

ess

Tota

l :

23,9

0,09

,456

23,9

0,09

,456

23,9

0,09

,456

23,9

0,09

,456

7,50

,61,

245

7,50

,61,

245

66

I. 1 2 3 4 5 6 7 8 9 10 11

PRAB

HU S

UGAR

PRAB

HU P

OWER

As

at31

-03-

2015

Sl.

No.

Part

icul

ars

As a

t31

-03-

2015

Add

itio

nsDe

leti

ons

Gro

ss B

lock

Impa

ir-me

nt

As

at31

-03-

2016

Upt

o31

-03-

2015

For

the

Year

Upt

o31

-03-

2016

As

at31

-03-

2016

67


--

234,79,84,207

11,03,90,039

5,43,33,460

32,23,365

251,59,31,071

2,73,02,501

215,92,31,738

8,56,69,899

4,35,38,400

49,66,907

232,07,09,445

NOTE 15 - INVENTORIES

a) Work-in-Progress

b) Finished Goods

c) Stores and Spares

d) Baggase

e) Chemicals

Total :

(Amount in )

Particulars

2,74,79,500

10,000

2,74,89,500

(Amount in )NOTE 12 - NON CURRENT INVESTMENTS

Other Investments

Unquoted (Valued at cost)

a) In Equity shares of

i) Co-op Banks

ii) Souhard Credit Co-Op Ltd

Total :

Particulars

2,03,87,865

2,03,87,865

(Amount in )

NOTE 13 - LONG TERM LOANS AND ADVANCES

a) Security Deposits

Unsecured, considered good

Total :

Particulars

1,25,07,775

1,25,07,775

4,05,43,777

4,05,43,777

(Amount in )NOTE 14 - OTHER NON CURRENT ASSETS

Balance with Revenue Authorities

Total :

Particulars

4,17,81,615

4,17,81,615

2,57,39,500

10,000

2,57,49,500

As at31 March 2016

As at31 March 2015

As at31 March 2016

As at31 March 2015

As at31 March 2016

As at31 March 2015

As at31 March 2016

As at31 March 2015

68


31 March 2016 31 March 2015

413,24,20,215

8,22,56,240

421,46,76,455

16,19,50,319

405,27,26,136

NOTE 19 - REVENUE FROM OPERATIONS

a) Sale of Products

b) Other Operating Revenues

Revenue from Operations (Gross)

Less : Excise duty

Revenue from Operations (Net)

(Amount in )

Particulars

383,55,75,584

4,10,93,326

387,66,68,910

14,16,81,256

373,49,87,654

13,83,11,996

3,14,291

47,28,083

14,33,54,370

9,49,29,287

2,93,320

48,11,874

10,00,34,481

38,36,09,649

38,36,09,649

47,09,85,248

47,09,85,248

NOTE 17 - CASH AND BANK BALANCES

(i) Cash and Cash Equivalentsa) Balances with banksb) Cash on hand

(ii) Other Bank Balances

Unclaimed Dividend Account

Total :

NOTE 18 - SHORT-TERM LOANS AND ADVANCES

a) Other Current AssetsUnsecured, considered good

Total :

(Amount in )

(Amount in )

Particulars

Particulars

19,61,26,581

19,61,26,581

82,03,99782,03,997

20,43,30,578

10,35,97,256

10,35,97,256

1,29,74,2911,29,74,291

11,65,71,547

NOTE 16 - TRADE RECEIVABLES

Trade receivables outstanding for a period less than six months fromthe date they are due for paymentUnsecured, considered good

Trade receivables outstanding for a period exceeding six months fromthe date they are due for paymentUnsecured, considered good

Total :

(Amount in )

ParticularsAs at

31 March 2016As at

31 March 2015

As at31 March 2016

As at31 March 2015

As at31 March 2016

As at31 March 2015

69


31 March 2016

49,66,907

338,70,95,114

339,20,62,021

32,23,365

338,88,38,656

44,72,998

339,21,11,111

339,65,84,109

49,66,907

339,16,17,202

NOTE 21 - COST OF MATERIALS CONSUMED(Amount in )

Raw Material

Opening Stock

Add : Purchases

Less : Closing Stock

Total :

Particulars

31 March 2016 31 March 2015

7,79,849

18,31,055

3,77,407

69,15,406

99,03,717

91,16,650

11,82,967

2,79,300

41,21,811

1,47,00,728

NOTE 20 - OTHER INCOME(Amount in )

