Davangere Sugar Issues AGM Corrigendum on Warrant Terms

Nature of the Event

Davangere Sugar Company Limited issued a corrigendum and clarification to the Notice of its 55th Annual General Meeting, specifically pertaining to Item No. 8, which concerned the issue of Convertible Equity Warrants on a preferential basis to promoters. This corrigendum was issued pursuant to observations received from the National Stock Exchange of India Limited (NSE) and under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Key Quantitative Figures

The special resolution approved the issue of up to 10,64,11,079 Convertible Equity Warrants at an issue price of ₹3.77 per Warrant, aggregating to ₹40,11,69,768.24 (Rupees Forty Crore Eleven Lakh Sixty-Nine Thousand Seven Hundred Sixty-Eight and Twenty Four Paise).

Dates of Action

The 55th Annual General Meeting (AGM) was held on Saturday, September 12, 2026. The NSE's letter containing its observations is dated October 01, 2026 (Ref: NSE/LIST/57029). The company's intimation letter and the corrigendum are dated October 07, 2026.

Parties Involved

The primary entities involved are Davangere Sugar Company Limited (the issuer), the National Stock Exchange of India Limited (NSE), and BSE Limited. The proposed allottees of the warrants are the promoters: Mr.S. S. Ganesh and Mr. Abhijith Ganesh Shamanur.

Purpose and Rationale

The purpose of the corrigendum is to comply with observations from the NSE, which required two specific clarifications:

1. Correction of the description of the nature of consideration for the warrant issue.

2. Disclosure of the current and proposed status of the proposed allottees.

The rationale for the original resolution was to issue warrants by converting outstanding unsecured loans advanced by the promoters.

Financial and Operational Impact

The entire consideration for the warrants (₹40,11,69,768.24) will be discharged by adjusting it against the outstanding unsecured loans owed to the promoters. Consequently, the company will not receive any fresh cash inflow from this transaction. The corrigendum explicitly states: "no fresh cash shall be received by the Company in respect of the proposed issue."

Capital Structure Impact

The issue involves up to 10,64,11,079 warrants, each convertible into one equity share of ₹1 face value. Upon full conversion, this would result in the issuance of an equivalent number of equity shares. The document confirms the allottees are and will remain classified as Promoters/Promoter Group, so the issue will not result in any change in the management or control of the company.

Voting Results from AGM

The special resolution (Item No. 8) was approved at the AGM held on September 12, 2026. The consolidated voting results were:

Votes in Favour: 433 members, representing 9,54,83,430 shares (99.7598% of valid votes cast).
Votes Against: 7 members, representing 2,29,904 shares (0.2402% of valid votes cast).
The votes cast by the Promoters and Promoter Group, who were interested in the resolution, were not considered for determining the majority.

Details of the Corrigendum

The NSE's observations and the subsequent corrections are as follows:

1. Correction on Nature of Consideration:

The expression "consideration other than cash" was incorrect. The corrigendum replaces it with "consideration in cash, to be discharged by way of conversion/adjustment of the outstanding unsecured loans" throughout the notice. The loan amount is uniformly stated as ₹40,11,69,768.24.

2. Disclosure of Allottee Status:

The following table was added to disclose the current and proposed status of the allottees:

The corrigendum emphasizes that it does not reopen or modify the voting already concluded on Item No. 8 and does not alter the commercial terms of the issue approved by the members.

Additional Information

The document was digitally signed by Shamanur Shivashankarappa Ganesh, Managing Director (DIN: 00451383). The corrigendum has been uploaded on the company's website at www.davangeresugars.com and on the websites of the stock exchanges.