Your Directors present herewith the 8th Annual Report on the business& operations of the Company along with the Audited Financial Statements for thefinancial year ended 31st March 2022.
1. FINANCIAL RESULTS
(Rs. in lakhs)
|Particulars ||Year ended 31st March 2022 ||Year ended 31st March 2021 |
|Revenue from Operations (Gross) ||274365.91 ||271052.01 |
|Profit before Finance Costs Tax Depreciation and Amortization ||30693.09 ||26569.31 |
|Less: Depreciation & Amortization Expenses ||5128.49 ||4830.93 |
|Finance Costs ||8842.41 ||11601.90 |
|Profit/(Loss) Before Tax ||16722.19 ||10136.48 |
|Less: Provision for Tax: ||4281.26 ||2378.10 |
|Profit/(Loss) After Tax ||12440.93 ||7758.38 |
2. OPERATING PERFORMANCE
A detailed analysis of the Company's operations future expectationsand business environment has been given in the Management Discussion & Analysis Reportwhich is made an integral part of this Report and marked as "Annexure A".
3. FINANCIAL PERFORMANCE 2021-22
The Company recorded Total Revenue of Rs. 274777.89 Lakhs (includingother income aggregating to Rs. 411.98 Lakhs during the financial year ended 31st March2022. The Revenue from Operations (Gross) of the Company for the year 2021-22 stood at Rs.274365.91 Lakhs. The Profit before Finance Costs Tax Depreciation and Amortisation forthe year under review stood at 30693.09 Lakhs representing 11.17% of the total revenue.There is no change in the nature of business of the Company. There were no significant ormaterial orders passed by regulators courts or tribunals impacting the Company'soperation in future.
There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year i.e.31st March 2022 and date of this report.
In terms of Regulation 43A of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Board of Directors of the Company has adopted a DividendDistribution Policy that balances the dual objectives of appropriately rewarding Membersthrough dividends and retaining capital in order to maintain a healthy capital adequacyratio to support long term growth of your Company. There has been no change in this policyduring the year under review. This policy is also available on the website of the Companyand can be accessed at the weblink - http://www.birla-sugar.com/Assets/Avadh/Avadh-SugarDividend Distribution%20Policy.pdf Consistent with this policy your Board has recommendeda dividend of Rs.10/- on Equity Shares (100%) for the financial year 2021-22 to theMembers of your Company. The proposal is subject to the approval of the Members at the 8thAnnual General Meeting (AGM) of your Company scheduled to be held on July 20 2022. Thedividend will entail a cash outflow of Rs. 2001.84 lakhs (previous year Rs. 800.74 lakhs).
As permitted under the provisions of the Companies Act 2013 the Boarddoes not propose to transfer any amount to General Reserve.
5. PUBLIC DEPOSITS
During the year the Company has not accepted any deposits from thepublic under Chapter V of the Companies Act 2013. There was no public deposit outstandingas at the beginning and end of the financial year 2021-22.
6. SHARE CAPITAL
The Authorized Share Capital of the Company stood atRs.1700500000/-(Rupees One hundred seventy crore and five lakhs) divided into56050000 (Five crore sixty lacs fifty thousand) Equity Shares of Rs. 10/- (Rupees ten)each; 80000000 (Eight crore) Preference Shares of Rs.10/- and 3400000 (Thirty-fourlacs) Preference Shares of Rs.100/- each and there is no change in the authorised capital.
The Issued and Subscribed Share Capital of your Company as on 31stMarch 2022 stood at ' 200184200/- divided into 20018420 Equity Shares of ' 10/-each.
7. SUBSIDIARY ASSOCIATE AND JOINT VENTURE
The Company does not have any subsidiary company or any associatecompany or any joint venture with any person. However the Company has in place a policyfor determining material subsidiaries in line with the requirement of the ListingRegulations as amended from time to time. The said Policy is being disclosed on theCompany's website at the weblinkhttp://birla-sugar.com/Assets/Avadh/Avadh-Sugar-Policy-for-Determining-Material-Subsidiaries.pdf
8. CREDIT RATING
India Ratings and Research - a Credit Rating Agency has assigned theCredit Rating IND A with respect to long-term bank facilities whereas short- term bankfacilities rating has been assigned rating of IND A1.
9. HUMAN RESOURCES
The Company continued to create a productive learning and caringenvironment by implementing robust and comprehensive HR processes fair transparentperformance evaluation and taking new initiatives to further align its Human Resourcepolicies to meet the growing needs of its business.
