Naraingarh Sugar Mills Ltd.
|BSE: 531457||Sector: Agri and agri inputs|
|NSE: N.A.||ISIN Code: INE491E01015|
|BSE 05:30 | 01 Jan||Naraingarh Sugar Mills Ltd|
|NSE 05:30 | 01 Jan||Naraingarh Sugar Mills Ltd|
|BSE: 531457||Sector: Agri and agri inputs|
|NSE: N.A.||ISIN Code: INE491E01015|
|BSE 05:30 | 01 Jan||Naraingarh Sugar Mills Ltd|
|NSE 05:30 | 01 Jan||Naraingarh Sugar Mills Ltd|
The Shareholders of Naraingarh Sugar Mills Limited Naraingarh
Your Directors are pleased to present the 24th Annual report of your company alongwithaudited annual accounts of the company for the period ended 31st March 2017.
OPERATIONS A FINANCIAL RESULTS
Rs in Lacs
It is informed that during the current financial year the company achieved a totalincome of Rs. 18894.98 Lacs which is approximately 11.82% higher than the previous yearfigure of Rs 16898.07 Lacs. The company had a profit after tax of Rs. 996.35 Lacs comparedto net loss after tax of Rs. 492.46 lacs during last financial year. The comparativefigures of Cane crushed and recovery during the current year and last year are givenhereunder: -
Your company had been achieving profits despite overall poor performance of theindustry in last 4-5 years but the worsening domestic and international market conditionof sugar prices has led to losses in the last financial year The management is taking keeninterest in upgrading the technology and performance of the sugar manufacturing unit.
The company's 25MW capacity Bagasse based cogeneration power plant is at completionstage and shall be operational in the coming season. Besides the company has started in aphased manner the process to enhance the crushing capacity to 5500 TCD from the existing4000 TCD as per the proposed plans.
The proposed integrated project shall improve the quality of sugar for meeting thenational and international standards while operating at optimum levels thereby reducingthe manufacturing costs and shall also provide raw material for cogen power plant in theform of Bagasse. In other words this expansion and modernization program shall lend a newlease of life to the sugar factory beginning from the coming season.
Your Board hopes to improve in the years to come in the way of above mentionedmodernization project.
THE BOARD DIRECTORS
Change in Directorship & KMP
Mr. Sandeep Singh was promoted as the whole time Director of the company w.e.f 17thOctober 2015 and was regularized in the 23rd annual general meeting on 28th December 2016.
Mr.AmanHanda Independent Director of the company had resigned from the said post w.e.f25th August 2016.
Mr. Yogesh Jain was appointed as the Additional Director (independent) of the companyw.e.f 3rd September 2016 and was regularized in the 23rd annual general meeting on 28thDecember 2016.
Mr. Rahul Pabreja was appointed as the Additional Director (independent) of the companyw.e.f 2nd December 2016 and was regularized in the 23rd annual general meeting on 28thDecember 2016 but due to his personal reasons he resigned on 7th February 2017.
Mrs. Satinder Kaur Bedi was appointed as the Additional Director (independent) of thecompany w.e.f 2nd December 2016 and was regularized in the 23rd annual general meeting on28th December 2016.
Mrs. Renu Anand Director of the company had resigned from the said post w.e.f 2ndDecember 2016.
Mr.Vijay Kumar Company Secretary resigned wef.lst June 2016 and Ms.Rangoli Aggarwalholds the office of Company secretary wef. 1 st June 2016.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations2015 a system has been put in place to carry outperformance evaluation of the Board its Committees and individual Directors.Criteria forperformance evaluation is covered in the Corporate Governance Report
Directors to retire by rotation
In terms of Articles of association of the company Mr. Sandeep Singh shall retire byrotation and being eligible offers himself for re-appointment at the ensuing annualgeneral meeting.
DIRECTORS' RESPONSIBILITY STATEMENT
Following is the Directors' Responsibility Statement as required under section 134(4)of the Companies Act 2013 in respect of the Financial Statements the directors confirm:
a) in the preparation of Annual Accounts for the financial year ended 31st March 2017the applicable accounting standards have been followed;
b) in the selection of accounting policies consulted the Statutory Auditors andapplied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2017 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for maintenance of adequate accountingrecords in acordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) internal financial controls to be followed by the Company have been laid down whichare adequate and operating
f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.The directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and perating effectively
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and Regulation*^ of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
Remuneration to Executive Directors:
The remuneration paid to Executive Directors is recommended by the Nomination andRemuneration Committee and approved by the Board in Board meeting subject to thesubsequent approval of the shareholders at the General Meeting and such other authoritiesas may be required. The remuneration is decided after considering various factors such asqualification experience performance responsibilities shouldered industry standards aswell as financial position of the Company.