Particulars

Interest Income

Dividend Income

Insurance Claim Received

Other non-operating income

Total :

31 March 2016 31 March 2015

278,37,98,793

74,39,46,250

24,83,47,911

1,58,81,501

379,19,74,455

31,70,37,064

1,19,54,525

1,14,54,171

34,04,45,760

413,24,20,215

8,22,56,240

8,22,56,240

421,46,76,455

Details of Sale of Products & Other Operating Revenues :

a) Sale of Products

i) Manufactured Goods

Sugar Domestic

Sugar Export (Export through third party)

Power

Steam

Sub Total (A)

ii) By products

Molasses

Press Mud

Bagasse

Sub Total (B)

Total (A)+(B)

b) Other Operating Revenues

Incentive from Export of Raw Sugar & Production Subsidy

Total (C)

Total (A)+(B)+(C)

(Amount in )

Particulars

289,49,35,551

34,08,19,100

34,05,36,429

1,34,47,685

358,97,38,765

23,46,17,544

1,12,19,275

0

24,58,36,819

383,55,75,584

4,10,93,326

4,10,93,326

387,66,68,910

31 March 2015

70


31 March 2016 31 March 2015

14,86,21,430

1,22,75,171

74,84,068

22,57,239

7,80,162

6,47,283

17,20,65,353

13,86,41,654

98,92,727

1,41,43,347

50,24,115

4,84,680

6,37,059

16,88,23,582

(Amount in )

Salaries and Incentives

Employer’s Contribution to Provident Fund

Gratuity

Leave Encashment

Employee Deposit Linked Insurance

Staff welfare expenses

Total :

Particulars

NOTE 23 - EMPLOYEE BENEFITS EXPENSE

31 March 2016 31 March 2015

31 March 2016 31 March 2015

335,05,34,602

3,83,04,054

338,88,38,656

335,07,73,028

4,08,44,174

339,16,17,202

215,92,31,738

2,73,02,501

4,35,38,400

234,79,84,207

0

5,43,33,460

(17,22,45,028)

169,61,36,001

2,51,42,154

2,37,43,440

215,92,31,738

2,73,02,501

4,35,38,400

(48,50,51,044)

(Amount in )

Particulars

Sugar Cane

Chemicals

Total :

Details of Raw Material Consumed :

NOTE 22 - CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS(Amount in )

Opening Stock

Finished Goods and By Products

Work in Process

Stock of Bagasse

Less : Closing Stock

Finished Goods and By Products

Work in Process

Stock of Bagasse

Total :

Particulars

31 March 2016 31 March 2015

29,30,22,277

52,90,886

29,83,13,163

30,37,32,180

72,27,490

31,09,59,670

(Amount in )

Particulars

Interest

Bank Charges

Total :

NOTE 24 - FINANCE COSTS

71


31 March 2016 31 March 2015

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

5,41,24,058

5,07,38,778

5,74,60,545

19,67,177

1,28,98,670

2,02,38,373

81,88,480

20,06,532

17,40,000

6,23,449

26,14,500

56,08,036

15,91,220

17,76,797

90,56,346

79,81,207

23,79,978

2,92,000

1,08,000

26,569

14,611

18,76,916

55,02,789

2,62,642

24,90,77,673

14,08,64,252

4,14,89,160

7,32,70,168

22,02,729

2,13,22,058

1,60,08,260

78,58,343

26,73,590

16,00,000

9,69,223

14,18,500

26,32,421

15,26,901

16,84,140

61,81,354

98,29,231

22,55,552

3,17,000

1,08,000

20,000

2,42,945

18,47,241

48,03,587

88,115

34,12,12,770

NOTE 25 - OTHER EXPENSES(Amount in )

Fuel, Oil & Lubricants

Spares

Packing Materials

Bagasse Handling Expenses

Repairs & Maintainance of Machinery

Factory Maintainance - Other Assets

Sugar Bagging Expenses

Other Manufacturing Expenses

Directors Remuneration

Travelling Expenses - Directors

Directors Sitting Fees

Legal, Consultancy & Professional Charges

Postage, Telegram & Telephone Charges

Printing & Stationery

Rent, Rates, Taxes, Electricity, Insurance & Adm Charges

Repairs and Maintenance - Buildings & Others

Travelling, Conveyance & Honorarium Expenses

Auditors Remuneration

a) Audit Fees

b) Tax & VAT Audit

c) For Reimbursement of Expenses

Loss on Sale of Asset

Selling & Distribution Expenses & Business Promotion

Miscellaneous Expenses

Prior period items (net)

Total :

Sl.No. Particulars

1

2

31 March 2016 31 March 2015

3,50,318

87,676

2,62,642

1,10,659

22,544

88,115

(Amount in )

Sl.No.