The Board of Directors comprises of seven Non-Executive Directorshaving experience in varied fields and a Whole time Director. Out of seven Non- ExecutiveDirectors five of them are Independent Directors and other two directors are PromoterDirectors. Mrs Nandini Nopany is the Chairperson of the Company and Mr Chandra ShekharNopany is Co-Chairperson of the Company.
The shareholders of the Company have vide resolution passed throughPostal Ballot on March 13 2022 re-appointed Mrs Kausalya Madhavan (DIN - 05198559) as anIndependent Director of the Company for a second term to hold office for a term of 5(five) consecutive years from February 11 2022 to February 10 2027. Further theshareholders also re-appointed Messrs Anand Ashvin Dalal (DIN - 00353555) Gaurav Swarup(DIN - 00374298) Pradip Kumar Bishnoi (DIN - 00732640) and Kalpataru Tripathy (DIN -00865794) as Independent Directors of the Company for a second term to hold office for aterm of 5 (five) consecutive years from March 14 2022 to March 13 2027.
The Board of Directors is of the opinion that the Independent Directorsare persons of integrity with high level of ethical standards they possess requisiteexpertise and experience for appointment as Independent Director of the Company.
In terms of Section 150 of the Companies Act 2013 read with Rule 6 ofthe Companies (Appointment and Qualification of Directors) Rules 2014 as amended thenames of all the Independent Directors of the Company have been included in the data bankmaintained by the Indian Institute of Corporate Affairs.
In accordance with Regulation 17(1A) of the Listing Regulationsconsent of the shareholders was accorded through Postal Ballot by way of SpecialResolution for continuation of directorship of Mrs Nandini Nopany beyond the age of 75(seventy-five) years as she would attain the said prescribed during the midst of herpresent term.
Mr. Chandra Shekhar Nopany will retire by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment asDirector of the Company.
The Company has received necessary declaration from each IndependentDirector under Section 149(7) of the Companies Act 2013 that they meet the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 read with Regulation25 of SEBI (LODR) Regulations 2015. Other information on the Directors including requiredparticulars of Director retiring by rotation is provided in the Notice convening theAnnual General Meeting.
In pursuance of the provisions of the Companies Act 2013 and accordingto Regulation 25(3) of the Listing Regulations the Performance Evaluation Criteria hasbeen laid down for effective evaluation of performance of the Board of Directors theCommittees thereof and individual Directors including the Chairperson of the Company.After detailed discussion at Board level as well as taking input from each DirectorNomination and Remuneration Committee finalized the format / questionnaires containingvarious parameters to evaluate the performance of Board and its committee(s) IndividualDirectors and Chairperson of the Company. The performance evaluation parameters are basedon their roles and responsibilities contribution to the Company's goals decision makingprocess flow of information and various other aspects. The evaluation of performance ofthe Board as a whole Committees of the Board Individual Directors including theChairperson of the Company was carried out for the Financial Year 2021-22. Nomination andRemuneration Committee evaluated the performance of the individual Director.
The Independent Directors in their separate meeting held on 21st March2022 carried out the evaluation of the Board of Directors as a whole Chairperson of theCompany and Non-Independent Directors. The evaluation of Independent Directors was carriedout without the presence of concerned Director.
The Chairperson of Nomination and Remuneration Committee has submittedreport of the respective evaluations to the Chairperson of the Company. Based on thequestionnaires received from the Directors and considering the reports of Chairperson ofNomination and Remuneration Committee the Board has evaluated its own performance andthat of its committees and individual directors including Independent Directors.
A certificate obtained by the Company from a company secretary inpractice confirming that none of the Directors on the Board of Directors of the Companyhave been debarred or disqualified from being appointed or continuing as director ofcompanies by the Securities and Exchange Board of India /Ministry of Corporate Affairs orany such statutory authority is enclosed as Annexure "E" to this Report.
