Your Directors have pleasure in presenting the 33rd Annual Report of the companytogether with audited financial statements for the year ended 31st March 2017
(Rs in lakhs)
| ||Financial Year |
|Financial Results || || |
| ||2016-17 ||2015-16 |
|Profit for the year before depreciation ||25630.74 ||9132.52 |
|Less: Depreciation ||6945.21 ||6154.07 |
|Profit Before Tax ||18685.53 ||2978.45 |
|Less: Provisions: Current Tax ||4005.24 ||634.99 |
|MAT Credit Entitlement ||(4005.24) ||(634.99) |
|Deferred Tax ||4168.98 ||(193.68) |
|Profit After Tax ||14516.55 ||3172.13 |
|Add : Surplus brought forward from previous year ||3080.33 ||2250.47 |
|Amount available for appropriation ||17596.88 ||5422.60 |
|Appropriations || || |
|Provision for diminution in value of investment (Long term) || ||(1.94) |
|Dividend paid on equity shares (for the respective previous financial year as per IND AS) ||857.98 ||285.99 |
|Tax on Dividend paid (for the respective previous financial year as per IND AS) ||174.66 ||58.22 |
|Transfer to General Reserve ||12000.00 ||2000.00 |
|Surplus carried over to Balance Sheet ||4564.24 ||3080.33 |
|TOTAL ||17596.88 ||5422.60 |
Indian Accounting Standard (IND AS)
The Indian Accounting Standards (Ind AS) prescribed under Companies (Indian AccountingStandards) Rules 2015 as amended by the Companies (Indian AccountingStandards)(Amendment) Rules 2016 are applicable to your company with effect from 1.4.2016with a transition date of 1.4.2015. Your company has accordingly prepared the financialaccounts for the financial year ended 31.3.2017 by following the Indian AccountingStandards (Ind-AS). The financial results for the financial year 2015-2016 are adjusted/reconciled in accordance with Ind-AS
Your Directors are glad to recommend dividend @ Rs.12.50 per share on 12539700equity shares of Rs.10/- each.
Review of Operations
During the year under review the aggregate cane crush was 28.59 lakh tones compared to35.44 lakh tones in the previous year. The overall recovery also dropped from 9.57% to9.11%. Consequently sugar production was lower at 26.31 lakh quintals compared to 33.82lakh quintals in the previous year. Lower cane crush and drop in recovery was mainly dueto continuous drought and low yield.
The Co-generation plants had generated 376.51 million units of power and exported255.83 million units of power to grids compared to the generation of 424.72 million unitsand export of 292.23 million units in the previous year. Lower generation was mainly dueto lower cane crush resulting in lower bagasse availability.
During the year the alcohol production had slightly increased from 28.70 millionB.Ltrs in the previous year to 30.74 million B.Ltrs.
In the Granite Processing Unit 178667 square metres of Granite Slabs and 16180square metres of Tiles were produced compared to production of 128150 square metres ofGranite Slabs and 38262 square metres of Tiles in the previous year.
Wind Mills had generated 15.13 million units of power and exported 13.13 million unitsto grid compared to the generation of 8.61 million units and export of 7.50 million unitsin the previous year.
Increase in share capital
Pursuant to the Scheme of Amalgamation of Madras Sugars Limited with the companyapproved by the Hon'ble High Court of Judicature at Madras company has allotted 1100000equity shares of Rs.10/- each to the shareholders of M/s Madras Sugars Limited on10.2.2017. Consequently the paid up share capital of the company has been increased fromRs. 114397000/- to Rs. 125397000/-
Prospects for the Current year 2017 2018
It is estimated to crush 21 lakh tonnes of sugarcane in aggregate. Sugarcaneavailability is the major concern in the current year on account of continued drought andlow yield. Performance of co-generation plant will be based on bagasse availability in thesugar mills. It is estimated to produce 28.75 million B.Litres of alcohol in theDistillery Units. Improved working results are expected in the Distillery and GraniteDivision. The sugar prices are expected to be steady at current level.
Directors and Key Managerial Personnel
In accordance with the provisions of Companies Act 2013 read with the Articles ofAssociation of the Company Sri S V Balasubrmaniam is liable to retire by rotation and heis eligible for re-appointment.
All the independent directors have given declarations that they meet the criteria ofindependence as specified under Section 149 (6) of the Companies Act 2013. AllIndependent Directors hold office for a fixed term of five years and are not liable toretire by rotation.
