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Sri Chamundeswari Sugars Ltd.

BSE: 522300 Sector: Agri and agri inputs
NSE: SRICHAMUND ISIN Code: INE004H01019
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Sri Chamundeswari Sugars Ltd. (SRICHAMUND) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 42nd Annual Report together with theAudited Financial Accounts of the Company for the financial year ended 31st March 2015.

FINANCIAL RESULT

Rs in Lakhs

Particulars 2014-15 2013-14
Profit Before Interest and
Depreciation 2373.07 3293.04
Less:Interest 3070.24 3076.05
Depreciation and Amortisation 1259.91 1819.35
4330.15 4895.40
Profit / (Loss) Before Tax (1957.08) (1602.36)
Less : Income Tax Expenses
Deferred Tax Liability/ (Asset) (586.09) (519.89)
Profit / (Loss) after Tax (1370.99) (1082.47)

Review of Operations:

Division wise performance is as under:

Units Cane Crushed Sugar Produced Recovery Production of Alcohol Co-generation (Power Generated)

Lakh MTs

Lakh Qtls.

(%)

Lakh Ltrs.

Crore Units

Bharathinagara 2014-2015 6.52 6.05 9.39 131.24 11.25
2013-2014 6.18 5.74 9.21 146.83 10.49
Srinivasapura 2014-2015 2.14 2.00 9.33
2013-2014 2.12 2.06 9.61 - -

During the year under review the alcohol and power prices were steady. The agreementfor development of part of Real Estate Assets has been re-negotiated. The Company hadincurred losses mainly due to depleted sugar prices which went down as low as Rs 22.80 perKG (During March 2015)

The Karnataka Sugarcane (Regulation of Purchase & Supply) Act 2013 has beenamended enabling the sugar factories to start the crushing operations by paying applicableFRP. Accordingly your factory has started crushing operations by paying the FRP applicableto your Company.

The Company is in the process of expansion of production capacity at sugar unit - IIlocated at Srinivasapura Hassan District along with 18 MW Co-generation plant andupgrading the technology at unit - I located at Bharathinagara Mandya District tooptimize the performance.

DIVIDEND

Due to inadequacy of profits the directors are not recommending any dividend.

INFORMATION ABOUT SUBSIDIARY/JV/ ASSOCIATE COMPANY

Company does not have any Subsidiary Joint venture or Associate

Company.

TRANSFER OF UNCLAIMED DIVIDEND / DEPOSIT TO INVESTOR EDUCATION AND PROTECTION FUND

As per the provisions of Section 205 (c) of Companies Act 1956 the unclaimeddeposits have been transferred to the Investor Education

and Protection Fund account on 17th January 2015 amounting to a total ofRs. 1790407-

MATERIAL CHANGES AND COMMITMENTS

No Material changes occurred subsequent to the close of the financial year of theCompany to which the balance sheet relates and the date of this report.

There is no change in the nature of business of the company. EXTRACTOF ANNUAL RETURN

The Extract of Annual Return as required under section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 read with Section 134(5) of the Companies Act 2013 is hereby confirmed that-

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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 and loss of the company for that period;

(c) the directors 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) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and;

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

AUDITORS and AUDITORS REPORT thereon

M/s P.N. Raghavendra Rao &. Co. (Firm Regn. No. 003328S) CharteredAccountants who were re-appointed as Statutory Auditors for a period of 3 years at theAnnual General Meeting held on 25th September 2014. Their re-appointment andpayment of remuneration are to be ratified in the ensuing Annual General Meeting inaccordance with the provisions of Section 139 (1) of the Companies Act 2013.

With regard to Auditor's remark on public deposits we wish to state that anapplication has been made under section 74 (2) of the Companies Act 2013 to Company LawBoard Chennai Bench seeking time till 31.03.2016 for the repayment of deposits and theorder Is awaited The Notes on financial statements are self-explanatory.

