Your Directors present herewith the 3rd Annual Report on the business & operationsof the Company along with the Audited Statement of Accounts for the financial year ended31st March 2017.
2 SCHEME OF ARRANGEMENT
The Composite Scheme of Arrangement between Upper Ganges Sugar & Industries LtdThe Oudh Sugar Mills Ltd Palash Securities Ltd Allahabad Canning Ltd Ganges SecuritiesLtd Cinnatolliah Tea Ltd Vaishali Sugar & Energy Ltd Magadh Sugar & Energy Ltdand Avadh Sugar & Energy Ltd and their respective shareholders and creditors hasreceived requisite approvals of regulatory authorities including Hon'ble High Court SEBICCI and finally by National Company Law Tribunal Allahabad Bench on March 2 2017. TheScheme envisaged Birla Group of Sugar Companies to re-arrange itsbusinessactivitiestoachievetheBusinessalignment as per market dynamics and variantcapital needs of each business as well as to house geographically in separate entities itssugar investments tea and food processing businesses. Pursuant to the said Scheme thesugar business operations in the State of Uttar Pradesh becomes part of the Company viz;Hargaon Sugar Mills Seohara Sugar Mills Rosa Sugar Works and New India Sugar MillsHata.
3. FINANCIAL RESULTS AND APPROPRIATIONS
| || ||( Rs in lacs) |
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Revenue from ||197657.26 || |
|Operations (Gross) || || |
|Profit before ||43873.68 ||(1.09) |
|Finance Costs Tax || || |
|Depreciation and || || |
|Amortization || || |
|Less: Depreciation & || || |
|Amortization || || |
|Expenses ||4596.40 || |
|Finance Costs ||12996.72 || |
| ||17593.12 || |
|Profit/(Loss) Before ||25280.56 ||(1.09) |
|Tax || || |
|Less: Provision for ||4323.00 4323.00 || |
|Tax || || |
|Profit/(Loss) After Tax ||20957.56 ||(1.09) |
|Less : Impact of Scheme related to earlier period ||(15205.36) || |
|Balance carried to Balance Sheet ||5750.63 || |
4. OPERATING PERFORMANCE
In facade of dynamic market conditions wherein the long awaited resurgence in the sugarindustry had begun during first half though quite subdued in comparison to other halfwhich witnessed upward trend in sugar pricing your Company has delivered top line growthand performed ahead of underlying Sugar Season 2016-17 prima-facie due to supply of goodquality of sugarcane culminating into higher recoveries and expedited sales. A detailedanalysis of the Company's operations future expectations and business environment hasbeen given in the Management Discussion & Analysis Report which is made an integralpart of this Report and marked as
5. FINANCIAL PERFORMANCE 2016-17
The Company recorded Total Revenue of Rs187549.47lacs(includingotherincomeaggregatingto Rs 249.28 lacs) during the financial year ended 31st March 2017. The Revenue fromOperations (Gross) of the Company for the year 2016-17 stood at Rs 197657.26lacs. The Profit before Finance Costs
Tax Depreciation and Amortisation for the year under review stood at Rs 42873.68 lacsrepresenting 22.86 % of the total revenue.
There is no change in the nature of business of the Company. There were no significantorders passed by regulators courts or tribunals impacting the Company's operation infuture.
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year i.e. 31st March 2017 anddate of this report.
Your Company had adopted a dividend distribution policy that balances the dualobjectives of appropriately rewarding Members through dividends and retaining capital inorder to maintain a healthy capital adequacy ratio to support long term growth of yourCompany. Consistent with this policy your Board has recommended a cumulative dividend on8.5 % Non-convertible Cumulative
Redeemable Preference Shares for the financial year 2011-12 to 2016-17 aggregating toRs 2346.47 lacs ; Cumulative dividend on 12 % Non-convertible Cumulative RedeemablePreference Shares for the financial year 2014-15 to 2016-17 aggregating to Rs 513.08 lacsand dividend of Rs 2/- on Equity Shares (20 %) for the financial year 2016-17 to theMembers of your Company. The proposal is subject to the approval of the Members at the 3rdAnnual General Meeting (AGM) of your Company scheduled to be held on July 31 2017. Thedividend together with the dividend distribution tax will entail a cash outflow ofRs3682.63 lacs (previous year Rs Nil).
7. PUBLIC DEPOSITS
The Company has not accepted any deposits from the public and as such there are nooutstanding fixed deposits in terms of Companies (Acceptance of Deposit Rules) 2014.