This Nomination Remuneration and Evaluation Policy (the "Policy") applies tothe Board of Directors (the "Board") of NARAINGARH SUGAR MILLS LIMITED (the"Company").
This Policy is in compliance with Section 178 of the Companies Act 2013 read alongwith the applicable rules thereto. The primary objective of the Policy is to provide aframework and set standards for the nomination remuneration and evaluation of theDirectors and officials as may be prescribed. The Company aims to achieve a balance ofmerit experience and skills amongst its Directors and Senior Management.
1.1 The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel.
1.2 The Board has delegated responsibility for assessing and selecting the candidatesfor the role of Directors to the Nomination and Remuneration Committee which makesrecommendations & nominations to the Board.
2. Nomination and Remuneration Committee
The Nomination and Remuneration Committee is responsible for:
2.1. reviewing the structure size and composition (including the skills knowledge andexperience) of the Board at least annually and making recommendations on any proposedchanges to the Board to complement the Company's corporate strategy with the objective todiversify the Board;
2.2. recommending to the Board on the selection of individuals nominated fordirectorship;
2.3. making recommendations to the Board on the remuneration payable to the Directorsso appointed/reappointed;
2.4. assessing the independence of independent directors;
2.5 such other key issues/matters as may be referred by the Board or as may benecessary in view of the provision of the Companies Act 2013 and Rules there under.
2.6 to make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract
2.7 ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks;
The Nomination and Remuneration Committee comprises of the following:
a) The Committee shall consist of a minimum 3 non-executive directors majority of thembeing independent.
b) Minimum two (2) members shall constitute a quorum for the Committee meeting.
c) Membership of the Committee shall be disclosed in the Annual Report.
d) Term of the Committee shall be continued unless terminated by the Board ofDirectors.
a) Chairman of the Committee shall be an Independent Director.
b) In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.
c) Chairman of the Nomination and Remuneration Committee meeting could be present atthe Annual General Meeting or may nominate some other member to answer the shareholders'queries.
COMMITTEE MEMBERS' INTERESTS
a) A member of the Committee is not entitled to be present when his or her ownremuneration is discussed 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 presentat the meetings of the Committee.
a) Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
b) In the case of equality of votes the Chairman of the meeting will have a castingvote.
3. Appointment of Directors
3.1 Enhancing the competencies of the Board and attracting as well as retainingtalented employees for role of directors and at other senior positions in management arethe basis for the Nomination and Remuneration Committee to select a candidate forappointment to the Board. When recommending a candidate for appointment the Nominationand Remuneration Committee has regard to:
assessing the appointee against a range of criteria which includes but not belimited to qualifications skills regional and industry experience background and otherqualities required to operate successfully in the position with due regard for thebenefits from diversifying the Board;
the extent to which the appointee is likely to contribute to the overalleffectiveness of the Board work constructively with the existing directors and enhancethe efficiencies of the Company;
the skills and experience that the appointee brings to the role of a directorand how an appointee will enhance the skill sets and experience of the Board as a whole;
the nature of existing positions held by the appointee including directorshipsor other relationships and the impact they may have on the appointee's ability to exerciseindependent judgment;
3.2 Personal specifications:
Degree holder in relevant disciplines; '
Experience of management in a diverse organization;
Excellent interpersonal communication and representational skills;
Demonstrable leadership skills;
Commitment to high standards of ethics personal integrity and probity;
Commitment to the promotion of equal opportunities community cohesion andhealthand safety in the workplace;
Having continuous professional development to refresh knowledge and skills.
4. Remuneration of Directors
The guiding principle is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors. The Directors' salaryshall be based & determined on the individual person's responsibilities andperformance and in accordance with the limits as prescribed statutorily if any.
The Nominations & Remuneration Committee determines individual remunerationpackages for Directors of the Company taking into account factors it deems relevantincluding but not limited to market business performance and practices in comparablecompanies having due regard to financial and commercial health of the Company as well asprevailing laws and government/other guidelines.