LOANS GUARANTEES AND INVESTMENTS

There were no loans guarantees or Investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision Is notapplicable

RELATED PARTY TRANSACTIONS

All the transactions with the related parties are in the ordinary course of businessand on arm's length basis thus disclosure in form AOC-2 is not required.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) Conservation of energy: • Modification of Condensate Heater for Raw Juice to recover the waste
(i) Steps taken / impact on conservation of energy / thermal Energy from condensate water.
Heat and Electrical Energy with special reference to • Usage of IV Body vapour bleeding to raw juice.
the following: • Usage of III Vapour for all the Molasses conditioners.
• Usage of III Vapour for B-Continuous pan boiling.
• Usage of Direct contact heater for clear juice heating to get minimum approach of temperature.
• Periodical Energy / Thermal Audit has been carried out in SUGAR And COGEN divisions to reduce energy requirement thereby enhancing the power exported.
The above measures against conservation of thermal energy have helped to reduce the steam % cane to the tune of 2.50% on cane forthe season 20142015.
(ii) Steps taken by the company for utilizing alternate sources of energy including waste generated The Company primarily uses bagasse and green power supplying the surplus power to state grid.
(iii) Capital investment on energy conservation equipment The company has invested about Rs 20.00 Lakhs in thermal energy saving.
(B) Technologyabsorption: 1. Efforts in brief made towards technology absorption. Planting of sugarcane was initiated through single eye bud sets by procuring "Bud cutting machine" and started production of single eye budded sugarcane seedlings in Factory Nursery Farm and supplied to Farmers.
2. Benefits derived as a result of the above efforts e.g. product improvement cost reduction product development import substitution etc. Research were made with direct planting of single eye Bud sets and saplings through the Nursery with same single bud sets. The sugarcane through Nursery produces the better result of extra tillers by 30% and the length of the Node is also 15 cms against 10-11 cms of direct plantation of sugarcane sets/chips. Almost 114000 Seedlings of CO86032 were issued to farmers . As a result Higher yield and recovery is achieved.
3. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year) following information may be furnished: Nil
a) Details of technology imported.
b) Year of import.
c) Whether the technology been fully absorbed
d) If not fully absorbed areas where absorption has not taken place and the reasons therefore.
4. Expenditure incurred on Research and Development Nil

 

s. No Name Designation Date of Appointment/ cessation Appointment/ Cessation
1 Dr. N Mahalingam Chairman 02.10.2014 Demise
2 Shri K N V Ramani Director 20.03.2015 Resignation
3 Shri K Prakash Director 23.03.2015 Resignation
4 Shri Vignesa Somathurai Pandian Company Secretary (KMP) 07.03.2015 Resignation
5 Shri M Rajendra prasath Company Secretary (KMP) 30.03.2015 Appointment

Dr. N. Mahalingam Chairman of the Company passed away on 2nd October 2014. He was theChairman of the Company for more than 4 decades. His advice and guidance immenselybenefitted the company in its growth and adherences to good corporate practices. Hisoverall contribution is immeasurable to the group as a whole and our company inparticular. We pledge to follow his high standards in the conduct of business and in allactivities.

RESIGNATION OF DIRECTORS

Shri K.N.V Ramani and Shri K Prakash resigned from the board on 20.03.2015 and23.03.2015 respectively. The board places its appreciation for their outstandingcontributions during their tenure of their office.

DEPOSITS

The Company has not accepted any deposits during the year. As per section 74 of theCompanies Act 2013 the Company should have repaid all the deposits even though it is notmatured. As per that section the unpaid Fixed Deposit amount to Rs 116800000/- (553depositors). An application has been made under section 74 (2) of the Companies Act 2013seeking extension of time till 31.03.2016 or as on the date of maturity whichever isearlier for the repayment of these deposits. All the deposits matured / claimed during theyear have been paid. The unclaimed deposits as on 31.03.2015 is Rs 2609000/- (26depositors)

CORPORATE SOCIAL RESPONSIBILITY

As there have been no profits available during the year provisions of section 135pertaining to corporate social responsibility are not applicable to the Company. As perSection 135(5) of the Companies Act 2013 and Rule 8 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 and schedule VII of the Companies Act 2013 thecompany has duly constituted CSR Committee. The committee would decide the activities tobe undertaken by the company and the expenditures to be incurred on the same andrecommended the same to the board therefore the board approved the CSR policy.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES

ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration andCompliance Committees.

A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.

A separate exercise was carried out to evaluate the performance of individualDirectors who were evaluated on parameters such as level of engagement and contributionindependence of judgment safeguarding the interest of the Company etc. The performanceevaluation of the Independent Directors was carried out by the entire Board. Theperformance evaluation of the Non Independent Directors was carried out by the IndependentDirectors.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the Certificate of the Auditors confirmingcompliance of conditions of Corporate Governance as stipulated in the Listing Agreementwith the Stock Exchanges forms part of the Board Report.