8. SHARE CAPITAL
In accordance with the Composite Scheme of Arrangement on merger of residual UpperGanges Sugar & Industries Ltd and residual The Oudh Sugar Mills Ltd the AuthorizedShare Capital of the Company which at the time of incorporation was Rs 500000/- (RupeesFive lacs) divided into 50000 (fifty thousand) Equity Shares of Rs 10/- each has becomeRs 1700500000/-(Rupees One hundred seventy crore and five lacs) divided into Rs560500000/- equity shares divided into 56050000 (Five crore sixty lacs fiftythousand) Equity Shares of Rs 10/- (Rupees ten) each and Rs 500000000/- (RupeesFifty Crores) Preference Shares divided into 50000000 (Five crore) Preference Shares ofRs 10/- and Rs 340000000/- (Rupees Thirty Four crores) Preference Shares divided into3400000 (Thirty-four lacs) Preference Shares of Rs 100/- each and Rs 300000000/-(Rupees Thirty crores) Unclassified Shares divided into 30000000 (Three Crore)unclassified shares of Rs 10/- each.
9. SUBSIDIARY COMPANIES
The Company does not have any subsidiary. However the Company has formulated a policyfor determining material subsidiaries in line with the requirement of SEBI (LODR)Regulations 2015.
The said Policy is being disclosed on the Company's website at the weblinkhttp://birla-sugar.com/Assets/Avadh/Avadh-Sugar-Policy-for-Determining-Material-Subsidiaries.pdf.
10. HUMAN RESOURCES
The Company continued to create a productive learning and caring environment byimplementing robust and comprehensive HR processes fair transparent performanceevaluation and taking new initiatives to further align its Human Resource policies to meetthe growing needs of its business.
The Board of Directors comprises of seven Non-Executive Directors having experience invaried fields and a Whole time Director. Out of seven Non-Executive Directors fiveof themare Independent
Directors and other two directors are Promoter Directors. Mrs Nandini Nopany is theChairperson of the Company whereas Mr Chandra Shekhar Nopany is Co-Chairperson of theCompany.
Mrs. Nandini Nopany will retire by rotation at the ensuing Annual General Meeting andbeing eligible has offered herself for re-appointment as Director of the Company. She isproposed to be re-appointed as Director and will be liable to retire by rotation.
Pursuant to the applicable provisions of the Companies Act 2013 the Board of Directorsof the Company at its meeting held on 14th March 2017 appointed Mr. Anand Ashvin DalalMr. Sunil Kanoria Mr. Gaurav Swarup Mr Pradip Kumar Bishnoi and Mr. Kalpataru Tripathyappointed as Additional Directors and accordingly they would hold the office upto the dateof the ensuing Annual
General Meeting. The Company has received notices in writing under Section 160 of theCompanies Act 2013 from members proposing the candidature of Mr Anand Ashvin Dalal Mr.Sunil Kanoria Mr. Gaurav Swarup Mr Pradip Kumar Bishnoi and Mr. Kalpataru Tripathyrespectively. The Board of Directors at its meeting held on 14th March 2017 designatedMr. Anand Ashvin Dalal Mr. Sunil Kanoria Mr. Gaurav Swarup Mr Pradip Kumar Bishnoi andMr. Kalpataru Tripathy as independent directors. The Board of Directors recommended to theshareholders for their appointment for a period of five consecutive years with effect fromthe date of the ensuing Annual General Meeting.
Other information on the Directors including required particulars of Directors retiringby rotation is provided in the Annexure to the Notice.
12. KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company at its meeting held on March 30 2017 hadappointed following persons as Key Managerial Personnel of the Company viz:
a. Mr. Devendra Kumar Sharma Whole time Director
b. Mr. Dilip Patodia President (Finance) and Chief Financial Officer
c. Mr. Anand Sharma Company Secretary
All Directors Key Managerial Personnel and Senior
Management of the Company have confirmed compliance with the Code of Conduct applicableto Directors & employees of the Company and a declaration to the said effect by theWholetime Director is made part of Corporate Governance Report which forms part of thisreport. The Code is available on the Company's website at the weblinkhttp://birla-sugar.com/Assets/Avadh/Avadh-Sugar-Code-of-Conduct.pdf. All Directors haveconfirmed compliance with the provisions of Section 164 of the Companies Act 2013.
13. FAMILIARISATION PROGRAMME
Periodic presentations are made at the Board Meetings business performance updates&business strategy of the Company.
14. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as
15. REMUNERATION POLICY
The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration Policy as adopted by the Board ofDirectors is attached as "Annexure E". to this Report. The Committee hasalso framed criteria for performance evaluation of every Director and accordingly hascarried out the performance evaluation.