11. KEY MANAGERIAL PERSONNEL
During the year under review Mr Anand Sharma Company Secretaryresigned from the services of the Company with effect from August 312021. Based on therecommendation of the Nomination and Remuneration Committee the Board of Directors at itsmeeting held on August 312021 appointed Mr Devinder Kumar Jain as Company Secretary witheffect from September 12021. The Key Managerial Personnel of the Company as on 31stMarch 2022 are as under:
a) Mr. Devendra Kumar Sharma Whole time Director
b) Mr. Dilip Patodia Chief Financial Officer
c) Mr Devinder Kumar Jain Company Secretary
All Directors Key Managerial Personnel and Senior Management of theCompany have confirmed compliance with the Code of Conduct applicable to Directors &employees of the Company and a declaration to the said effect by the Whole-time Directoris made part of Corporate Governance Report which forms part of this report. There hasbeen no change in this policy during the year under review. The Code is available on theCompany's website at the weblinkhttp://birla-sugar.com/Assets/Avadh/Avadh-Sugar-Code-of-Conduct.pdf All Directors haveconfirmed compliance with the provisions of Section 164 of the Companies Act 2013.
12. FAMILIARISATION PROGRAMME
Periodic presentations are made at the Board Meetings businessperformance updates & business strategy of the Company. The details of thefamiliarisation programme (other than through meeting of Board and its Committees)imparted to Independent Director are uploaded on the website of the Company and availableat the weblink-http://www.birla-sugar.com/Assets/Avadh/ASEL-Famiiarisation-Programme.pdf
13. REMUNERATION POLICY
In pursuance of the provisions of Section 178 of the Companies Act2013 and Listing Regulations the Company has formulated a Remuneration Policy. There hasbeen no change in this policy during the year under review and a copy of the said Policyis available at the website of the Company at the weblinkhttp://www.birla-sugar.com/Assets/Avadh/ASEL-Nomination-and-Remuneration-Policy.pdf
The Remuneration Policy inter-alia includes the appointment criterion& qualification requirements process for appointment & removal retirement policyand remuneration structure & components etc. of the Directors Key ManagerialPersonnel (KMP) and other senior management personnel of the Company. As per theRemuneration Policy a person proposed to be appointed as Director KMP or other seniormanagement personnel should be a person of integrity with high level of ethical standards.In case of appointment as an Independent Director the person should fulfil the criteriaof independence prescribed under the Companies Act 2013 rules framed thereunder and theListing Regulations. The Remuneration Policy also contains provisions about the payment offixed & variable components of remuneration to the Whole-time Director and payment ofsitting fee & commission to the Non-Executive Directors.
14. CORPORATE SOCIAL RESPONSIBILITY POLICY
Your Company believes in long term strategy to contribute to thewell-being and development of the society especially the rural population around itsplants at Hargaon Hata Rosa & Seohara . As part of its Corporate SocialResponsibility ("CSR") initiatives the Company is working mainly in the areasof imparting School Education Technical & Vocational Education Rural DevelopmentCommunity Healthcare etc. This multi-pronged CSR approach is showing notable improvementin the quality of life of rural population. The Company continues to spend to supportlocal initiatives to improve infrastructure as well as support in other corporate socialresponsibilities. The CSR Policy as approved by the Board is available on Company'sweblink http://birla-sugar.com/Assets/Avadh/Avadh-Sugar-CSR-Policy.pdfThere has been nochange in this policy during the year under review.
The composition and terms of reference of CSR Committee are given inthe Corporate Governance Report. The Annual Report on CSR activities (including thedetails of the development and implementation of the Corporate Social ResponsibilityPolicy) as prescribed under Section 135 of the Companies Act 2013 and the Companies(Corporate Social Responsibility Policy) Rules 2014 is attached as "Annexure I"to this Report.
For the purpose of Section 135 of the Companies Act 2013 the amountequivalent to 2% of the average net profits of the Company made during the immediatelypreceding three financial years works out to Rs. 248.43 lakhs. As against this theCompany had spent Rs. 248.65 lakhs on CSR projects / programs during the Financial Year2021-22.
15. BOARD MEETINGS
A calendar of Meeting is prepared and circulated in advance to theDirectors. The Board evaluates all the decisions on a collective consensus basis amongstthe Directors. During the financial year ended 31st March 2022 7 (seven) Meetings of theBoard of Directors of the Company were held. The details of the Board Meetings held duringthe year under review are given in the Corporate Governance Report forming a part of thisAnnual Report. The intervening gap between the Meetings was within the period prescribedunder the Companies Act 2013 and the Listing Regulations. The Company has complied withthe applicable Secretarial Standards prescribed under Section 118(10) of the CompaniesAct 2013.
16. INTERNAL COMPLAINTS COMMITTEE
An Internal Complaints Committee was constituted by the Company interms of Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Act aims at protecting women's right to gender equality life and libertyat workplace to encourage women participation at work. The Committee meets all thecriteria including its composition mentioned in the Act and relevant Rules. No complainthas been received by the Committee during the year under review.
