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Dharani Sugars & Chemicals Ltd.

BSE: 507442 Sector: Agri and agri inputs
BSE 00:00 | 12 Aug 11.16 0.11






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OPEN 11.05
52-Week high 25.25
52-Week low 10.70
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 11.05
CLOSE 11.05
52-Week high 25.25
52-Week low 10.70
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dharani Sugars & Chemicals Ltd. (DHARSUGAR) - Director Report

Company director report

Dear Members

Your Board of Directors are pleased to present the 34th Annual Report on the operationsof the Company and the Audited Statement of accounts for the year ended 31st March 2021.


Rs. in Crores

Particulars Year Ended Year Ended
31.03.2021 31.03.2020
Total Revenue 36.91 110.40
Profit/(Loss) before Interest Depreciation and Tax (12.53) (43.45)
Interest and Finance Charges 2.11 2.15
Cash Profit / (Loss) (14.64) (45.60)
Depreciation 23.40 22.46
Profit/(Loss) before Tax (38.04) (68.06)
Deferred Tax-Asset/ (Liability)/ Exceptional Items 0.58 (3.07)
Profit/(Loss) After Tax (37.46) (64.99)
Other Comprehensive Income/ Interest Reversal - 34.78
Total Profit/( Loss) for the period (37.46) (30.21)
Profit/(Loss) Brought forward from last year (122.44) (92.23)
Profit/(Loss) carried forward to Balance Sheet (159.90) (122.44)

The financial statements have been prepared in compliance with the Indian AccountingStandards.


Financial Performance:

During the year under review the total income was Rs.36.91 crores as against the totalincome of Rs 110.40 crores in the previous year. Due to severe drought during the last fewyears and consequent to low volume of cane crushing the operation has resulted in a loss.The gross operating loss works out to Rs.12.53 crores as against the loss of Rs.43.45crores in the previous year. During the year the company has not charged interest towardsBanks and Financial Institutions as our accounts are classified as NPA. After providinginterest the cash loss workout to Rs.14.64 crores as against the cash loss of Rs 45.60crores in the previous year. The net loss after depreciation works out to Rs.37.46 croresas against the loss of Rs 30.21 crores in the previous year.


During the year under review the Company has crushed 0.91 lakh tonnes of cane asagainst 2.16 lakh tonnes of cane in the previous year. Consequently the total sugarproduction was 0.75 lakh qtls as against 1.71 lakh qtls in the previous year. The totalsugar sold was 0.74 lakh qtls as against 1.93 Lakh qtls in the previous year. The averagesugar sales realization for the year was Rs. 3364/- qtl as against the average realizationof Rs.3228/qtl during the previous year.

Alcohol and Power:

During the period under review The Company could not produce the alcohol and Power asthe Company could not start the cane crushing operation in Unit II (polur) and Unit III(Kalayanallur) due to cane arrears relating to the sugar season 2018-19 were not paid bythe Company.


Due to absence of profits in the current year no amount is proposed to be transferredto General Reserves account on account of loss during the year.


Due to absence of profits in the current year the Board of Directors is unable torecommend any dividend for the year 2020-21.


Extract of the Annual Return in form MGT-9 is attached herewith as Annexure – I.


During the financial year 2020-21 4 Board Meetings were held on 29.07.202012.09.2020 11.11.2020 and 13.02.2021. Details of Attendance of each director furnished inthe report on Corporate Governance in page No.28.


Mr. A. Sennimalai (DIN 00062791) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. His name has been proposedfor reappointment.


In terms of Section 134 (5) of the Companies Act 2013 the directors state that:

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

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


The independent directors have submitted their declaration as per Sec.149 (7) that theycontinue to meet the criteria of independence as provided in Sec.149 (6).


