Your Directors have pleasure in presenting the Thirty Fifth Annual Report of theCompany together with the Audited Accounts for the year ended 31st March 2019.
Your Company is the sole manufacturer of Oxo-Alcohols in India. The Oxo-Alcoholsconsist of the products viz. 2 Ethyl Hexanol Normal Butanol and Iso Butanol. YourCompany is an associate of The Andhra Sugars Ltd. and has its Regd. Office atVenkatarayapuram Tanuku-534 215 W.G.Dist.
Performance of the Company for the Financial Year ended 31st March 2019 issummarised below:
| || ||(र in lakhs) |
| ||2018-19 ||2017-18 |
|Net Sales (excl. Excise Duty) ||66586.22 ||51820.00 |
|Profit/(Loss) before Interest & Depreciation ||11140.39 ||6861.79 |
|Less: Interest ||591.81 ||1186.54 |
|Depreciation ||1049.48 ||949.27 |
|Profit/(Loss) after Interest and Depreciation before Extra-ordinary item ||9499.10 ||4725.98 |
|Exceptional items ||- ||- |
|Profit/(Loss) before Tax ||9499.10 ||4725.98 |
|Provision for: || || |
|Current Tax ||2071.12 ||1000.28 |
|Adjustment of Tax Expense for earlier years ||27.18 ||- |
|Deferred Tax ||417.44 ||(924.37) |
|Profit/(Loss) after Taxation ||6983.36 ||4650.07 |
|Other Comprehensive Income ||(101.27) ||(231.42) |
|Total Comprehensive Income for the period ||6882.09 ||4418.65 |
|Balance brought forward from previous year ||4332.83 ||(85.82) |
|Profit carried forward to next year ||11214.92 ||4332.83 |
OPERATIONAL AND FINANCIAL PERFORMANCE:
During the Financial Year 2018-19 the Plant produced 82791 MTs (previous year 76257MTs) of Oxo Alcohols which works out to 113.4% (approx.) capacity utilization. Salesduring the year were 82818 MTs (previous year 78049 MTs). Company posted a Net Profit ofर68.82 crores during the Financial Year 2018-19 as compared to Net Profit of र44.19crores during the previous year.
Your Directors are pleased to inform that the Board of Directors has recommended aDividend of र1.50 paise [Normal Dividend Re.1/- and Special Dividend 50 paise in view ofcompletion 25 years of production] per share (@15% Dividend on 84971600 Equity Sharesof र10/- each)] for the Year 2018-19 commensurate with the Profit earned. The outflowtowards payment of Dividend would amount to र15.36 crores inclusive of tax thereon.Dividend if approved by the shareholders will be paid to all the eligible shareholders.
CAPITAL & RESERVES:
Authorised and Paid-up Capital:
The Authorised Capital of the Company is र125.00 crores and the Paid-up Capital isर84.97 crores.
The total Reserves position as on 31.3.2019 stood at र141.51 crores against र 72.69crores in the previous year.
MANAGEMENT DISCUSSION AND ANALYSIS:
INDUSTRY STRUCTURE AND DEVELOPMENTS:
The year 2018-19 was reasonably a good year as Plant could operate at more than 113%capacity and Company could market products at a reasonably good price.
For the year Company posted a Net Profit of र69.83 crores (after Tax).
OPPORTUNITIES AND THREATS:
Estimated demand of Oxo-Alcohols at 250000 MTPA with healthy growth rate of 8% to10% per annum in general is a good opportunity for the Company with existing capacity of80000 MTPA considering the huge demand-supply gap in the country. With HindustanPetroleum Corporation Limited (HPCL) able to meet full Propylene requirement it isexpected that there will be no constraints in the Company's production capability. Salesrealisation is also expected to improve on account of Anti-Dumping Duties imposed by Govt.of India on imports from certain countries.
Over and above the imports from existing destinations imports from newer destinationslike Taiwan Brazil USA and Japan has become a challenge to the Company.