17. LOANS GUARANTEE AND INVESTMENTS
It is the Company's policy not to give any loans directly orindirectly to any person (other than to employees under contractual obligations) or toother body corporate or person. In compliance with Section 186 of the Companies Act 2013loans to employees bear applicable interest rates. During the year under review theCompany has not made any investment in securities of other body corporate. The details ofInvestments Loans and Guarantees covered under the provisions of Section 186 of theCompanies Act 2013 are given in the notes to the Financial Statements.
18. RELATED PARTY CONTRACTS / ARRANGEMENTS
All Related Party Transactions entered during the year were on arm'slength basis and in the ordinary course of business. There have been nomaterially-significant related party transactions made by the Company with the Promotersthe Directors or the Key Managerial Personnel which may be in conflict with the interestsof the Company at large. Accordingly disclosure of contracts or arrangements with RelatedParties as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 isnot applicable.
The Policy on Related Party Transactions as approved by the Board canbe accessed on the Company's website at following web-link http://www.birla-sugar.com/Assets/Avadh/Avadh-Sugar-Related-Party-Transaction-Policy-.pdf
The details of related party transactions are set out in the notes tothe financial statements.
19. RISK MANAGEMENT
In line with the regulatory requirements the Company has formallyframed Risk Management Policy to identify and assess the key risk areas monitor andreport the compliance and effectiveness of the same. A Risk Management Committee has beenconstituted comprising of two Independent Directors Whole time Director Chief FinancialOfficer and the Group President to oversee the risk management process in the Company withan objective to review the major risks which effect the Company from both the external andthe internal environment perspective. Appropriate actions have been initiated to eithermitigate partially mitigate transfer or accept the risk (if need be) and monitor therisks on a regular basis. The details of the terms of reference number and date ofmeeting attendance of director and remuneration paid to them are separately provided inthe Corporate Governance Report.
20. INTERNAL FINANCIAL CONTROLS
The Company has laid down internal financial control's through acombination of Entity level controls Process level controls and IT General controlsinter-alia to ensure orderly and efficient conduct of business including adherence to theCompany's policies and procedures accuracy and completeness of accounting records andtimely preparation and reporting of reliable financial statements/informationsafeguarding of assets prevention and detection of frauds and errors. There is a propersystem to ensure compliance with the provisions of all applicable laws and that suchsystems are adequate and operating effectively. The directors confirm that for thepreparation of financial statements for the financial year ended March 312022 theapplicable Accounting Standards have been followed and the internal financial controls aregenerally found to be adequate and were operating effectively & that no significantdeficiencies were noticed.
21. WHISTLE BLOWER / VIGIL MECHANISM
The Company has established a vigil mechanism and adopted WhistleBlower Policy pursuant to which whistle blowers can report concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's code of conductpolicy.The mechanism provides adequate safeguards against victimisation of persons who usethis mechanism. The brief detail about this mechanism may be accessed on the Company'swebsite at the weblinkhttp://www.birla-sugar.com/Assets/Avadh/Avadh-Sugar-Whistle-Blower-Policy.pdf
22. CORPORATE GOVERNANCE & ANNUAL RETURN
Your Directors strive to maintain highest standards of CorporateGovernance. The Corporate Governance Report for the Financial Year 2021-22 is attached as"Annexure B"to this Report. All the Directors of the Company and seniormanagement personnel have confirmed the compliance of Code of Conduct of the Company. Thedeclaration of the Whole-time Director confirming compliance with the 'Code of Conduct' ofthe Company is enclosed as "Annexure C" to this Report and Auditor's Certificateconfirming compliance with the conditions of Corporate Governance is enclosed as"Annexure D" to this Report. Pursuant to Section 92(3) of the Act the AnnualReturn as on 31st March 2022 is available on the website of the Company weblink:http://birla-sugar.com/Avadh-Shareholders-Info/Annual-Returns-Avadh
23. RESEARCH & DEVELOPMENT
During the year under review the Company has undertaken Research &Development initiatives with an intention to improve the sugar recovery ratio and toeducate the cane growers to cultivate improved variety of sugarcane and to otherwiseincrease the sucrose contents in their produce.
