Your Directors present herein the Twenty-Ninth Annual Report on the operationsof your Company and the Audited Statement of accounts for the year ended 31 March 2016.
|FINANCIAL SUMMARY ||Rs. In Crores |
|Particulars ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Total Revenue ||369.72 ||381.25 |
|Profit before Interest Depreciation and Tax ||47.44 ||7.15 |
|Interest and Finance Charges ||66.63 ||66.50 |
|Cash Profit / (Loss) ||(19.19) ||(59.33) |
|Depreciation ||20.59 ||21.20 |
|Profit/(Loss) before Tax ||(39.78) ||(80.55) |
|Deferred Tax-Asset/(Liability)/ || || |
|MAT Reversal ||28.07 ||6.39 |
|Profit/(Loss) After Tax ||(11.71) ||(74.16) |
|Dividend proposed ||- ||- |
|Dividend Tax ||- ||- |
|Transfer to General Reserve ||- ||- |
|Profits / (Loss) Brought forward from last year ||(48.14) ||26.02 |
|Profit/(Loss) carried forward to Balance Sheet ||(59.85) ||(48.14) |
Financial Performance : During the year under review the total income was Rs.369.72 crores as against Rs.381.25 crores in the previous year. Gross profit for the yearwas Rs.47.44 crores against the profit of Rs.7.15 crores in the previous year. Theinterest for the year was Rs.66.63 crores against Rs.66.50 crores in the previous year.After providing for interest the operations have resulted in a Cash loss of Rs.19.19crores as against the cash loss of Rs.59.33 crores in the previous year. The net lossafter depreciation and tax has decreased to Rs.11.71 crores as against the loss of Rs74.16 crores in the previous year.
The sugar industry has been facing glut in sugar during the last few years due tocontinuous excess production of sugar both in domestic and international level. The sugarrealization has fallen below the cost of production. On account of this most of the sugarmills in the country have incurred huge loss. From November 2015 the sugar price hasstarted improving and presently hovers around Rs 3400/qtl. We expect the price to furtherimprove in the coming months and the performance is also expected to improvesubstantially.
Sugar: During the year under review the Company has crushed 10.51 lakh tonnes of caneas against 10.58 lakh tonnes of cane in the previous year. Consequently the total sugarproduction was 9.24 lakh qtls as against 9.67 lakh qtls in the previous year. The totalsugar sold was 10.85 lakh qtls as against 9.59 Lakh qtls in the previousyear. The average free sale sugar realization for the year ended was Rs. 2413/- qtl asagainst the average realization of Rs.2914/- qtl in the previous year.
Power: During the year under review the total power generation was 1179 lakh units asagainst 947 lakh units in the previous year. The export to the TNEB grid was 783 lakhunits as against 604 lakh units in the previous year. During this period the powergeneration was higher mainly on account of using coal for generation of power from UnitIII and exporting to the grid under short term open access contract with TANGEDCO.
Industrial Alcohol: During this period under review the production of industrialAlcohol was 159.92 lakh liters as against 129.15 lakh liters in the previous year. Thetotal alcohol sold was 152.98 lakh liters as against 139.87 lakh liters in the previousyear. The average realization was Rs. 37.60 per liter as against Rs.42.03 per liter in theprevious year.
No amount is proposed to be transferred to General Reserves account on account oflosses.
Due to absence of profits in the current year the Board of Directors is unable torecommend any dividend for the year 2015-16.
There is no change in the Share Capital of the Company either in the Authorised Capitalor in the Issued Capital. The paid up equity capital as on March 31 2016 wasRs.293898460. The Company has not issued any shares during the period. However theCompany proposes to convert the unsecured loans brought in pursuant to CDR approvals intoequity at the appropriate time as advised by the Lenders.
EXTRACT OF ANNUAL RETURN
Extract of the Annual Return in form MGT-9 is attached herewith. Annexure - I
During the year 2015-16 five Board Meetings were held on 27.05.2015 13.08.201512.11.2015 11.02.2016 and 26.03.2016.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs Visalakshi Periasamy (DIN 00064517) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for reappointment.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors state that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 ofthe profit or loss of the Company for the year under review.
iii) The directors have taken proper and suf cient 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.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
Declaration of Independent Directors
The independent directors have submitted their declaration as per Sec.149(7) that theycontinue to meet the criteria of independence as provided in Sec.149 (6).