However commissioning of BPCL Oxo-Alcohols plant at Cochin in 2019/2020 downturn inproduct price scenario internationally and dumping of the products and currencyfluctuations may impact the Company's performance and recovery process to some extent.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
As required by the provisions of Companies Act 2013 Internal Control Systems Reporthas been appended to Independent Auditor's Report given by Statutory Auditors regardingFinancial Year 2018-19. The Company has internal control systems commensurate with thesize of the business operations. A Chartered Accountants firm is engaged to carry outinternal audit covering the entire operations. The audit firm submits internal auditreport periodically with their suggestions and /or corrections. Audit Committee criticallydeliberates and reviews such internal audit reports and ensures effectiveness of thecontrol systems through necessary recommendations.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS:
In the area of Human Resources the employees are being trained to meet the Plantrequirements from time to time by motivating them in a positive way and the industrialrelations continue to be cordial throughout the year.
The total number of employees employed as on 31.03.2019 is 297.
Company's performance capability is expected to be good as the Propylene supply fromHPCL is good. Company has signed Natural Gas (NG) term sheet supply agreement with GAIL.Natural Gas (NG) which is expected to be available in the last Quarter (Q4) of 201920may likely to bring down the cost of production. However the cost benefit will be basedon the NG prices which are going to be fixed once in six months. Mainly the Company'sperformance to a large extent is dependent on international supply and demand for theseproducts and their prices which are influenced by crude prices exchange fluctuations anddumping by sources other than those covered by Anti-Dumping Duty.
RISKS AND CONCERNS:
The Company is dependent on a single source-HPCL Visakha Refinery for its major rawmaterial i.e. Propylene. Crude prices exchange rate fluctuations and politicalinstability in the Gulf area are of major concern.
The statements describing the Company's outlook estimates or predictions may beforward-looking statements based on certain assumptions of future events. Actual resultsmay differ materially from those expressed or implied since the Company's operations areinfluenced by external or internal factors. Your Company closely monitors all majordevelopments likely to affect the operations and will respond to meet the potentialthreats and to gain from any possible opportunities.
During the year under review your Company did not accept any deposits within themeaning of provisions of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
SAFETY HEALTH AND ENVIRONMENT:
Company has evolved Safety Health and Environment Policy.
Company has completed 13 million accident free man hours in the last 10 years.
Total 8500 man-hours used for conducting Safety trainings for employeesincluding contract workmen induction as well as refresher trainings.
Safety of Human and Plant assets are of top priority to the Company. Continuoustraining of personnel at various levels on safety and strict compliance of regulations isensured which resulted in another accident-free year.
Company has been awarded with Winner (Gold Trophy) for lowest Average FrequencyRate (2013 2014 2015 and 2016) and in achieving accident-free year-2016 in NationalSafety Awards (NSA) presented by the Directorate General Factory Advice Services andLabour Institute (DGFASLI) Govt. of India on 17.09.2018 at New Delhi.
Health monitoring of all employees including contract labour and canteen workers isdone on regular basis.
On line emission Ambient air and effluent monitoring systems are in place. Data isbeing transmitted to CPCB and APPCB for monitoring.
All the insurable assets of the Company including Plant and Machinery Buildings andInventories are insured on reinstatement value basis.
LAND TAKEN ON LEASE FROM VISAKHAPATNAM PORT TRUST
Company has taken on lease 75.00 Acres of land from Visakhapatnam Port Trust on whichOxo-Alcohol Plant has been established. The land is located adjacent to HPCL VisakhaRefinery which supplies major Raw Materials. In this connection a Lease Agreement wasentered into on June 27 1989 with Visakhapatnam Port Trust for a period of 30 years whichexpires on June 26 2019. Your Company has initiated necessary steps to enter into a freshLease Agreement for a period of 30 years for continuation of the Lease.