Prior period items (net) represents

Debits relating to earlier years

Credits relating to earlier year

Total :

72


26. Segment Reporting:

a. Accounting Policies:

The Accounting Policies adopted for segment reporting are in line with the accountingpolicies adopted by the Company.

b. Segment Information:

(i) Business Segment :

The Company has considered sugar and co-generation of power as the primarysegments for disclosure. These have been identified taking into account theorganizational structure as well as the differing risks and returns of the segments.

(ii) Geographical Segments :

This comprises of domestic market and export market to which the companycaters.For the year 2015-16, the export turnover (through third party) isRs 74,39,46,250/-.

(iii) Segment Assets :

It includes all operating assets used by respective segments and consists principallyof Trade Receivable, inventories and fixed assets. Segmental liabilities includeTrade Payable and other liabilities.

27. Related Party Disclosures :

Related party disclosures have been made herein below. The related parties, in respectof which disclosures have been made, have been identified on the basis of disclosuremade by key managerial persons and taken on record by the Board.

(i) List of Related parties and Description of Relationship :

A) Associates

(a) M/s. Siddapur Distilleries Limited.(b) M/s. Gudagunti Project Engineers Pvt. Ltd.

B) Key Management Personnel

a) Shri. Jagadeesh S. Gudagunti - Chairman & Managing Directorb) Shri. Rajendrakumar S. Gudagunti - Executive Directorc) Shri. Mahendra B. Horaginamani - Company Secretary

73


(ii) Information relating to related party transactions for the year ending 31st March 2016

28. Contingent Liabilities:

The entire sugar stock at the godown has been seized by the Government of Karnatakaon 24th June, 2015 with regard to sugarcane payment dues in dispute. In this regardGovernment has invited tender to auction the seized sugar stock. As the talks betweencompany and the government officials are in progress the liability of the payment of canedues to farmer is dependent on the outcome of the talks. In the eventuality of the liabilitybeing thrust on the company, the company will have to pay Rs.11,72,54,018/- to thefarmers in respect of cane bill of the season 2013-14.

29. Unexecuted Contracts:

Estimated amount of contracts remaining unexecuted on capital account is Rs. Nil (PreviousYear Rs. Nil).

30. Investments and Current Assets:

In the opinion of the Board, all investments, current assets including Stock-in-trade, TradeReceivable and Loans and Advances would in the normal course of business be realisable atthe values stated.

ASSOCIATES

Description

(Amount in )

Siddapur Distilleries Ltd.

2015-16 2014-15

Purchase of goods

Sale of goods

Rendering of Services

Receiving of Services

Amount Outstanding(Due to the Company)

Amount Outstanding(Due by the Company)

1,15,35,980

30,10,65,741

12,43,856

2,01,483

10,60,76,225

71,40,972

1,40,05,690

27,14,30,300

62,390

1,98,204

2,53,35,149

14,91,742

(Amount in )

Key Management Personnel Jagadeesh S. Gudagunti, Chairman &

Managing Director andRajendrakumar

S. Gudagunti, Executive DirectorDescription

2015-16 2014-15

Purchase of goods 16,16,523 8,57,154

74


31. List of Micro, Small and Medium Enterprises to whom the Company has payments due,have been identified from available information as at 31st March, 2016:

i) Gotan Lime Industries, Jodhapurii) Bagalkot Chemicals Industries, Bagalkotiii) Shri Hanuman Minerals, Jodhapuriv) The Kolar Chemical Works, Banahattiv) Godavari Enterprises, Chincholi

32. The balance of few of the receivable and payable, Loans and advances are subject toreconciliation and confirmations and consequential expenses/incomes.

33. Figures have been rounded off to nearest rupee value.

34. Previous year figures have been reclassified/regrouped/rearranged, wherever necessary,to be in conformity with this year’s presentation.

35. Significant accounting policies and practices adopted by the company are Disclosed in thestatement annexed to these financial statement Annexure-I.