The Nomination & Remuneration Committee constituted as per Section 178 of theCompanies Act 2013 has formulated the policy for appointment of Directors SeniorManagement etc. and this has been approved by the Board and posted on the Company'sWebsite. The Remuneration policy of the Company comprising the appointment andremuneration of the Directors Key Managerial Personnel and Senior Executives of theCompany including criteria for determining qualifications positive attributesindependence of a Director and other related matters are given below.

I. For Executive Directors:

The remuneration of the Whole Time/Executive Directors shall comprise of fixedcomponent and a performance linked pay as may be fixed by the Nomination and RemunerationCommittee (NRC) and subsequently approved by the Board of Directors and Members.Performance Linked Pay shall be payable based on the performance of the individual and theCompany during the year. Remuneration trend in the industry and in the region academicbackground qualifications experience and contribution of the individual are to beconsidered in fixing the remuneration. These Directors are not eligible to receive sittingfees for attending the meetings of the Board and Committees.

II. For Non-Executive Directors:

The Non-Executive Directors will be paid sitting fees for attending the Board andCommittee Meetings as per the stipulations in the Act and the Articles of Association ofthe Company and as recommended by the Nomination and Remuneration Committee. Differentscales of sitting fee may be fixed for each category of the directors and type of meeting.However the fees payable to the Independent Directors and Woman Directors shall not belower than the fee payable to other categories of directors. In addition to this thetravel and other expenses incurred for attending the meetings are to be met by theCompany. The Company shall have no other pecuniary relationship or transactions with anyNon- Executive Director.


M/s CNGSN Associates & LLP Chartered Accountants Chennai (FRN No.027501)appointed as Statutory Auditors of the Company in the Annual General Meeting held in 25thSeptember 2017 for a period of 5 years will continue as Auditors.

The following qualification was mentioned in the audit report as of 31st March 2021 bythe statutory auditors.

Qualification Explanation
1 The Company Stopped Providing Interest on the outstanding borrowings from banks and financial institutions. Not restated the foreign currency loan. Reversed the interest provided during the earlier quarter after NPA Date. Due to continues drought inn Tamil Nadu for the last four years the cane availability and consequent capacity utilisation for the sugar units in Tamil Nadu has drastically come down to around 35%. On account of this the Company could not service the loans and the loans have slipped into NPA. Interest was originally provided as per norms. Subsequently the loans have become NPA in the books of the lenders. Company is discussing with them for a one time settlement\ of the principal outstanding as on the NPA date. In view of this interest for the period beyond the date of NPA need not be paid nor need to be provided
Application filed for CIRP was admitted on 29-07-2021 by NCLT and IRP was appointed Hence this provisions is withdrawn. Company is confident of settling the OTS with bankers
2 Appointment of RP was admitted in the case of one of the major investees (Appu Hotels Ltd) of the company by the NCLT. There is a doubt about the recoverability of the investments is Rs.1455.53 Lakhs. Appu Hotel assets are mainly of lands and well known branded Five Star Deluxe Hotels and the realisable value of Appu Hotels Ltd Assets are far in excess of its liabilities.
Hence the Company is confident of realising the value of the investment stated in the books which is Rs 1455.53 lakhs
3. There exists material uncertainty that case a significant doubt on the company's ability to continue as a going concern. The Company has submitted the resolution plans to Banks for OTS and it is still under the consideration of Banks. The Company is confident of settling the current issues with Banks and FIs. SISMA has also made representation to the Central and State Government for extending necessary support to the TamilNadu sugar units for revival of the industry. Normal operations are expected to start shortly.


Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Mr M Damodaran and Associates Company Secretaries in practice to undertake theSecretarial Audit of the Company. Their Secretarial Audit report as on 31st March 2021 isannexed herewith as "Annexure".-II. Observations by the Auditor and theCompany's explanations are given below.