The Company has devised a policy on director's appointment remuneration and forperformance evaluation of independent directors Board Committees and other individualdirectors which include performance evaluation of non-executive and executive directors.
The details of programmes for familiarization of independent directors with thecompany their roles rights responsibilities in the company nature of the industry inwhich the company operations business models and related matters are placed on thewebsite of the company at the link http://www.bannari.com/ InvestorInformation.html
Particulars of Loans Guarantees or Investments
During the year the company has not made any loan or guarantee or investment orprovided any security under Section 186 of the Companies Act 2013.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy Technology absorption ForeignExchange earnings and outgo as required to be disclosed under the Companies Act 2013 areprovided in Annexure I to this Report.
Particulars of Employees
The information required as per Section 197 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnished inAnnexure II forming part of this Report
Meetings of the Board
Six Meetings of the Board of Directors were held during the year. The details arefurnished in the Report on Corporate Governance attached herewith.
Committees and Policies
The company has constituted Board Committees and framed policies as required under theprovisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The details are furnished in the Corporate GovernanceReport attached herewith.
Corporate Governance and Management Discussion and Analysis Report
A separate section on Corporate Governance Management Discussion and Analysis Reportand a certificate from the Auditors of the company regarding compliance of conditions ofCorporate Governance as required under the provisions of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 are annexed asAnnexure III
Corporate Social Responsibility Committee
Pursuant to Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 the company has formulated a policy on CorporateSocial Responsibility. Your Company's CSR Policy statement and annual report on the CSRactivities undertaken during the financial year ended 31st March 2017 in accordance withSection 135 of the Companies Act 2013 and Companies (Corporate Social ResponsibilityPolicy) Rules 2014 are attached as Annexure IV to this report.
Risk Management / Risk Management policy
As per Regulation 21 of the SEBI (LODR) Regulations 2015 constitution of RiskManagement Committee is not mandatory for the company. However the company has RiskManagement Committee and has formulated a Risk Management Policy including risk assessmentand minimization procedures The Risk Management Committee has been assigned with thefunctions of monitoring and reviewing the risk management plans of the company. In theopinion of the Board no element of risk that may threaten the existence of the company hasbeen identified
Vigil Mechanism/Whistle Blower Policy
The company has established vigil mechanism for Directors and Employees to reportconcerns about the unethical behavior actual or suspected incidents of fraud or violationof the code of conduct or ethics policy. The Whistle Blower Policy is posted in thecompany's website at the link http://www.bannari.com/InvestorInformation.html
Dividend Distribution Policy
Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements)(Second Amendment) Regulations 2016 top 500 listed companies has to formulate a DividendDistribution Policy. Accordingly the Board of Directors at its meeting held on 14.2.2017formulated and adopted the Dividend Distribution Policy. The policy is posted in thecompany's website at the link http://www.bannari.com /InvestorInformation.html
Related Party Transactions
All the related party transactions are entered on arm's length basis and are incompliance with the applicable provisions of the Companies Act 2013 and other relevantRegulations as referred under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. There is no materially significant related party transaction made bythe company with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict with the interest of the company at large and therefore disclosure inForm AOC-2 is not required. All the related party transactions are placed before the AuditCommittee and approved by the Audit Committee. The Related Party Transactions Policy asapproved by the Board is uploaded on the company's website http://www.bannari.com /InvestorInformation.html
The details of transactions with Related Parties are provided in the accompanyingfinancial statements.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 IndependentDirectors at their meeting held on 14.2.2017 without participation of non-independentdirectors and management considered and evaluated the Boards' performance performance ofthe Chairman and Managing Director.
The criteria applied in the evaluation process are detailed in the Corporate GovernanceReport which forms part of this report. The Board has carried out an annual evaluation ofits own performance of the individual directors as well as the Committees of Directors.
Material changes and commitments
There is no material change or commitment affecting the financial position of yourCompany which have occurred between the end of the financial year March 31 2017 and thedate of this report.
Directors' Responsibility Statement
As stipulated in Section 134(3)(c) and 134 (5) of the Companies Act 2013 your Directorsconfirm that
(a) in the preparation of the annual accounts all the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(b) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitof the company for that period;
(c) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the annual accounts on a going concern basis;
(e) they had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and
(f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Business Responsibility Report (BRR)
Securities Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 prescribes that top 500 companies based on market capitalization as perNSE/BSE as 31st March of every financial year are required to have "BusinessResponsibility Report" (BRR) as part of their Annual Report. As the company isamongst the top 500 companies based on the market capitalization as on 31.3.2017 thereport has been prepared as prescribed. The BRR is annexed as Annexure V to this reportand forms part of this Annual Report.