24. AUDITORS AUDIT QUALIFICATIONS AND BOARD'S EXPLANATIONS STATUTORYAUDITORS
The shareholders of the Company at the AGM held on July 312017 hadapproved the appointment of M/s B S R & Co LLP Chartered Accountants (FirmRegistration No. 101248W/W-100022) as the Statutory Auditors of the Company to holdoffice for a term of 5 (five) consecutive years from the conclusion of the Third AGM ofthe Company held on July 312017 till the conclusion of Eighth AGM of the Company to beheld in the year 2022. M/s B S R & Co LLP Chartered Accountants will retire at theconclusion of the ensuing AGM of the Company. The Board places on record its appreciationof the services rendered by M/s. B S R & Co LLP during their association with theCompany.
The Notes to the Financial Statements read with the Auditor's Reportsare self-explanatory and therefore do not call for further comments or explanations.There has been no qualification reservation adverse remark or disclaimer in theAuditor's Reports.
On the recommendations of the Audit Committee the Board recommends tothe shareholders of the Company the appointment of M/s. S R Batliboi & Co. LLP (FirmRegistration No. 301003E/E300005) as the Auditors of the Company to hold office from theconclusion of 8th AGM of the Company till the conclusion of 13th AGM of the Company to beheld in the year 2027.
Pursuant to Section 148 of the Companies Act 2013 read with TheCompanies (Cost Records and Audit) Amendment Rules 2014 the cost audit recordsmaintained by the Company in respect of its Sugar activity is required to be audited. YourDirectors have on the recommendation of the Audit Committee appointed Mr SomnathMukherjee Cost Accountant as the Cost Auditor to audit the cost accounts of the Companyfor the financial year 2022-23. As required under the Companies Act 2013 theremuneration payable to the Cost Auditor is required to be placed before the Members in ageneral meeting for their ratification.
Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany had appointed Messrs Vinod Kothari & Co. Practising Company Secretaries toundertake the Secretarial Audit of the Company for the financial year 2021-22. TheSecretarial Audit Report is annexed herewith as "Annexure F" and which isself-explanatory.
There has been no qualification reservation observation disclaimeror adverse remark in the Secretarial Audit Report.
During the year under review the auditors the secretarial auditorsand cost auditors have not reported any fraud under Section 143(12) of the Companies Act2013 and the Companies (Audit and Auditors) Rules 2014.
25. INVESTOR EDUCATION AND PROTECTION FUND
The provisions pertaining to Investor Education and Protection Fund(Uploading of Information regarding unpaid and unclaimed amounts lying with Companies)Rules 2012 the Company are not applicable to your company.
26. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO
The requisite information on conservation of energy technologyabsorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m)of the Companies Act 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 isannexed herewith as "Annexure G".
27. PARTICULARS OF EMPLOYEES
The human resource is an important asset which has played pivotal rolein the performance and growth of the Company over the years. Your Company maintains veryhealthy work environment and the employees are motivated to contribute their best in theworking of the Company. The information required to be disclosed in pursuance of Section197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as "Annexure H" tothis Report and forms an integral part of this Report.
28. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for theyear ended March 31 2022 the applicable accounting standards have been followed alongwith proper explanation relating to material departures if any;
b. that such accounting policies as mentioned in Note 3 of the Notes tothe Financial Statements have been selected and applied consistently and judgement andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 312022 and of the profit or lossof the Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. that the annual financial statements have been prepared on a goingconcern basis;
e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
29. BUSINESS RESPONSIBILITY REPORT
In pursuance of the provisions of the Listing Regulations the BusinessResponsibility Report for the financial year 2021-22 describing the initiatives taken bythe Company from environmental social and governance perspective forms part of the AnnualReport.
30. CEO/CFO CERTIFICATION
Mr. Devendra Kumar Sharma the Whole time Director and Mr. DilipPatodia Chief Financial Officer have submitted certificates to the Board as contemplatedunder Regulation 17(8) of the SEBI (LODR) Regulations 2015.
Your Directors take this opportunity of recording their appreciation ofthe shareholders financial institutions bankers suppliers and cane growers forextending their support to the Company. Your Directors are also grateful to variousministries in the Central Government and State Governments of Uttar Pradesh the SugarDirectorate and the Sugar Development Fund for their continued support to the Company. TheBoard of Directors also convey its sincere appreciation of the commitment and dedicationof the employees at all levels.
| ||For and on behalf of the Board of Directors |
|Kolkata ||Chandra Shekhar Nopany |
|Dated 10th May 2022 ||Co-Chairperson |