For Shri Prabhulingeshwar Sugars and Chemicals Limited

Place: SiddapurDate: 06-08-2016

*As per our report of even date attached*For NATARAJ & CO.,

FRN 006442SCHARTERED ACCOUNTANTS

Sd/-(M.B.NATARAJ)




Sd/-Rajendrakumar S. Gudagunti

Executive Director

75


ANNEXURE - I

STATEMENT OF SIGNIFICANT ACCOUTING POLICIES AND PRACTICES(Annexed to and forming part of the financial statements for the year ended 31st March, 2016)

(I) ACCOUNTING POLICIES:

1. Basis of Accounting:

a. The Financial Statements have been prepared based on historical cost convention and accrualbasis of accounting and are in conformity with the Accounting Standards notified under the CompaniesAct, 2013 (“the Act”) read with General Circular No.15/2013 dated 13th September, 2013 of theMinistry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 unless otherwisespecifically stated.

2. Recognition of Income and Expenditure:

a. The sales are shown net of value added tax and excise duty, if any.

b. Scrap is accounted on actual sale basis.

c. Dividend income on investment in shares is recognised based on the establishment of Company’sright to receive the same.

d. Sale of steam and pressmud has been recognized based on commercial invoice raised during theyear.

e. The Government grants are accounted on accrual basis after the conditions specified for claimingsuch grants have been complied as detailed in Clause 9 herein below.

3. Fixed Assets:

Fixed Assets (Net of Cenvat Credit wherever applicable) are stated at cost less accumulateddepreciation and cost includes applicable overheads till the date of commissioning. Capitalwork-in-progress is stated at cost.

4. Depreciation & Amortisation:

Depreciation amount for assets is the cost of an asset, or other amount substituted for cost,less its estimated residual value. Depreciation on Tangible Fixed Assets has been providedon the straight line method as per the useful life prescribed in Schedule II to the CompaniesAct, 2013.

5. Cash Flow Statement:

Cash flows are reported using indirect method, whereby net profit before tax is adjusted forthe effect of its transactions of non-cash nature, any deferrals or accruals of past or futureoperating cash receipts or payments and items of expenses associated with investing orfinancing cash flows. The cash flows from operating, investing and financing activities of thegroups are segregated.

6. Investments:

Non Current investments are carried at cost. Diminution in the value of investments, meant tobe held for a long period of time, is not recognized as in the opinion of the Directors; suchdiminution in value is purely temporary.

7. Valuation of Inventories :

(A) Inventories of finished stock and spares are valued at lower of cost or net realizablevalue as under:

a) Finished stock of sugar is valued at Cost priceb) Stocks of stores, spares and consumables have been valued at Cost.

(B) By-products Molasses & Bagasse are valued at or net realizable Value.

76


8. Employee Benefits:

a. Monthly contributions towards provident fund are paid by the company to theProvident fund Commissioner.

b. Leave encashment and Gratuity liability is determined and provision held asper Actuarial Valuation.

9. Government Grants:

Revenue Grants are recognized in the Statement of Profit & Loss in accordance with theterms of the related scheme and in the period in which these are accrued.

10. Borrowing Cost:

Borrowing costs that are directly attributable in respect of qualifying assets are capitalized aspart of qualifying fixed assets till the date of commissioning of respective assets. Otherborrowing costs are recognized as expense in the period in which they are incurred.

11. Taxation:

a. Income tax expenses comprise current tax and deferred tax charge or credit.Provision for current tax is made at the tax rate applicable to the relevantassessment year.

b. Deferred tax is recognized on timing differences; being the difference betweentaxable incomes and accounting income that originate in one period and arecapable of reversal in one or more subsequent periods. Deferred tax liabilityis set off to the extent of deferred tax asset if any, and the balance of deferredtax liability is charged.

12. Impairment of Assets:

Management evaluates at regular intervals using external and internal sources whetherthere is any impairment of any asset. Any loss arising on account of impairment isrecognized as expenditure.

13. Provisions, Contingent Liabilities and Contingent Assets:

a. Provisions are recognized for liabilities that can be measured only by using asubstantial degree of estimation, if the amount of the obligation can bereasonably estimated.

b. Contingent Liability is disclosed in the case of a possible obligation, unless theprobability of outflow of resources is remote.

c. Contingent Assets are neither recognized nor disclosed in the financial statements.

14. Earnings per Share:

Basic Earnings per Share are calculated by dividing the net profit/loss for the periodattributable to equity share holders by the weighted average number of equity sharesoutstanding during the period.