The Committee consults with the Chairman of the Board as it deems appropriate.
a) Base Compensation (fixed salaries) Must be competitive and reflective of theindividual's role responsibility and
experience in relation to performance of day-to-day activities usually reviewed on anannual basis; (includes salary allowances and other statutory/non-statutory benefitswhich are normal part of remuneration package in line with market practices
b) Variable salary: The Nomination and Remuneration Committee may in its discretionstructure any portion of remuneration to link rewards to corporate and individualperformance fulfillment of specified improvement targets or the attainment of certainfinancial or other objectives set by the Board. The amount payable is determined by theCommittee based on performance against pre-determined financial and non-financialmetrics.
ii) Statutory Requirements:
Section 197(5) provides for remuneration by way of a fee to a director for attendingmeetings of the Board of Directors and Committee meetings or for any other purpose as maybe decided by the Board.
Section 197(1) of the Companies Act 2013 provides for the total managerialremuneration payable by the Company to its directors including managing director andwhole time director and its manager in respect of any financial year shall not exceedeleven percent of the net profits of the Company computed in the manner laid down inSection 198 in the manner as prescribed under the Act. The Company with the approval ofthe Shareholders and Central Government may authorise the payment of remunerationexceeding eleven percent of the net profits of the company subject to the provisions ofSchedule V. The Company may with the approval of the shareholders authorise the payment ofremuneration upto five percent of the net profits of the Company to its anyone ManagingDirector/Whole Time Director/Manager and ten percent in case of more than one suchofficial. The Company may pay remuneration to its directors other than Managing Directorand Whole Time Director upto one percent of the net profits of the Company if there is amanaging director or whole time director or manager and three percent of the net profitsin any other case. The net profits for the purpose of the above remuneration shall becomputed in the manner referred to in Section 198 of - the Companies Act 2013
5. Independent Directors
5.1. The Independent Directors shall not be entitled to any stock option and mayreceive remuneration by way of fee for attending meetings of the Board or Committeethereof or for any other purpose as may be decided by the Board and profit relatedcommission as may be approved by the members.
The sitting fee to the Independent Directors shall not be less than the sitting feepayable to other directors.
5.2. The remuneration payable to the Directors shall be as per the Company's policy andshall be valued as per the Income Tax Rules.
6. Evaluation/Assessment of Directors of the Company -
The evaluation/assessment of the Directors of the Company is to be conducted usually onan annual basis. The following criteria may assist in determining how effective theperformances of the Directors have been:
Leadership & stewardship abilities
contributing to clearly define corporate objectives & plans
Communication of expectations & concerns clearly with subordinates
obtain adequate relevant & timely information from external sources.
regular monitoring of corporate results against projections
identify monitor 6t mitigate significant corporate risks
assess policies structures 8t procedures
direct monitor & evaluate senior officials
review management's succession plan
Evaluation on the aforesaid parameters will be conducted by the Independent Directorsfor each of the Executive/Non- Independent Directors in a separate meeting of theIndependent Directors. The Executive Director/Non-Independent Directors along with theIndependent Directors will evaluate/assess each of the Independent Directors on theaforesaid parameters. Only the Independent Director being evaluated will not participatein the said evaluation discussion.
Personal Specification for Directors
1. Qualification - Degree holder in relevant disciplines (e.g. management accountancylegal); or - Recognized specialist
2. Experience - Experience of management in a diverse organisation - Experience inaccounting and finance administration corporate and strategic planning or fundmanagement - Demonstrable ability to work effectively with a Board of Directors
3. Skills - Excellent interpersonal communication and representational skills -Demonstrable leadership skills - Extensive team building and management skills - Stronginfluencing and negotiating skills - Having continuous professional development to refreshknowledge and skill.
4. Abilities and Attributes - Commitment to high standards of ethics personalintegrity and probity - Commitment to the promotion of equal opportunities communitycohesion and health and safety in the workplace
5. Political inclinations and opinions.
AUDITORS STATUTORYAUDITORS '
M/ s KD & Associates Chartered Accountants (FRN No. 024293N) to hold office fromthe conclusion of this Annual General Meeting (AGM') until the conclusion of the fifthconsecutive AGM of the Company to be held in year 2022 (subject to ratification of theappointment by the Members at every AGM) at a remuneration to be determined by the Boardof Directors of the Company in addition to out of pocket expenses as may be incurred bythem during the course of the Audit
As required under the provisions of section 139(1) of the Companies Act 2013 theCompany has received a written consent from M/s KD a Associates Chartered Accountants totheir appointment and a Certificate >to the effect that their appointment if madewould be in accordance with the Companies Act 2013 and the Rules framed thereunder andthat they satisfy the criteria provided in section 141 of the Companies Act 2013.