Sl. No Compliance Requirement (Regulations / circulars / guidelines including specific clause) Deviations Company's explanations
1 SEBI (Prohibition of Insider Trading) Regulations 2015 The trading window has not been closed with respect to approval of financial results for the quarter and year ended 31.03.2020. The Company could not comply with this regulation due to nationwide Covid- 19 lockdown during this period.
2 Reg. 27(2) of SEBI (LODR) Regulations 2015 The report on Corporate Governance for the quarter ended 31.03.2020 was submittedwithStockExchanges on 17.05.2020 instead of on or before 15.05.2020. The Company has submitted the Corporate Governance report on 17.05.2020 with two days' delay. The delay was due to Covid -19 lockdown.


Your Company has not given any loans or provided any guarantees or acquired securitiesas defined in Section 186 of the Companies Act 2013.


All transactions entered into by the Company with Related Parties were in the OrdinaryCourse of Business and at arm's Length pricing basis. The Audit Committee granted Omni busapproval for the transactions (which are repetitive in nature) and the same was reviewedby the Audit Committee and the Board of Directors. There were no materially significanttransactions with Related Parties during the financial year 2020-2021 which were inconflict with the interest of the Company or which requires the approval of shareholders.Suitable disclosures as required under IND AS-24 have been made in Note 45 of theNotes to the financial statements. Details of the transactions are provided in Form AOC-2which is attached as Annexure-III to this Report.


There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thereport. All the Banks/Financial Institutions had declared our accounts as non- performingassets and issued notice to recall the loans.


The Audit committee consists of the following Directors.

1. Mr P S Gopalakrishnan Chairman & Independent Director
2. Dr K C Reddy Nominee Director (IREDA)
3. Mr A Sennimalai Director
4. Dr S Muthu Independent Director
5. Mr R K Viswanathan Independent Director
6. Mr P Selvam IAS (Retd) Independent Director

The Committee met 4 times on 29.07.2020 12.09.2020 11.11.2020 and 13.02.2021.

Details of Attendance of each director is furnished in the report on CorporateGovernance in Page No. 30 There were no instances where the Board has not acceptedthe recommendations of the Audit Committee.


The details of measures taken for Conservation of Energy Technology AbsorptionForeign Exchange Earnings and Outgo are given in the Annexure.


The Company does not have any subsidiary or any Associate Company.


The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) ofthe Companies Act 2013 details of the Policy are disclosed in the Company's Website.

At present the Company has not identified any element of risk which may threaten theexistence of the Company.


Bank of India application was admitted by National Company Law Tribunal (NCLT) underinsolvency and Bankruptcy code 2016 vide is order No: IBA/976/2019 dated 29th July 2021and Mr S Rajendran was appointed as Interim Resolution Professional in the matter of ourcompany and taking over the charge of the company on 30th July 2021. IRP Mr S Rajendranhas commenced the Corporate Insolvency Resolution Process (CRIP) pursuant to NCLT orderNo: IBA/976/2019 dated 29th July 2021.


The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by this Audit Committee. To maintain its objectivity and independence theInternal Auditor reports to the Chairman of the Audit Committee of the Board & to theChairman of the Company. The Internal Audit Department monitors and evaluates theefficiency and adequacy of internal financial control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. Based on the report of internal auditor Company undertakes corrective actionin their respective areas and thereby strengthen the financial controls. Significant auditobservations if any and recommendations along with corrective actions thereon arepresented to the Audit Committee of the Board.


During the financial year 2020-21 the Company has not accepted deposits as defined inSection 73 and 74 of Chapter V of the Companies Act 2013. Your Company has complied withthe provisions of Section 73 &74 and the rules prescribed thereunder. Your Company hasno unpaid deposits which were due or repayable as on 31st March 2021. Your Company has notdefaulted in repayment of the deposits on the due dates. As on the date of this reportthere are no deposits and unclaimed deposits.