POLICY ON DIRECTOR APPOINTMENT & REMUNERATION POLICY
The Remuneration policy of the Company comprising the appointment and remuneration ofthe Directors Key Managerial Personnel and Senior Executives of the Company includingcriteria for determining quali cations positive attributes independence of a Directorand other related matters has been provided in the Corporate Governance Report which isattached as Annexure-II to this Report.
There are no quali cations reservations or adverse remarks in the Auditorsreport. The observations made in the Auditors Report read together with relevantnotes thereon are self-explanatory and do not call for any further comments under Section134 of the Companies Act 2013.
M/s Srinvasan & Shankar Chartered Accountants Chennai (FRN 005093S) Chennairetire as Statutory Auditors on the conclusion of this Annual General Meeting. They can becontinued for a further period of 1 year though they have completed the two terms of 5years each on 31.03.2014. They have conveyed their consent for re-appointment and havealso furnished the required declaration as required in Section 139 of the Act.
Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Mr M Damodaran and Associates Company Secretaries in practice to undertake theSecretarial Audit of the Company. Their Audit report is annexed herewith as"Annexure". There were no quali cations or observations requiring Boardcomments.
LOANS GUARANTEES OR INVESTMENTS
Your Company has not given any loans or provided any guarantees or acquired securitiesas de ned in Section 186 of the Companies Act 2013.
CONTRACTS ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)
All transactions entered into by the Company with Related Parties were in the OrdinaryCourse of Business and at arms Length pricing basis. The Audit Committee grantedomnibus approval for the transactions (which are repetitive in nature) and the same wasreviewed by the Audit Committee and the Board of Directors. There were no materiallysignificant transactions with Related Parties during the financial year 2015-16 which werein con ict with the interest of the Company or which requires the approval ofshareholders. Suitable disclosures as required under AS-18 have been made in Note 24.4.11of the Notes to the financial statements. Details of the transactions are provided in FormAOC-2 which is attached as Annexure-III to this Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thereport. The Company has issued 1540154 equity shares of Rs.10/- each with a premium of
Rs.12/- per share in the share allotment committee meeting held on 14.5.2016 on apreferential basis by converting a part of the unsecured loans with the approval of theshareholders as advised by the Lenders throfithe CDR Scheme and this will reduce theCompanys liability towards payment of interest on the unsecured loans. Consequent tothis allotment the paid up share capital has gone up to Rs. 3093.00 lakhs.
The Audit committee consists of the following Directors.
|1. Mr P S Gopalakrishnan ||Independent Director |
|2. Mr T Pitchandi ||Independent Director |
|3. Dr S Muthu ||Independent Director |
|4. Dr K C Reddy ||Nominee Director (IREDA) |
|5. Mr A Sennimalai ||Non Executive Director |
The Committee met 5 times on 27.05.2015 13.08.2015 13.11.2015 11.02.2016 and26.03.2016.
There were no instances where the board has not accepted the recommendations of theAudit Committee.
FOREIGN EXCHANGE EARNINGS AND OUT-GO CONSERVATION OF ENERGY & TECHNOLOGYABOSORPTION
The details of measures taken for conservation of energy technology absorptionforeign exchange earnings and outgo are given in the Annexure.
The Company does not have any subsidiary or any associate Company. Hence no report onsubsidiary associate joint fiventure Company is included.
RISK MANAGEMENT POLICY
The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) ofthe Companies Act 2013 details of the Policy are disclosed in the Companys Website.
At present the Company has not identi ed any element of risk which may threaten theexistence of the Company.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Companys operations in future.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal financial Control System commensurate with the size scaleand complexity of its operations. The scope and authority of the Internal Audit functionis de ned by the Audit Committee. To maintain its objectivity and independence theInternal Auditor reports to the Chairman of the Audit Committee of the Board & to theChairman of the Company.