The Members are requested to appoint the Statutory Auditors as aforesaid and fix theirremuneration.
The Auditors' Report does not contain any qualification reservation or adverse remark.
M/s Khushwinder Kumar & Co. Cost Accountants Jalandhar were appointed as CostAuditors for the financial year ended 31st March 2018. Their report shall be submitted tothe Department of Company Affairs Government of India in accordance with the requirementsof law.
Pursuant to the provisions of section 204 of the Companies Act2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s A. Arora & Co Company Secretary
(Certificate of Practice Number: 993) to undertake the Secretarial Audit of theCompany.
In terms of provisions of sub-section 1 of section 204 of the Companies Act 2013 theCompany has annexed to this Board Report asAnnexureA a Secretarial Audit Report given bythe Secretarial Auditor.
There are certain qualifications in secretarial audit report explained as follows:
1. the company had filed an application for a further extension of 1 month forconducting AGM on 17th November 2016 and the company has received rejection on 12thDecember 2016. Hence the company could not conduct the meting before 30th November.
2. The company is in the process of taking corrective measures.
3. The company is in the process of taking corrective measures.
TRANSFERTO RESERVES IN TERMS OF SECTION 134 (31 iJI OFTHE COMPANIES AC .2013
For the financial year ended 31 st March2017 the company has transferred Rupees868.42 lac to general reserves. DIVIDEND '
Keeping in view the financial constraints of the company your directors have decidednot to recommend any dividend for the year under review.
LOANS GUARANTEES AND INVESTMENTS
The Company has following Loans Guarantee given and Investments made under section 186of the Companies Act 2013 for the financial year ended 31st March 2017:
RELATED PARTY TRANSACTIONS
All related party transactions entered during the year were in Ordinary course ofbusiness and on Arm's Length basis. Further all the necessary details of transactionsentered with the related parties are attached herewith in form no. AOC-2 for your kindperusal and information. (Annexure: B).
The company has not invited any public deposits under section 58A 58AA of theCompanies Act 1956 during the financial year under review.
The Directors wish to place on record their appreciation of the earnest efforts andcontributions made by employees at all level for the smooth operation of the company.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financialcontrols with reference tofinancial statements commensuratewith the size scale and complexity of its operations.Duringthe year such controls were tested and no reportable materialweaknesses in thedesign or operation were observed.
Your Company has a rich legacy of ethical governance practicesmany of which wereimplemented by the Company even beforethey were mandated by law. Your Company iscommitted totransparency in all its dealings and places high emphasis onbusiness ethics. AReport on Corporate Governance alongwith a Certificate from the Statutory Auditors of theCompanyregarding compliance with the conditions of CorporateGovernance as stipulated underClause 49 of the ListingAgreementform part of this Annual Report.
The Vigil Mechanism as envisaged in the Companies Act 2013 the rules prescribedthereunder and the Listing Agreement isimplemented through the Company's Whistle BlowerPolicyto enable the Directors and employees of the Company torfeport genuine concerns toprovide for adequate safeguardsagainst victimisation of persons who use such mechanismandmake provision for direct access to the Chairman of the AuditCommittee.
DETAILS ABOUT THE POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON CORPORATE SOCIALRESPONSIBILITY INITIATIVES TAKEN DURING THE YEAR
As a responsible corporate citizen the Company has always strived to maintain thehighest standards of social responsibility governance safety and environmentalperformance. Pursuant to Section 135 of The Companies Act 2013 your Directors haveconstituted Corporate Social Responsibility Committee (CSR) with three Directors namelyMr.Yogesh Jain Non Executive Independent Director as Chairman Mr. Sandeep Singh WholeTime Director and Mrs. Satinder Kaur Bedi Non Executive Independent Director as Members.It will formulate and recommend to the Board a CSR Policy and under that the activities tobe undertaken amounts to be spent and monitoring implementation thereof.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
The particulars as required under section 134(3)(m) of the Companies Act 2013 theinformation relating to conservation of energy and technology absorption and ForeignExchange earning and Outgo forms an integral part of this report and is annexed asAnnexure C.
We take this opportunity to acknowledge our deep senses of gratitude to all bankscentral/state government departments and other local authorities for unstinted andcontinued guidance and support. Our gratitude is also due to the shareholders for theconfidence and faith they have reposed in us.