The Equity Shares of your Company are listed on the Bombay Stock Exchange. Listing feeshas been paid.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report asAnnexure-"A" and forms an integral part of this report.
Sri Surinder Kumar Kapoor ceased to be Director consequent upon his sad demise on7.6.2018. Your Directors place on regard their commendable appreciation of the valuableguidance rendered by him during his tenure as Director of the Compay.
Sri M R B Punja Chairman demitted his office as Director with effect from 5.8.2018.Your Directors place on record their commendable appreciation of the valuable guidancerendered by him during his tenure as Director of the Company.
Dr. P Kotaiah Independent Director was appointed as Chairman of the Company witheffect from 5.8.2018.
Sri P Narendranath Chowdary was appointed as Managing Director of the Company witheffect from 5.8.2018.
Smt. Y V Anuradha I.A.S. Nominee Director of APIDC resigned on 18.4.2019. YourDirectors place on record their commendable appreciation of the valuable guidance renderedby her during her tenure as Director of the Company.
Sri P Venkateswara Rao was co-opted by the Board at its Meeting held on 5.11.2018 asAdditional Director under Independent category. His appointment as Independent Director isbeing placed for the approval of shareholders at the ensuing 35th AGM.
The present term of Sri A A Krishnan as Independent Director expires at the conclusionof 35th AGM. Your Directors propose his appointment for second term asmentioned in the relevant Resolution.
Sri M. Gopalakrishna I.A.S. (Retd.) was co-opted by the Board at its meeting held on25.5.2019 as Additional Director under Independent category. His appointment asIndependent Director is being placed for the approval of shareholders at the ensuing 35thAGM.
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Directors Sri Mullapudi Thimmaraja and Sri Solomon ArokiarajI.A.S. retire by rotation at the ensuing 35th AGM and being eligible offerthemselves for reappointment. Their reappointment is being placed for the approval ofshareholders at the ensuing 35th AGM.
KEY MANAGERIAL PERSONNEL:
Details of Key Managerial Personnel of the Company are as under:
|Sl No. ||Name of the person ||Designation |
|1. ||Sri K Narasappa ||President |
|2. ||Sri P Ratna Rao ||Senior General Manager (Finance) [CFO] |
|3. ||Sri M V V S V Prasadu ||Deputy Secretary & Assistant Manager |
| ||(w.e.f. 25.5.2019) ||(Finance) |
Audit Committee which was reconstituted on 4.8.2018 comprises of Non-ExecutiveIndependent Directors Sri A A Krishnan Dr. P Kotaiah and Dr (Smt) D Manjulatha and SriRavi Pendyala Non-Executive Non-Independent Director as its members. Sri A A Krishnan isthe Chairman of the Committee.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed Nekkanti S R V V S Narayana & Co. CompanySecretaries (CP No.7839) Hyderabad to undertake the Secretarial Audit of the Company.The Secretarial Audit Report is included as Annexure-"B" and forms anintegral part of this report.
Pursuant to the provisions of the Companies Act 2013 and Securities & ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 yourBoard has carried out a formal process of evaluation of the Board its Committees and theindividual Directors. The performance was evaluated based on the parameters such aseffectiveness of Board/Committee process and functioning contribution of Board/Committeemembers to overall effectiveness of the Board/Committee avoiding conflict with Company'sinterest bonafide discharge of responsibilities in the interest of the Company andupholding ethical standards integrity and probity etc.
Independent Directors met on 25.5.2019 wherein as per the Report of lead IndependentDirector the performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors. The evaluation process reflected valuablecontribution of members of the Board/Committee thereof.
NUMBER OF MEETINGS OF THE BOARD:
The details of the Number of Meetings of the Board held during the Financial Year2018-19 are given in the Corporate Governance Report which forms part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:
Your Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to financial statements.