16. CORPORATE SOCIAL RESPONSIBILITY POLICY
The Company continues to spend to support local initiatives to improve infrastructureas well as support in other corporate social responsibilities.
The disclosure requirement with respect to CSR spends are not applicable to the Companyin view of inadequate profits/losses during the three immediately preceding financialyears. The CSR
Policy as approved by the Board is available on Company's website at the weblinkhttp://birla-sugar. com/Assets/Avadh/Avadh-Sugar-CSR-Policy.pdf
A calendar of Meeting is prepared and circulated in advance to the Directors. The Boardevaluates all the decisions on a collective consensus basis amongst the Directors. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013. During the financial year ended 31st March 2017 7 (seven) Meetings of theBoard of Directors of the Company were held. The details of the Board Meetings held duringthe F.Y. 2016-17 have been furnished in the Corporate Governance Report forming a part ofthis Annual Report.
18. AUDIT COMMITTEE
The Audit Committee was constituted on March 14 2017 and the Committee now comprisesof Mr. Anand Ashvin Dalal Mr. Pradip Kumar Bishnoi Mr. Kalpataru Tripathy and Mr.Devendra Kumar Sharma. The Company Secretary acts as the Secretary to the Committee andthe Chief Financial
Officer is a permanent invitee to the meetings.
During the year there were no instances where Board has not accepted the recommendationof Audit Committee.
The details of the terms of reference number and dates of meetings held attendance ofthe Directors and remuneration paid to them are separately provided in the CorporateGovernance Report.
19. STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Stakeholders' Relationship Committee was constituted on March 14 2017 and nowcomprises of Mr Gaurav Swarup Mr. Anand Ashvin Dalal Mr Pradip Kumar Bishnoi and Mr.Devendra Kumar Sharma. The Company Secretary acts as the Secretary to the Committee. Thedetails of the terms of reference number and dates of meetings held attendance of theDirectors and remuneration paid to them are separately provided in the CorporateGovernance Report.
20. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee was constituted on March 14 2017and nowcomprises of Mr. Sunil Kanoria Mr Gaurav Swarup Mr. Anand Ashvin Dalal and Mr KalpataruTripathy. The Company Secretary acts as the Secretary to the Committee. The details of theterms of reference number and dates of meetings held attendance of the Directors andremuneration paid to them are separately provided in the Corporate Governance Report.
21. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee was constituted on March 14 2017 and theCommittee now comprises of Mrs Nandini Nopany Mr. Pradip Kumar Bishnoi and Mr DevendraKumar Sharma. The Company Secretary acts as the Secretary to the Committee. The details ofthe terms of reference number and dates of meetings held attendance of the Directors andremuneration paid to them are separately provided in the Corporate Governance Report.
22. INTERNAL COMPLAINTS COMMITTEE
An Internal Complaints Committee was constituted by the Company in terms of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. TheAct aims at protecting women's right to gender equality life and liberty at workplace toencourage women participation at work. The Committee meets all the criteria including itscomposition mentioned in the Act and relevant Rules. No complaint has been received by theCommittee during the year under review.
23. LOANS GUARANTEE AND INVESTMENTS
It is the Company's policy not to give any loans directly or indirectly to any person(other than to employees under contractual obligations) or to other body corporate orperson. In compliance with section 186 of the Companies Act 2013 loans to employees bearapplicable interest rates. During the year under review the Company has not made anyinvestment in securities of other body corporate. The details of Investments Loans andGuarantees covered under the provisions of Section 186 of the Companies Act 2013 aregiven in the notes 14 to the Financial Statements.
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There were nomaterially significant transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
Accordingly no transaction are being reported in Form AOC-2 in terms of Section 134 ofthe Act read with Rule 8 of the Companies (Accounts) Rules 2014. However the Directorsdraw attention of the members to Note 31 to the financial statement which sets out relatedparty disclosures
The Company has developed a Related Party Transactions Policy for purpose ofidentification and monitoring of such transactions and accordingly any or all RelatedParty Transactions are placed before the Audit Committee as also the Board for approvalincluding providing prior omnibus approval by the Audit Committee for the transactionswhich are of a foreseen and repetitive nature.
25. RISK MANAGEMENT
In line with the new regulatory requirements the
Company has formally framed a Risk Management Policy to identify and assess the keyrisk areas monitorandreportthecomplianceandeffectiveness of the same. A Risk ManagementCommittee though not mandatory has been constituted comprising of Mr. Devendra KumarSharma Whole time Director Mr Dilip Patodia Chief Financial Officer Shri Chand
Bihari Patodia Group President and Mr Pradip Kumar Bishnoi Independent Director tooversee the risk management process in the Company with an objective to review the majorrisks which effect the Company from both the external and the internal environmentperspective. Appropriate actions have been initiated to either mitigate partiallymitigate transfer or accept the risk (if need be) and monitor the risks on a regularbasis.