INDEPENDENT DIRECTORS and DECLARATION

Dr. M R Desai has been appointed as the independent director of the company as perSection 149(10) of the Companies Act 2013 on25th September 2014 for a term of 5consecutive years on the Board of the Company.

Dr. A Selvakumar has been appointed as the independent director of the company as perSection 149(10) of the Companies Act 2013 on 25th September 2014 for a term of 5consecutive years on the Board of the Company.

Shri AArjunraj has been appointed as the independent director of the company as perSection 149(10) of the Companies Act 2013 on 25th September 2014 for a term of 5consecutive years on the Board of the Company.

Smt Susheela Balakrishnan has been appointed as an additional director of the companyon 30th March 2015 subject to the approval of the members at the ensuing AGM. If theresolution for her appointment gets passed in the ensuing AGM she will be an Independentdirector as per section 149(10)of the Companies Act 2013 for a period of five consecutiveyears.

The Board of Directors of the Company hereby confirms that all the Independentdirectors duly appointed by the Company have given the declaration and they meet thecriteria of independence as provided under section 149(6) of the Companies Act 2013.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report as provided by Shri. M Thirupal Gorige Practicing CompanySecretary for the financial year ended 31st March 2015 is annexed herewith.

With regard to Secretarial Auditor's remark on public deposits we wish to state thatan application has been made under section 74(2) of the Companies Act 2013 to Company LawBoard Chennai Bench seeking time till 31.03.2016 for the repayment of deposits and theorder is awaited. In respect of dividend for Cumulative Non convertible preference sharethe company did not declare any dividend as the company incurred loss during the saidyear.

COST AUDIT

Shri M.R Krishnamurthy (Membership No.7568) Cost Accountant was appointed as the CostAuditor of the Company and their Audit report on the Cost Accounts of the Company for theperiod ended March 31 2015 will be submitted to the Central Government in due course.

In terms of the Companies (Cost Accounting Records and Compliance)Rules 2011 CostAudit Report for the year ended 31st March 2014 was filed on 27.09.2014 and the due datefor the same being 27.09.2014.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

As per Section 177(9) and (10) of the Companies Act 2013 and as per the Clause 49 ofthe Listing Agreement the company has established Vigil Mechanism for directors andemployees to report genuine concerns and made provisions for direct access to theChairperson of the Audit Committee. Company has formulated the present policy forestablishing the Vigil Mechanism/Whistle Blower Policy to safeguard the interest of itsstakeholders Directors and employees to freely communicate and address to the Companytheir genuine concerns in relation to any illegal or unethical practice being carried outin the Company.

SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

ORDERS PASSED BY REGULATORS/COURTS/TRIBUNALS.

During the year the Company has not received any significant and material order fromregulators/courts/tribunals impacting the status of going concern and future operations ofthe company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company is having an adequate Internal Financial Controls ("IFC") withinthe meaning of the explanation to Section 134 (5) (e) IFC of the

Companies Act 2013. For the year ended 31st March 2015 the Board is of the opinionthat the Company has sound IFC commensurate with the nature and size of its businessoperations; wherein controls are in place and operating effectively and no materialweaknesses exist. The Company has also a process in place to continuously monitor theexisting controls and identify gaps if any and implement new and /or improved controlswherever the effect of such gaps would have a material effect on the Company's operation.

SHARES IN UNCLAIMED SUSPENSE ACCOUNT

Particulars No of Shareholders No of Shares
Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year 2689 222197
Number of shareholders who approached the issuer for transfer of shares from the Unclaimed Suspense Account during the year Nil Nil
Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year Nil Nil
Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year 2689 222197

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year under review the human relations continued to be very cordial. TheCompany wishes to acknowledge the contribution of the employees at all levels of theorganisation.

The Company has placed an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints for sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. The Company has not received any complaintsreceived for disposal off during the year.

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities Customers Vendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andWorkers of the Company.

For and on behalf of the Board of Directors
Date : 07.08.2015 M. Srinivaasan V.K. Swaminathan
Place: Coimbatore Managing Director Director