WHISTLE BLOWER POLICY:
As per the provisions of the Companies Act 2013 and Securities & Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 your Companyhas established a Vigil Mechanism/Whistle Blower Policy for Directors and employees toreport genuine concerns on unethical behaviour actual or suspected fraud or violation ofthe Company's Code of Conduct in prescribed manner. The Policy provides adequatesafeguards against victimisation of the complainant and direct access to the Chairman ofthe Audit Committee. The protected disclosures if any reported under this Policy will beappropriately and expeditiously investigated.
The Whistle Blower Policy may be accessed on the Company's website at the link:http://www.andhrapetrochemicals.com/Whistle Blower Policy.pdf.
Your Board of Directors at its Meeting held on 27.3.2015 framed and adopted a RiskManagement Policy of the Company to identify and mitigate the risks. The risk managementframework defines the risk management approach of the Company and includes periodic reviewof such risks and also risk mitigation measures and reporting mechanism of such risks.Risk Management Policy of your Company can be viewed by entering the urlhttp://www.andhrapetrochemicals.com/POLICY ON CORPORATE RISK MANAGEMENT.pdf in the webbrowser.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:
As per the provisions of Section 135 & Schedule VII of the Companies Act 2013 andCompany's CSR Policy Company had spent an amount of र1072767/- CSR expenditure forthe Financial Year 2018-19. The report on CSR activities as required under Companies (CSRPolicy) Rules 2014 is set out as Annexure-"C" forming part of thisreport.
NOMINATION AND REMUNERATION COMMITTEE:
Nomination and Remuneration Committee which was re-constituted on 4.8.2018 comprisesof Dr. (Smt.) D Manjulatha Independent Director as Chairperson and Sri A A KrishnanIndependent Director Sri Mullapudi Thimmaraja and Dr. V N Rao Non-Independent Directorsas its members.
NOMINATION AND REMUNERATION POLICY:
The Board of Directors of your Company has on recommendation of the Nomination &Remuneration Committee adopted a Nomination & Remuneration Policy which lays down theframework in relation to the criteria for selection and appointment of Board members andremuneration of Directors/Key Managerial Personnel and Senior Management of the Company.This Policy can be accessed on the Company's website at the link:http://www.andhrapetrochemicals.com/NOMINATION REMUNERATION POLICY.pdf.
M/s C V Ramana Rao & Co. Chartered Accountants Visakhapatnam were appointed asStatutory Auditors of the Company for the five Financial Years from 2017-18 to 2021-22.Fixation of their remuneration payable for the Year 2019-20 is being placed at the ensuing35th AGM for the approval of Members. The total fees paid by the Company forthe year 2018-19 to the Statutory Auditors for all services rendered by them is र 6.25lakhs.
M/s Narasimha Murthy & Co. Cost Accountants Hyderabad were appointed by theBoard as Cost Auditors of the Company for the year ended 31st March 2019. CostAuditors' Report in respect of Financial Year 2017-18 has been filed with the Ministry ofCorporate Affairs on 20th August 2018 i.e. within the stipulated time.
Company has complied with the requirement with regard to maintenance of cost records asspecified by the Central Government under Section 148(1) of the Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Particulars prescribed under Section 134 (3) (m) of the Companies Act 2013 read withthe Rule 8 (3) of Companies (Accounts) Rules 2014 are given below:
I) CONSERVATION OF ENERGY
1. Steps taken or impact on conservation of energy:
a) ETP aerobic high pressure plant air (6.5 kg/cm2) replaced by low pressureair (0.5 mg/cm2) by installing 60 kw Air Blower. Energy saved till 31stMarch 2019 is around र12.00 lakhs and expected energy savings per annum would be around613200 units equivalent to र37.00 lakhs per annum.
b) VFD s' installed on P-856 A/B pumps and Boiler feed water pumps. Energy saved till31st March 2019 is around र13.00 lakhs and expected energy savings per annumwould be around र16.00 lakhs per annum.
c) Replaced 600 Nos. 40W Flurocent tubes by 20 W LED bulbs 150 Nos. CFL tubes (36 W)by 18 W LED tubes 130 MV lamps (125 W) by 45 W LED fittings. Expected energy savings forthe above replacement would be around र 6.50 lakhs/annum
2. Steps taken by the Company for utilising alternative source of energy.
Company could not take up any steps in this regard in view of the non-viability.