26. INTERNAL FINANCIAL CONTROLS
The Company has laid down internal financial control's through a combination of Entitylevel controls Process level controls and IT General controls inter-alia to ensureorderly and efficient conduct of business including adherence to the Company's policiesand procedures accuracy and completeness of accounting records and timely preparation andreporting of reliable financial statements/information safeguarding of assets preventionand detection of frauds and errors.
The evaluations of these internal financial controls were done through the internalaudit process and were also reviewed by the Statutory Auditors. Based on their view ofthese reported evaluations the directors confirm that for the preparation of financialstatements for the financial year ended March 31 2017 the applicable AccountingStandards have been followed and the internal financial controls are generally found to beadequate and were operating effectively & that no significant deficiencies werenoticed.
27. WHISTLE BLOWER / VIGIL MECHANISM
The Company has established a vigil mechanism and adopted whistle blower policypursuant to which whistle blowers can report concerns about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. Themechanism provides adequate safeguards against victimisation of persons who use thismechanism. The brief detail about this mechanism may be accessed on the Company's websiteat the weblinkhttp://www.birla-sugar.com/Assets/Avadh/Avadh-Sugar-Whistle-Blower-Policy.pdf
28. CORPORATE GOVERNANCE
Pursuant to Regulation 34 of the SEBI (LODR) Regulations 2015 the Management Discussion& Analysis Report the Report on Corporate Governance and Declaration of Whole-timeDirector on Code of Conduct and Auditors' Certificate on compliance of conditions ofCorporate Governance form integral part of this Report and are annexed to this Report as "AnnexureB" respectively.
29. RESEARCH & DEVELOPMENT
During the year under review the Company has undertaken Research & Developmentinitiatives with an intention to improve the sugar recovery ratio and to educate the canegrowers to cultivate improved variety of sugarcane and to otherwise increase the sucrosecontents in their produce.
30. AUDITORS AUDIT QUALIFICATIONS AND BOARD'S EXPLANATIONS
Messrs S R Batliboi& Co LLP Chartered Accountants hold office as Auditors of theCompany till the conclusion of ensuing Annual General Meeting.
The Board on the recommendation of the Audit Committee proposed that Messrs B S R& Co LLP Chartered Accountants (Firm registration number 101284W/W-100022) beappointed as the Statutory Auditors of the Company for a period of five consecutive yearsfrom the conclusion of the ensuing 3rd Annual General Meeting of the Company till theconclusion of the 8th Annual General Meeting subject to the approval of the shareholdersof the Compamy.
The remarks/observations made by the Statutory Auditors in their report are selfexplanatory and does not require any further clarifications/ explanation.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its Sugar activity is required to be audited. Your
Directors have on the recommendation of the Audit Committee appointed Mr SomnathMukherjee Cost Accountant as the Cost Auditor to audit the cost accounts of the Companyfor the financial year 2017-18. As required under the Companies Act2013 the remunerationpayable to the cost auditor is required to be placed before the Members in a generalmeeting for their ratification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Messrs Vinod Kothari& Co. Practising Company Secretaries has carried out the Secretarial Audit of theCompany for the financial year 2016-17. The Secretarial Audit Report is annexed herewithas "Annexure F" and which is self explanatory.
31. INVESTOR EDUCATION AND PROTECTION FUND
The provisions pertaining to Investor Education and Protection Fund (Uploading ofInformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany are not applicable to your company.
32. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as"Annexure G"
33. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is attached as a separate "Annexure H" and forms anintegral part of this Report.
34. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in Note 2.1 of the Notes to the FinancialStatements have been selected and applied consistently and judgement and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2017 and of the loss of the Company for the yearended on that date;
c. sufficient care has been taken thatproperand for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
35. CEO/CFO CERTIFICATION
Mr. Devendra Kumar Sharma the Whole time Director and Mr. Dilip Patodia ChiefFinancial Officer have submitted certificates to the Board as contemplated underRegulation 17(8) of the SEBI (LODR) Regulations 2015.