As per Section 135 of the Companies Act a Corporate Social Responsibility (CSR)Committee has been formed. CSR policy has been framed and is available on the Website.Members of the Committee are:

Sl. No Name of the Directors Category of Directors
1 Mr P S Gopalakrishnan Non-Executive Independent Director
2 Mr A Sennimalai Non-Executive Director
3 Mr M Ramalingam Executive Director

However as the average of the net profits for the last 3 years is negative no CSRexpenditure has been earmarked on this account.


Pursuant to the provisions of the Companies Act 2013 the Board has carried out anevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Nomination & Remuneration Committees as also the IndependentDirectors.

Criteria for evaluation of the performance of the Independent Directors: The criteriafor evaluation of the performance of Independent Directors include their qualificationexperience competency knowledge understanding of respective roles (as IndependentDirector and as a member of the Committees of which they are Members/ Chairpersons)adherence to Codes and ethics conduct attendance and participation in the meetings etc.


Pursuant to Section 177(9) and 177(10) of the Companies Act 2013 read with Rule 7 ofthe Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of theListing Obligation and Disclosure Requirement Regulations 2015 the Board of Directors hadapproved a Policy on Vigil Mechanism/ Whistle Blower and the same is hosted on the websiteof the Company. This Policy inter-alia provides a direct access to the Chairman of theAudit Committee. Your Company hereby affirms that no Director/ Employee have been deniedaccess to the Chairman of the Audit Committee and that no complaints were received duringthe year.


Your Company is in compliance with the Corporate Governance regulations as laid out inSEBI (Listing Obligation and Disclosure Requirement) Regulations 2015. A report onCorporate Governance in line with SEBI prescribed format incorporated in the ListingObligations and Requirement Regulations is attached herewith. A certificate from thePractising Company Secretary on compliance of conditions of Corporate Governance has beenobtained and copy enclosed to this report.


The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company. The Code has been posted on the Company's website TheCode lays down the standard procedure of business conduct which is expected to be followedby the Directors and the designated employees in their business dealings and in particularon matters relating to integrity in the work place in business practices and in dealingwith stakeholders. All the Board Members and the Senior Management personnel haveconfirmed compliance with the Code. All Management Staff were given appropriate trainingin this regard.


The Company has in place an Anti-Sexual harassment policy in line with the requirementsof the Section 4 of the Sexual harassment of Women at Work Place (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received about sexual harassment. All employees are covered under this policy.Details have been displayed prominently in the work place and also in the Company'sWebsite.

No complaints were received during the year 2020-21


Annexure attached to the Board's Report


The Company has adopted a Code of disclosures & a Code of Conduct for Prohibitionof Insider Trading with a view to regulate trading in securities by the Directors anddesignated employees of the Company. The Code requires pre-clearance for dealing in theCompany's shares and prohibits the purchase or sale of Company shares by the Directors andthe designated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed. The Boardis responsible for implementation of the Code.

Directors of the Board and the designated employees have confirmed compliance with theCode.


The Board of Directors places on record its appreciation of the support assistance andco-operation received from the Central Government Government of Tamil Nadu variousgovernmental agencies ICICI Bank Limited IREDA the Company's bankers Indian BankState Bank of India The South Indian Bank Limited Bank of India Central Bank of IndiaThe Federal Bank Limited Union Bank of India IDBI Bank Ltd and Indian Overseas Bank.

The Board of Directors also wishes to place on record its appreciation for the canegrowers without whose help and support it could not have achieved the progress that hasbeen made so far. With our encouragement and their initiative we hope for improved caneavailability for the ensuing years.

Your Directors are thankful to the employees of the Company for their wholeheartedco-operation and unstinted dedication to duty leading to cordial industrial relationsduring the year under review.

The Board is thankful and grateful for the continuing cooperation to the managementfrom the shareholder's family since inception and is confident that this partnership willsustain forever.

By order of the Board
For Dharani Sugars and Chemicals Limited
Dr. Palani G Periasamy
Place: Chennai Executive Chairman
Date : 30th July 2021 (DIN No.00081002)