Diluted Earnings Per Share are calculated by dividing the net profit/loss for the periodattributable to equity share holders by the weighted average number of equity sharesoutstanding during the period as adjusted for the diluted potential equity shares, if any.

15. Segment Reporting:

Segment revenue, results, assets and liabilities have been identified to represent segments on thebasis of their relationship to the operating activities of the segment. Revenue and expenses, whichrelate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have beenincluded under “Unallocated Corporate Income/ Expenses”. Unallocated assets mainly relate to fixedassets at factory not directly identifiable to any segment.

77

PRABHU SUGAR PRABHU POWERFORM NO. SH-13

Nomination Form[Pursuant to section 72 of the Companies Act, 2013 and rule 19(1) of the

Companies (Share Capital and Debentures) Rules 2014]To,Name of the Company: Shri Prabhulingeshwar Sugars & Chemicals LtdAddress of the Company: 1st Floor, Sukrut Building, Opposite K. C. Park, MainGate, P. B. Road, Dharwad – 580 008.

I/We..............................................................................................theholder(s) of the securities particulars of which are given hereunder wish to makenomination and do hereby nominate the following persons in whom shall vest, allthe rights in respect of such securities in the event of my/our death.

1. PARTICULARS OF THE SECURITIES (in respect of which nomination is being made)

Name of Securities Folio No. No. ofSecurities

Certificate No. Distinctive No.

2. PARTICULARS OF NOMINEE/Sa) Name:b) Date of Birth:c) Father's /Mother's/ Spouse's Name:d) Occupation:e) Nationality:f) Address:g) E-mail Id :h) Relationship with security holder:

3. IN CASE NOMINEE IS A MINOR—a) Date of birth:b) Date of attaining majority:c) Name of guardian:d) Address of guardian:

Name :Address:

Name of the Security Holder(s) Signature of the Nominee Witness with nameand address

78

PRABHU SUGAR PRABHU POWERFORM NO. SH-14

Cancellation or Variation of Nomination[Pursuant of sub-section (3) of section 72 of the Companies Act,2013 and rule 19(9)of the Companies (Share Capital and Debentures) Rules 2014]

Name of the Company : Shri Prabhulingeshwar Sugars & Chemicals Ltd

I/We hereby cancel the nomination(s) made by me/us in favorof................................................................................................................ (name and address of the nominee) in respect of the belowmentioned securities.

OR

I/We hereby nominate the following person in place of ....................................asnominee in respect of the below mentioned securities in whom shall vest all rightsin respect of such securities in the event of my/our death.

1. PARTICULARS OF THE SECURITIES (in respect of which nomination is beingcancelled / varied)

2. a) PARTICULARS OF THE NEW NOMINEE--i. Name:ii. Date of Birth:iii. Father's /Mother's/ Spouse's Name:iv. Occupation:v. Nationality:vi. Address:vii. E-mail id:viii.Relationship with security holder:

b) IN CASE NOMINEE IS A MINOR—i. Date of Birth:ii. Date of attaining majority:iii. Name of guardian:iv. Address of guardian:

Name of Securities Folio No. No. ofSecurities

Certificate No. Distinctive No.

Witness with name and address

Name of the Security Holder(s)

Signature

79

PRABHU SUGAR PRABHU POWERPRABHU SUGAR PRABHU POWER

SHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITEDCIN:U85110KA1995PLC017861, ISO : 14001 : 2004 Certified

Registered Office : 1st Floor, “Sukrut”, Building, Opp. K.C.Park Main Gate, P.B.Road,Dharwad – 580 008 Karnataka State. Tele Fax : 0836-2745036

Factory : Siddapur Village, Tq. : Jamkhandi, Dt. : Bagalkot. Ph. 08353-238004, 238200

E-mail : [email protected], Website : www.prabhusugar.com

PROXY FORM (MGT-11)

Name of the Member(s) :

Registered Address :

Email ID :

Regd. Folio/Client ID No. :

DP ID No. :

No. of Shares :

I/We______________________________of________________in the district of________________

being a Member/Members of Shri Prabhulingeshwar Sugars and Chemicals Limited, Dharwad

hereby appoint Mr./Mrs___________________________________of ______________________ in

the district of____________________________________or failing him/her,

Mr./ Mrs._________________________of___________________________in the district of

___________________________ as my/our proxy to attend and vote for me/us on my/our behalf

at the Twenty First Annual General Meeting of the Company to be held on Thursday, September

29, 2016 at 03:00 p.m. at Modern Hall, Near Toll Naka, Dharwad and at any adjournment

thereof in respect of such resolutions as are indicated below:

ResolutionNumber Resolution

Pleasemention no.

of shares For Against

1 To receive, consider and adopt the StatutoryFinancial Statements as at 31st March, 2016,together with the Board’s Report andAuditors Report’s thereon.