Your Directors take this opportunity of recording their appreciation of theshareholders financial institutions bankers suppliers and cane growers for extendingtheir support to the Company. Your Directors are also grateful to various ministries inthe Central Government and State Government of Uttar Pradesh the Sugar Directorate andthe Sugar Development Fund for their continued support to the Company. The Directors alsorecognise the valuable contribution made by the employees at all levels towards Company'sprogress.
| ||For and on behalf of the Board |
|Kolkata ||Chandra Shekhar Nopany |
|Dated 23rd May 2017 ||Co-Chairperson |
Nomination and Remuneration Policy
In pursuance of the Company's policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors Key Managerial
Personnel (KMP) and Senior Management Personnel of the Company to harmonize theaspirations of human resources consistent with the goals of the Company and in terms ofthe provisions of the Companies Act 2013 and the Securities Exchange Board of India
(Listing Obligations and Disclosure Requirements)
Regulations 2015 as amended from time to time this policy on nomination andremuneration of Directors Key Managerial Personnel and Senior Management Personnel hasbeen formulated and approved by the Board of Directors.
OBJECTIVE AND PURPOSE OF THE POLICY:
The objective and purpose of this policy are:
To lay down criteria terms and conditions with regard to identifying personswho are qualified to become Directors (Executive and Non-Executive) and persons who may beappointed in Key Managerial positions and Senior Management and to determine theirremuneration.
To formulate the criteria for determining positive attributes and independencequalifications of a director
To determine remuneration based on the Company's size financial positiontrends and practices on remuneration prevailing in peer companies in the like industry.
To carry out evaluation of the performance of Directors as well as KeyManagerial and Senior Management Personnel.
To provide them reward linked directly to their effort performance dedicationand achievement relating to the Company's operations.
To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
CONSTITUTION OF THE NOMINATION AND REMUNERATION COMMITTEE:
The Board of Directors at its meeting held on 14th March 2017 in order to align withthe requirements of Companies Act 2013 had constituted the Nomination and RemunerationCommittee comprising of non - executive directors and independent directors.
"Board" means Board of Directors of the Company.
"Directors" means Directors of the Company.
"Committee" means Nomination and Remuneration Committee of the Companyas constituted by the Board.
"Company" means Avadh Sugar & Energy Limited.
"Independent Director" means a director referred to in Section 149 (6)of the Companies Act 2013.
"Key Managerial Personnel (KMP) means" -a) Executive Chairman and / orManaging Director; b) Whole-time Director; c) Chief Financial Officer; d) CompanySecretary;
e) Such other officer as may be prescribed under the applicable statutory provisions /regulations.
"Senior Management Personnel" means personnel of the Company occupyingthe position of Executive President of any Unit and/or personnel of the company who aremembers of its core management and which include members of management one level below theexecutive directors. Unless the context otherwise requires words and expressions used inthis policy and not defined herein but defined in the Companies Act
2013 as may be amended from time to time shall have the meaning respectively assignedto them therein.
The Policy is applicable to
a. Directors (Executive and Non-Executive including Independent)
b. Key Managerial Personnel
c. Senior Management Personnel
This Policy is divided in three parts: Part A covers the matters to be dealtwith and recommended by the Committee to the Board Part B covers the appointmentand nomination and Part C covers remuneration and perquisites etc.
MATTERS TO BE DEALT WITH PERUSED AND RECOMMENDED TO THE BOARD BY THE NOMINATION ANDREMUNERATION COMMITTEE
The Committee shall:
1. Evaluate the current composition and organization of the Board and its committees inlight of requirements established by any Regulatory Body or any other applicable statuterule or regulation which the Committee deems relevant and to make recommendations to theBoard with respect to the appointment re-appointment and resignation of IndependentExecutive and Non-Executive Directors of the Company;
2. ReviewthecompositionandsizeoftheBoardinorder to ensure that the Board is comprisedof members reflectingthe proper expertise skills attributes and personal andprofessional backgrounds for service as a Director of the Company as determined by theCommittee;
3. Review and recommend to the Board an appropriate course of action upon theresignation of current Board members or any planned expansion of the
Board and review the qualifications experience and fitness for service on the Boardof any potential new members of the Board;
4. Ensure that the level and composition of remuneration is reasonable sufficient toand attract retain and motivate Directors of the quality required to run the Companysuccessfully;
5. Ensure that relationship of remuneration to performance is clear and meetsappropriate performance benchmarks;
6. Ensure that remuneration to Directors Key Managerial Personnel (KMPs) and seniormanagement involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals;
7. Formulate the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a policy relating to theremuneration for the Directors Key Managerial Personnel (KMPs) and other employees of theCompany;
8. Formulate the criteria for evaluation of Independent Directors and the Board;
9. Formulate administer and supervise the Company's Stock Option schemes if any inaccordance with relevant laws;
10. Identify the persons who are qualified to become
Directors and who may be appointed in senior management in accordance with the criterialaid down recommend to the Board their appointment and removal;
11. Deal with such matters as may be referred to by the Board of Directors from time totime;
POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR KEY MANAGERIAL PERSONNEL AND SENIORMANAGEMENT
The guiding principle is that the while determining qualification positive attributesand other criteria's the remuneration and the other terms of employment shall becompetitive in order to ensure that the Company can attract and retain competentExecutives.