3. Capital investment on Energy conservation equipments: र17.00 lakhs.
II) TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
a) Efforts made & Benefits: Technology has been fully absorbed and variousinnovative ideas enable the Company to operate the Plant even above 105% load.
b) Imported Technology: NIL
c) Expenditure incurred on R & D: NIL
III) Foreign Exchange earning and outgo: (On cash basis)
| || ||(र in lakhs) |
| ||For the year ended 31.3.2019 ||For the year ended 31.3.2018 |
|i. Earnings ||- ||- |
|ii. Outgo ||775.84 ||433.74 |
PARTICULARS OF EMPLOYEES:
There is no employee of your Company drawing a remuneration requiring disclosure underSection 197 (12) of the Companies Act 2013 read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended by the Companies (Appointmentand Remuneration of Managerial Personnel) Amendment Rules 2016.
None of the employees holds (by himself or along with his spouse and dependentchildren) more than 2% of the Equity Shares of the Company.
DEMATERIALISATION OF SHARES:
As on 31st March 2019 out of the total number of 84971600 EquityShares 77998194 Equity Shares constituting 91.79% stand dematerialised.
RELATED PARTY TRANSACTIONS:
As per the provisions of Regulation 23 of Securities & Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasestablished a Policy on materiality of Related Party Transactions and on dealing withRelated Party Transactions.
The Policy on Related Party Transactions as approved by the Board of Directors isavailable on the website of the Company. The weblink of the same ishttp://www.andhrapetrochemicals.com/POLICY ON RELATED PARTY TRANSACTIONS.pdf .
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business.
All Related Party Transactions are placed before the Audit Committee and the Board forapproval. Omnibus approval is granted by the Audit Committee on yearly basis fortransactions which are repetitive in nature. A statement giving details of all RelatedParty Transactions are placed before the Audit Committee and the Board for review andratification on a quarterly basis.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
Your Company has in place a Prevention of Sexual Harassment Policy in line with therequirement of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. In compliance with the provisions of the said Act an InternalComplaints Committee (ICC) was set up to redress complaints received regarding sexualharassment. During the year 2018-19 there were no complaints received by the ICC.
PARTICULARS OF REMUNERATION:
The information required under Section 197 of the Act and the Rules made thereunder inrespect of employees of the Company is as follows:-
(a) the ratio of the remuneration of each director to the median remuneration of theemployees of the company for the Financial Year: Our Directors draw remuneration only byway of sitting fees. The details of the same are provided in Corporate Governance whichforms an Annexure to this report. No other remuneration is drawn by them. ManagingDirector does not draw any remuneration. Hence the ratio of remuneration of each Directorto the median remuneration is not required to be given.
(b) the percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary or Manager if any in the Financial Year:
Board of Directors at its meeting held on 5.11.2018 has approved enhancement of sittingfees from र 10000/- to र 20000/- for attending each meeting of Board and from र10000/- to र 15000/- for attending each meeting of committee of the Board. Otherdetails are as follows:
|Name of the Person ||% increase in remuneration |
|Sri K Narasappa President ||14.76% |
|Sri P Ratna Rao Senior General Manager (Finance) [CFO] ||7.00% |
|Sri M V V S Prasadu Deputy Secretary & Asst. Manager (Finance) ||Not applicable |
(c) the percentage increase in the median remuneration of employees in the FinancialYear: 0.93%
(d) the number of permanent employees on the rolls of Company: 297
(e) the explanation on the relationship between average increase in remuneration andCompany performance;
On an average employees received an increase of 0.93%. The increase in remuneration isin line with the market trends. The decreased percentage in the median remunerationcompared to previous year is due to pay revision to non-executive cadre employees duringthe Financial Year 2017-18. A direct co-relation of employee remuneration and Companyperformance as envisaged in the rules is not feasible considering the qualitative factorsinvolved in measuring performance.