2 To Appoint Director in place of Shri Deval A.Desai (DIN-00801867) who retires by rotationand being eligible, offer himself for reappointment.

Ordinary Business :


80


3

4 To Ratify the appointment of StatutoryAuditors.

To Appoint Director in place of Shri SudheerS. Gudagunti (DIN-00464901) who retires byrotation and being eligible, offer himself forre-appointment.

5

6

To appoint Shri Jagadeesh Shivayya Gudagunti,as a Managing Director and to fix hisremuneration.

7

8

To appoint Shri Umesh Shivalingayya Hiremath,B.A.LL.M as an “Independent Director” of thecompany for the period of one year witheffect from 27.09.2016 till the conclusion of22nd AGM.

To appoint Shri Mahalingappa ChandrappaHipparagi, B.A.,M.Com as an “IndependentDirector” of the company for the period oftwo consecutive years with effect from29.09.2016 till the conclusion of 23rd AGM.

To consider confirm and ratification ofremuneration to Cost Auditors for theF.Y.2016-17

Special Business :

Signed this ________day of __________Affix Rs. One

Revenue Stamp

Signature of the Shareholder Signature of the Proxy

Note : The proxy form duly signed across the revenue stamp of One Rupee must reach the Company's Registered Office not less than 48 hours before the time of the meeting.

81


SHRI PRABHULINGESHWAR SUGARS AND CHEMICALS LIMITEDCIN:U85110KA1995PLC017861, ISO : 14001 : 2004 Certified

Registered Office : 1st Floor, “Sukrut”, Building, Opp. K.C.Park Main Gate, P.B.Road,Dharwad – 580 008 Karnataka State. Tele Fax : 0836-2745036

Factory : Siddapur Village, Tq. : Jamkhandi, Dt. : Bagalkot. Ph. 08353-238004,238200

E-mail : [email protected], Website : www.prabhusugar.com

BALLOT FORM (MGT-12)

{Pursuant to Section 109(5) of the Companies Act, 2013 and Rule 21(1)(c)of the Companies(Management and Administration) Rules, 2014}

Name of the Member(s) :

Registered Address :

Email ID :

Regd. Folio/Client ID No. :

DP ID No. :

No. of Shares :

I/We hereby exercise my/our vote in respect of Ordinary/Special Resolution enumerated belowby recording any assent/dissent to the said resolution given below:

ResolutionNumber Resolution

Pleasemention no.

of shares For Against

1 To receive, consider and adopt the StatutoryFinancial Statements as at 31st March, 2016,together with the Board’s Report andAuditors Report’s thereon.

2 To Appoint Director in place of Shri Deval A.Desai (DIN-00801867) who retires by rotationand being eligible, offer himself for reappointment.

Ordinary Business :

82


3

4 To Ratify the appointment of StatutoryAuditors.

To Appoint Director in place of Shri SudheerS. Gudagunti (DIN-00464901) who retires byrotation and being eligible, offer himself forre-appointment.

Signed this ________day of __________

Signature of the Shareholder

5

6

To appoint Shri Jagadeesh Shivayya Gudagunti,as a Managing Director and to fix hisremuneration.

7

8

To appoint Shri Umesh Shivalingayya Hiremath,B.A.LL.M as an “Independent Director” of thecompany for the period of one year witheffect from 27.09.2016 till the conclusion of22nd AGM.

To appoint Shri Mahalingappa ChandrappaHipparagi, B.A.,M.Com as an “IndependentDirector” of the company for the period oftwo consecutive years with effect from29.09.2016 till the conclusion of 23rd AGM.

To consider confirm and ratification ofremuneration to Cost Auditors for theF.Y.2016-17

Special Business :

Documents

SHRI PRABHULINGESHWAR SUGARS AND …...Shri Prabhulingeshwar Sugars and Chemicals Limited will be held at Modern Hall, Near Toll Naka, Dharwad on Thursday, 29th September 2016 at 3-00