When determining the remuneration policy and arrangements for Executive Directors/KMP's and Senior Management personnel the Remuneration Committee considers pay andemployment conditions with peers / elsewhere in the competitive market to ensure that paystructures are appropriately aligned and that levels of remuneration remain appropriate inthis context.
The Committee while designing the remuneration package considers the level andcomposition of remuneration to be reasonable and sufficient to attract retain andmotivate the person to ensure the quality required to run the company successfully.
The Committee while considering a remuneration package must ensure a balance betweenfixed and incentive pay reflecting short and long term performance objectives appropriateto the working of the company and its goals.
The Committee considers that a successful remuneration policy must ensure that asignificant part of the remuneration package is linked to the achievement of corporateperformance targets and a strong alignment of interest with stakeholders.
Appointment criteria and qualifications:
1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.
2. The Committee along with the Board shall review on an annual basis appropriateskills characteristics and experience required of a Board
Member. The objective is to have a Board with diverse background and experience inbusiness government academics technology and in areas that are relevant for theCompany's operations.
3. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience including general understanding of theCompany's business dynamics global business and social perspective educational andprofessional background and personal achievementspossessed by a person is sufficient /satisfactory for the concerned position.
4. The Company shall not appoint or continue the employment of any person as Whole-timeDirector who has attained the age of seventy years. Provided that the term of the personholding this position may be extended beyond the age of seventy years with the approval ofshareholders by passing a special resolution based on the explanatory statement annexed tothe notice for such motion indicating the justification for extension of appointmentbeyond seventy years.
TERM / TENURE:
1. Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its ExecutiveChairman/Chairperson Managing Director or Executive Director or Whole-time Director for aterm not exceeding five years at a time. No re-appointment shall be made earlier than oneyear before the expiry of term.
2. Independent Director:
An Independent Director shall hold office for a term as per the applicable lawsprevailing from time to time. In accordance with the Companies Act 2013 and SEBI (LODR)Regulations 2015 an Independent Director shall hold office for a term up to fiveconsecutive years on the
Board of the Company and will be eligible for re-appointment on passing of a specialresolution 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 but suchIndependent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly.
At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serves is restricted to seven listed companiesas an Independent Director and three listed companies as an Independent Director in casesuch person is serving as a Whole-time Director of a listed company.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval.
The Committee may also consider the report of evaluation carried out only byIndependent Directors while reviewing the performance of non-independent directors and theboard as whole.
Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director KMPor Senior Management Personnel subject to the provisions and compliance of the said Actrules and regulations.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Companies Act 2013 and the prevailing policy of the Company. The Boardwill have the discretion to retain the Director KMP Senior Management Personnel in thesame position / remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.
POLICY RELATING TO THE REMUNERATION FOR THE WHOLE-TIMEDIRECTOR KMP AND SENIORMANAGEMENT PERSONNEL
1. The remuneration/ compensation/ commission etc. to the Managing/Whole-time Director
KMP and Senior Management Personnel will be determined by the Committee and recommendedto the Board for approval. The remuneration / compensation / commission etc. shall besubject to the prior/post approval of the shareholders of the Company and
Central Government wherever required.
2. The remuneration and commission to be paid to the Managing Director/Whole-timeDirector shall be in accordance with the percentage / slabs / conditions laid down in theArticles of Association of the Company and as per the provisions of the Companies Act2013 and the rules made thereunder.
3. Increments to the existing remuneration / compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Whole-time Director wherever required.
4. Where any insurance is taken by the Company on behalf of its Managing/Whole-timeDirector
Chief Executive Officer Chief Financial Officer the Company Secretary and any otheremployees for indemnifying them against any liability the premium paid on such insuranceshall not be treated as part of the remuneration payable to any such personnel. Providedthat if such person is proved to be guilty the premium paid on such insurance shall betreated as part of the remuneration.
5. Remuneration packages will be designed to attract high-calibre executives in acompetitive global market and remunerate executives fairly and responsibly. Theremuneration shall be competitive and based on the individual responsibilities andperformance.
6. Remuneration is designed to motivate delivery of company's key business strategiescreate a strong performance-orientated environment and reward achievement of meaningfultargets over the short- and long-term.
7. The Executives may be entitled to customary non-monetary benefits such as companycars and company health care telephone etc. In addition thereto in individual casescompany housing and other benefits may also be offered.