The Internal Audit Department monitors and evaluates the ef cacy and adequacy ofinternal financial control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company. Based on the report ofinternal audit function process owners undertake corrective action in their respectiveareas and thereby strengthen the financial controls. Significant audit observations ifany and recommendations along with corrective actions thereon are presented to the AuditCommittee of the Board.
During the year 2015-16 no amount was collected as deposits as de ned in Section 73 and74 of chapter V of the new Companies Act 2013. Your Company has complied with theprovisions of Sec.73 & 74 and the rules prescribed thereunder. Your Company has nounpaid deposits which were due or repayable as on 31 March 2016. Your Company has notdefaulted in repayment of the deposits on the due dates. As on the date of this reportthere are no unclaimed deposits.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As per section 135 of the Companies Act a Corporate Social Responsibility (CSR)Committee has been formed. CSR policy has been framed and is available on the Website.Members of the Committee are:
(1) Mr. P. S. Gopalakrishnan
(2) Mr. A. Sennimalai
(3) Mr. M. Ramalingam
However as the average of the net profits for the last 3 years is negative noexpenditure has been earmarked on this account.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Nomination & Remuneration Committees as also the IndependentDirectors. The manner in which the evaluation has been carried out is attached in theAnnexure IV.
VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
Pursuant to Section 177(9) and 177(10) of the Companies Act 2013 read with Rule 7 ofthe Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of theListing Obligation and Disclosure Requirement Regulations 2015 the Board of Directors hadapproved a Policy on Vigil Mechanism/ Whistle Blower and the same is hosted on the websiteof the Company. This Policy inter-alia provides a direct access to the Chairman ofthe Audit Committee.
Your Company hereby af rms that no Director/ employee have been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
Your Company is in compliance with the Corporate Governance regulations as laid out inSEBI (Listing Obligation and Disclosure Requirement) Regulations 2015. A report onCorporate Governance in line with SEBI prescribed format incorporated in the ListingObligations and Requirement Regulations is attached herewith. A certi cate from theStatutory Auditors on compliance of conditions of Corporate Governance has been obtainedand copy enclosed to this report.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company.
The Code has been posted on the Companys website www.dharanisugars.in
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.
All the Board Members and the Senior Management personnel have con rmed compliance withthe Code. All Management Staff were given appropriate training in this regard.
PREVENTION OF SEXUAL HARASSMENT
The Company has in place an Anti Sexual harassment policy in line with the requirementsof the Section 4 of the Sexual harassment of Women at Work Place (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received about sexual harassment. All employees are covered under this policy.Details have been displayed prominently in the work place and also in the CompanysWebsite.
No complaints were received during the year 2015-16.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Annexure attached in the Boards Report
PROHIBITION OF INSIDER TRADING
The Company has adopted a Code of disclosures & a Code of Conduct for Prohibitionof Insider Trading with a view to regulate trading in securities by the Directors anddesignated employees of the Company. The Code requires pre-clearance for dealing in theCompanys shares and prohibits the purchase or sale of Company shares by theDirectors and the designated employees while in possession of unpublished price sensitiveinformation in relation to the Company and during the period when the Trading Window isclosed. The Board is responsible for implementation of the Code.
Directors of the Board and the designated employees have con rmed compliance with theCode.
The Board of Directors places on record its appreciation of the support assistance andco-operation received from the Central Government Government of Tamil Nadu variousgovernmental agencies ICICI Bank Limited IREDA the Companys bankers Indian BankState Bank of India The South Indian Bank Limited Bank of India Central Bank of IndiaThe Federal Bank Limited Union Bank of India IDBI Bank Ltd and Indian Overseas Bank.
The Board of Directors also wishes to place on record its appreciation for the canegrowers without whose help and support it could not have achieved the progress that hasbeen made so far. With our encouragement and their initiative we hope for improved caneavailability for the ensuing years.
Your Directors are thankful to the employees of the Company for their wholeheartedco-operation and unstinted dedication to duty leading to cordial industrial relationsduring the year under review.
The Board is thankful and grateful for the continuing cooperation to the managementfrom the shareholders family since inception and is con dent that this partnership willsustain forever.
for and on behalf of the Board of Directors
DR PALANI G PERIASAMY
Dated: 26th May 2016