(f) comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
|Particulars ||र in lakhs |
|Remuneration of Key Managerial Personnel (KMP) during Financial Year 2018-19 (aggregated) ||99.49 |
|Revenue from operations ||66858.17 |
|Remuneration (as % of revenue) ||0.15% |
(g) variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current Financial Year and previous Financial Year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the networth of theCompany as at the close of the current Financial Year and previous Financial Year:
|Particulars ||Unit ||As at 31st March 2019 ||As at 31st March 2018 ||Variation |
|Closing rate of share at BSE ||र ||54.65 ||57.40 ||4.79% |
|EPS (Consolidated) ||र ||8.22 ||5.47 ||50.27% |
|Market capitalisation ||र/lakh ||46436.98 ||48773.70 ||4.79% |
|Price Earnings ratio ||Ratio ||6.65 ||10.49 ||36.61% |
Percentage in bracket represents negative percentage.
(h) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last Financial Year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration
The average increase in salaries of employees other than managerial personnel in2018-19 was 0.93%. Percentage increase in the managerial remuneration for the year wasNIL.
(i) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:
(i) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:
|Particulars ||President ||Chief Financial Officer ||Company Secretary (w.e.f.18.3.2019) |
| ||र in lakhs ||र in lakhs ||र in lakhs |
|Remuneration ||64.96 ||34.07 ||0.46 |
|Revenue ||66858.17 ||66858.17 ||66858.17 |
|Remuneration (as % of revenue) ||0.10% ||0.05% ||-- |
(j) the key parameters for any variable component of remuneration availed by theDirectors: Not applicable as Directors do not draw any remuneration except by way ofsitting fees. No remuneration is drawn by Managing Director.
(k) the ratio of the remuneration of the highest paid Director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid Directorduring the year:
Not applicable as Directors' remuneration consists of only sitting fees. Noremuneration is drawn by Managing Director.
(l) affirmation that the remuneration is as per the remuneration Policy of the Company:
The Company's Remuneration Policy is driven by the success and performance of theindividual employees and the Company. Through its compensation package the Companyendeavours to attract retain develop and motivate a high performance staff. The Companyfollows a compensation mix of fixed pay benefits and performance based variable pay.Individual performance pay is determined by business performance and the performance ofthe individuals measured through the annual appraisal process. The Company affirmsremuneration is as per the Remuneration Policy of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013:
i) that in the preparation of the Annual Accounts for the year ended 31stMarch 2019 the applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;
ii) that Accounting Policies have been selected and applied consistently and thatjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2019 and of theprofit of the Company for the year ended on that date;
iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) the annual accounts have been prepared on a going concern basis;
v) that 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
vi) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
REPORT ON CORPORATE GOVERNANCE:
As required under Regulation 34(3) of Securities & Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the report on CorporateGovernance and the Auditors' Certificate on the compliance of Corporate Governance areannexed and form part of the Directors' Report (Annexure "D").
Your Directors acknowledge the co-operation and continued valuable support receivedfrom Central and State Government authorities the Promoters-The Andhra Sugars Limited andAndhra Pradesh Industrial Development Corporation Ltd. (APIDC) Financial InstitutionsBanks Shareholders Customers Hindustan Petroleum Corporation Ltd. (HPCL) GasAuthority of India Ltd. (GAIL) and other Suppliers. Your Directors also wish to place onrecord their deep sense of appreciation of the valuable contribution made by the employeesat all levels.
| ||On behalf of the Board |
|Hyderabad ||Dr. P. Kotaiah |
|25.5.2019 ||Chairman |