Remuneration to Whole-time / Executive / Managing Director Key Managerial Personneland Senior Management Personnel:
1. FIXED PAY:
The Managing/Whole-time Director / Key Managerial Personnel and Senior ManagementPersonnel shall be eligible for a monthly remuneration as may be approved by the Board onthe recommendation of the Committee. The break-up of the pay scale and quantum ofperquisites including employer's contribution to P.F pension scheme medical expensesclub fees etc. shall be decided and approved by the Board on the recommendation of theCommittee and approved by the shareholders and Central Government wherever required.
2. MINIMUM REMUNERATION:
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing/Whole-time Director in accordance withthe applicable provisions of the Companies Act 2013 and if it is not able to comply withsuch provisions with the previous approval of the Central Government.
3. PROVISIONS FOR EXCESS REMUNERATION:
If any Managing/Whole-time Director draws orreceivesdirectlyorindirectlybywayofremuneration any such sums in excess of the limitsprescribed under the Companies Act 2013 or without the prior sanction of the CentralGovernment where required he / she shall refund such sums to the
Company and until such sum is refunded hold it in trust for the Company. The Companyshall not waive recovery of such sum refundable to it unless permitted by the CentralGovernment.
REMUNERATION TO NON- EXECUTIVE / INDEPENDENT DIRECTOR:
1. Remuneration / Commission:
The remuneration / commission shall be fixed as per . the slabs and conditionsmentioned in the Articles of Association of the Company and the Companies Act 2013 andthe rules made thereunder.
2. Sitting Fees:
The Non- Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereofin terms of applicable provisions of theCompanies Act 2013.
Commission may be paid within the monetary limit approved by shareholders subject tothe limit not exceeding 1% of the profits of the Company computed as per the applicableprovisions of the Companies Act 2013.
In any circumstance where the terms of this policy differs from any existing or newlyenacted law rule regulation or standard governing the Company the law rule regulationor standard will take precedence over these policies and procedures until such time thispolicy is changed / amended to conform to the law rule regulation and standard.
Information on the total remuneration of members of the Company's Board of DirectorsExecutive Board of Management and senior management may be disclosed in the Company'sannual financial statements. This includes any deferred payments and extraordinarycontracts during the preceding financial year.
The Company's Nomination and Remuneration Policy shall be published on its website.
LIST OF DOCUMENTS
1. Corporate Matters
1.1 Minutes books of the following meetings were provided:
1.1.1 Board Meeting;
1.1.2 General Meeting;
1.2 Annual Report for the Financial year 2015-2016;
1.3 Memorandum and Articles of Association;
1.4 Disclosures under the Act;
1.5 Policies framed under the Act ;
1.6 Register maintained under the Act;
1.7 Forms and returns filed with the ROC;
Information under section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) ofCompanies (Accounts)
Rules 2014 and forming part of the Directors' Report for the financial year ended 31stMarch 2017
I. CONSERVATION OF ENERGY : i The Company continues to take following initiativesto conserve Energy during the year 2016-17: a) Various machineries and equipmentsinstalled during earlier years besides increasing generation of steam tend to reduceconsumption of steam and fuel. b) Auto control combustion system fitted with all theboilers reduce the consumption of bagasse. c) VFDs are being installed at several workingstations like Cane carrier rake carrier etc. that will result in power saving. d) Themodified system of heating sugarcane juices and bleeding of vapors for pan boiling isworking satisfactorily in the form of considerably reducing consumption of steam and fuel.ii. Additional investments and proposals if any being implemented for reduction ofconsumption of energy:
In view of lesser availability of funds the Company does not intend to commit it'salready strained financial resources towards implementation of energy reduction programmesthough the Company shall continue to use its existing resources and implement conventionalmethods to substantially reduce consumption of energy. iii. Impact of measures of I and IIabove for the reduction of energy consumption and consequent impact on the cost ofproduction of goods.
II. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
The Company continues to carry out Research & Development in the following specificareas:
(1) Control of Insect Pest and Disease- a) Through Moist Hot Treatment- Inorder to maintain the genetic purity of varieties of Sugarcane treatment is given to caneseed with moist hot air treatment. It improves the quality and yield of sugarcane. Thisprocess shall continue for the future also. b) Chemical Control:- In order tocontrol the Insect Pest and Borer insecticide and pesticide is being applied on the cropjust before indent of Pest and Borer for its control. c) Biological Control of Borer:- Parasites(Tricogranna Cards) have been applied in the crop to protect from Insects Pests andBorers.