Extract of Annual Return
The extract of Annual Return in MGT 9 is annexed as
Auditors / Auditors' Report
M/s. P N Raghavendra Rao & Co the present auditors of the company retire at theensuing Annual General Meeting. They have served as statutory auditors of the Company fora period of more than 10 years in rotation. Pursuant to Section 139(2) of the CompaniesAct 2013 read with rule 6(3) of Companies (Audit and Auditors) Rules 2014 it ismandatory to change the auditors of the company.
The Board of Directors on the recommendation of the Audit Committee has proposed toappoint M/s. P. K. Nagarajan & Co. Chartered Accountants Coimbatore as the StatutoryAuditors of the company for a period of five years at the ensuing Annual General
Meeting. M/s P K Nagarajan & Co. Chartered Accountants have consented for the saidappointment and has submitted necessary certificates in compliance of Section 139 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.
The Auditors' Report given by M/s P N Raghavendra Rao & Co. the present auditorson the financial statements of the company does not contain any qualification reservationor adverse remark.
Secretarial Auditors and Secretarial Audit Report
M/s C Thirumurthy & Associates Company Secretaries Coimbatore has been appointedas Secretarial Auditor to conduct secretarial audit for the financial year 2016-2017. TheReport of Secretarial Auditors is annexed to this report as Annexure VII. The Report doesnot contain any qualification reservation or adverse remark.
Internal Control Systems and their Adequacy
Details of internal control system and their adequacy are provided in the ManagementDiscussion Analysis Report attached herewith.
Sri M Nagarajan Cost Accountant Coimbatore was appointed as Cost Auditor to conductaudit of cost accounting records for the financial year 2016-17.
The relationship with employees continued to remain cordial throughout the year underreview
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transaction on these items during the year under review :
i) Details relating to deposits covered under Chapter V of the Act.
ii) Issue of equity shares with differential rights as to dividend voting orotherwise.
iii) Issue of shares (including sweat equity shares) to employees of the company underany scheme.
iv) No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review no cases were filedpursuant to the Sexual Harassment or Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors acknowledge with gratitude the timely assistance and help extended bythe Government of India Governments of Tamilnadu and Karnataka Banks Karnataka PowerTransmission Corporation Limited and Tamilnadu Electricity Board. Your Directors thank thecane growers who have supplied sugarcane to the factories and wish to place on recordtheir appreciation of the contributions made by all the employees.
| ||By order of the Board |
| ||S V BALASUBRAMANIAM |
|Coimbatore ||Chairman |
|10.08.2017 ||DIN : 00002405 |
ANNEXURE - I
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSAND OUTGO REQUIRED UNDER THE COMPANIES (ACCOUNTS) RULES 2014
(A) Conservation of energy :
(i) The steps taken or impact on conservation of energy :
Falling film Evaporators are replaced instead of Semikestners and direct contactheaters instead of Tubular heaters to reduce the steam & power consumption.
Mechanical circulators are added for all batch pans to save time and steam.
All motors are replaced by energy efficiency (IE3) motors with Variable Frequency drive(VFD) to save power.
Vapour line juice heaters and plate heat exchangers are installed to recover heat fromEvaporator V body and condensate water respectively.
(ii) The steps taken by the company for utilizing alternate sources of energy :
Pan boiling vapour from III and IV body evaporator to be used instead of II bodyevaporator vapour
(iii) The capital investment on energy conservation equipments :
(B) Technology absorption-
(i) The efforts made towards technology absorption:
(ii) The benefits derived like product improvement cost reduction productdevelopment or import substitution :
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year):
The company has not imported any technology during the last three years.
(iv) The expenditure incurred on Research and Development : Rs. 35.19 Lakhs
(C) Foreign exchange earnings and outgo :
The Foreign Exchange earned in terms of actual inflows during the year : Rs. 5989.08lakhs
The Foreign Exchange outgo during the year in terms of actual outflows : Rs. 1890.99lakhs
| ||By order of the Board |
| ||S V BALASUBRAMANIAM |
|Coimbatore ||Chairman |
|10.08.2017 ||DIN : 00002405 |