(2) Ratoon Management :- To increase the yield of the Ratoon farmers are beingeducated on constant basis to burn the trash in the field stubbing the plant and givingthe proper dose of fertilizers and irrigation. Farmers are educated also to fill the gapsby new and improved plants.
Owing to above efforts higher yield of disease free cane is being made available tothe Company's sugar mills resulting in higher return to cane growers as well as to theCompany. This has also contributed to higher recovery of cane.
The Company has not imported any new technology.
The Company had incurred an expenditure on research and cane development amounting toRs 63.78 lacs
III. FOREIGN EXCHANGE EARNINGS AND OUTGO :
|a) Activities relating to exports initiatives taken to increase exports || |
|b) Development of new export markets for products and services and export plan || |
|c) Earnings in Foreign Exchange (FOB Value) ||Rs Nil |
|d) Expenditure in Foreign Currency ||Rs 75.27 lacs |
Particulars of Employees pursuant to Section 134(3)(q) of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
|Sl. ||Requirements of Rule 5(1) ||Details |
|(i) ||The ratio of remuneration of each Director to the median remuneration of the employees of the Company for the financial year ||None of the Directors except the Whole-time Director gets any remuneration from the Company except sitting fees. |
|(ii) ||The percentage increase in remuneration of each Director Chief Financial Officer Company Secretary ||Refer Note* |
|(iii) ||Percentage increase in the median remuneration of employees in the financial year ||Refer Note* |
|(iv) ||Number of permanent employees on the rolls of company; ||1927 employees as on 31.3.2017. |
|(v) ||Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration ||Refer Note* |
|(vi) ||Affirmation that the Remuneration paid during the financial year 2016-17 were within the remuneration is as per the remuneration policy of the Company parameters of the Remuneration Policy adopted by the Company. || |
Note: *Employees on the rolls of erstwhile The Oudh Sugar Mills Limited Hargaon Rosaand Hata units and the employees on the rolls of Upper Ganges Sugar & IndustriesLimited Seohara unit stands transferred pursuant to the Composite Scheme of Arrangementon filing of the Scheme with ROC on 23rd March 2017 and hence not comparable.
Particulars of Employees pursuant to Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
Top 10 employees in terms of remuneration drawn during the year
|Name ||Designation/ Nature of Duties ||Qualification ||Age ||Experience (years) ||Gross Remuneration (Rs) ||Previous employment & position held ||No of shares held |
|Mr. Chand Bihari Patodia ||Advisor ||Intermediate ||68 ||49 ||21617465 ||The New Swadeshi Sugar Mills Narkatiaganj ||- |
|Mr. Dilip Patodia ||President (Finance) & Chief Financial Officer ||B.Com ACA ACS ||51 ||26 ||8722000 ||Rashmi Metallics Ltd. ||- |
|Mr. Devendra Kumar Sharma ||Wholetime Director ||M.Com AICWA ||48 ||26 ||6872000 ||Kesar Enterprises Ltd. ||- |
|Mr. Anand Sharma ||Vice President (Legal) & Company Secretary ||B.Com FCS LLB ||45 ||21 ||5777000 ||Adhunik Metaliks Ltd. ||- |
|Mr. Sukhvir Singh ||Executive President Seohara ||BSC ||56 ||23 ||5307208 ||Bajaj Hindusthan Ltd. Noida ||- |
|Mr. Mahesh Agarwal ||Finance Controller ||BSC ACA ||50 ||24 ||4334799 ||- ||- |
|Mr. S.K.Maheshwari ||Executive Vice President (Finance) Seohara ||BSC ACA ||61 ||36 ||3360542 ||Hindustan Times Ltd.New Delhi ||4 |
|Mr.Poresh Kumar Saini ||Executive President Hata ||B.A & PGDBM ||65 ||40 ||3250000 ||Uttam Sugar Mills Ltd ||- |
| || || || || || ||Libberhari || |
|Mr. B. K. Malpani ||Executive President Rosa ||Post Graduation ||70 ||48 ||3075691 ||Upper Ganges Sugar & Ind. Seohara ||318 |
|Mr. Praveen Agarwal ||Sr. Executive Vice President Seohara ||Diploma In Engineering ||54 ||30 ||2812435 ||- ||- |
1. The remuneration includes salary Company's contribution to provident fund andperquisite value of rent paid.
2. The appointment is contractual.
3. Other terms and conditions are as per rules of the Company.
4. No employee is a relative of any Director or Key Managerial Personnel of theCompany. Rule 5(20(iii) of the captioned Rules is not applicable.
| ||For and on behalf of the Board |
|Kolkata ||Chandra Shekhar Nopany |
|Dated 23rd May 2017 ||Co-Chairperson |