Your Directors have pleasure in presenting the 23rd Annual Report and the auditedfinancial statements for the year ended 31st March 2018.
1. FINANCIAL RESULTS:
| ||For the Year ended 31.03.2018 ||For the Year ended 31.03.2017 |
|Physical Performance || || |
|Cane crushed - in Tonnes ||868552 ||740826 |
|Sugar bagged - In Quintals Financial Performance - Rs. Crores ||819141 ||683988 |
|Turnover ||425.27 ||519.29 |
|Other Income ||57.76 ||33.88 |
|Profit Before Tax ||(7.35) ||69.89 |
|Profit After Tax ||8.37 ||54.89 |
|Earnings per share ||0.73 ||4.84 |
During the financial year under review your Company recorded a Turnover of Rs. 425.27crores (Prev.Year: Rs. 519.29 cr.) including Excise Duty of Rs. 4.84 crores (Prev.Year:Rs.22.33 cr.) and Inter-divisional transfers of Rs. 95.32 crores (Prev. year: Rs.90.27cr.). The profit before finance cost and depreciation is Rs.16.00 crores. Loss before taxis Rs.7.35 crores and after adjustments relating to Deferred Tax the Profit after tax isRs.8.36 crores.
The Board of Directors recommends a dividend of Re. 0.10 per equity share of face valueof Re.1/- each on the Paid-up Equity Capital for the year ended 31.03.2018 as againstRe.0.90 per equity share approved for the previous year ended 31.03.2017. The dividendrecommended by your Directors if approved at the ensuing Annual General Meeting by theShareholders would be paid within the stipulated time.
4. SHARE CAPITAL AND RESERVES:
The share capital of the Company is Rs.11.33 crores. Other equity as at 01.04.2017 wasRs. 247.70 Crores. After transferring profit for the financial year 2017-18 i.e. Rs. 8.36Crores and after adjusting provision for dividend and tax thereon Rs. 12.28 Crores andother comprehensive income less tax of (Rs. 0.06 Crores) other equity as at 31 March 2018stood at Rs. 243.72 Crores.
5. SUBSIDIARY COMPANIES:
Your Company has two wholly-owned Subsidiaries viz The Eimco-K.C.P Limited and KCPSugars Agricultural Research Farms Limited. Both the wholly-owned subsidiaries areunlisted companies and do not fall under the category Material Subsidiary' in termsof Regulations 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. There are no Associated Companies within the meaning of section 2(6) of theCompanies Act 2013 and there has been no material change in the nature of business of thesubsidiaries. A statement containing salient features of the financial statement ofsubsidiaries in Form AOC-1 forms part of the Board's Report - Annexure X to Board'sReport.
6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A comprehensive discussion and analysis report on the industry's structure as well ason the financial and operational performance of the Company is contained in the ManagementDiscussion and Analysis Report which forms an integral part of the Board's Report(Annexure I).
7. CORPORATE GOVERNANCE REPORT:
Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 Corporate Governance Report together with the Certificate from theCompany's Statutory Auditors confirming the compliance of conditions on CorporateGovernance is given in Annexure II to Board's Report.
8. EXTRACT OF ANNUAL RETURN:
In pursuance of section 134(3) of the Companies Act 2013 the extract of the AnnualReturn has provided under section 92(3) of the Companies Act 2016 is given in AnnexureIII.
9. DIRECTOR'S RESPONSIBILITY STATEMENT:
As required by Section 134 of the Companies Act 2013 your Directors certify asfollows:
i. that in the preparation of the annual accounts the applicable Accounting Standardshave been followed and that there were no material departures there-from;
ii. that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31st March 2018 and of the Profit of the Company for that year;
iii. that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the Directors had prepared the annual accounts on a going concern basis.
v. That the directors had laid down internal financial controls to be followed by theCompany and that such financial controls are adequate and are operating effectively.
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.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013:
There is no loan / guarantee / investment covered under section 186 of the CompaniesAct 2013 during the financial year 2017-18. In pursuance of Rule 11 of Companies(Meetings of Board and its powers) Rules 2014 the requirement of section 186(3) is notapplicable.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The Company has entered into Rental Lease Agreements with related parties in theordinary course of business and on arms length basis. The value of such transactions iswell within the threshold limit prescribed under Rule 15 of Companies (Meetings of Board& its powers) Rules 2014 and hence outside the ambit of section 188 of the CompaniesAct 2013. Disclosure of particulars of contracts / arrangements entered into by theCompany with the related parties in pursuance of section 188(1) of the Companies Act inForm AOC-2 forms part of the Board's Report.
12. MATERIAL CHANGES AND COMMITMENT:
There is no change in the nature of business of the Company during the financial yearunder review. There are no material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany and the date of Board's Report.
13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE INFLOW AND OUTGO:
Information relating to Conservation of Energy Technology absorption Foreign Exchangeinflow and outgo as required under section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of Companies (Accounts) Rules 2014 is furnished in Annexure IV.
14. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The CSR policy of the Company and the details about the measures taken by the Companyon CSR activities during the financial year as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 have been disclosed in Annexure V in pursuance ofsection 135 of the Companies Act 2013.
15. PARTICULARS OF EMPLOYEES:
Statement required under Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is not attached to this Report as none of the employeeswas in receipt of remuneration as prescribed under this Section and Rules.
The information required pursuant to section 197 of the Companies Act 2013 read withRule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isfurnished in Annexure VI.
16. PERSONNEL AND INDUSTRIAL RELATIONS:
The Employee relations scenario continued to be harmonious and congenial. Acknowledgingthis your Company has been awarded for outstanding efforts in maintaining cordialIndustrial Relations and Labour Welfare by Government of Andhra Pradesh.
Director retiring by rotation:
Shri. Vinod R.Sethi Director who retires by rotation at this AGM and is eligible forreappointment is proposed to be reappointed as Director at this AGM. The Board recommendshis reappointment and accordingly resolution seeking approval of members for hisreappointment has been included in the Notice for the forthcoming Annual General Meetingalong with his brief profile.
M/s. Suri & Siva (FRN 004284S) Chartered Accountants were first appointed asStatutory Auditors of the Company at the 22nd Annual General Meeting held on 15.09.2017.In terms of their appointment they are holding office of Statutory Auditors of theCompany upto the conclusion of the 27th Annual General Meeting subject to ratification bymembers at every AGM. M/s. Suri & Siva Chartered Accountants have confirmed thattheir appointment is within the limits specified under section 141(3)(g) of the CompaniesAct 2013 and that they are not disqualified to be appointed as statutory auditors of theCompany in terms of the provisions of the proviso to section 139(1) section 141(2) andsection 141(3) of the Companies Act 2013 read with the provisions of the Companies (Audit& Auditors) Rules 2014.
The Auditors have also confirmed that they hold a valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India.
As the Annual Ratification of the appointment of Statutory Auditors at every AnnualGeneral Meeting in pursuance of proviso to section 139(1) and Rule 3(7) of Companies(Audit & Auditors) Rules 2014 has been dispensed with with effect from 7th May2018 the Company has not placed the matter relating to appointment of Auditors forratification before the members at this Annual General Meeting.
19. COST AUDIT:
M/s. SRR & Associates Cost Accountants Chennai (FRN 000992) had been appointedby the Board of Directors of the Company as Cost Auditor to conduct the Cost Audit inrespect of Sugar Industrial Alcohol Electricity Fertilizer Calcium Lactate and CO2 forthe financial year 2016-17 and their remuneration was ratified by the members at the 22ndAnnual General Meeting held on 15.09.2017. The Cost Audit Reports for 2017-18 are due forsubmission on or before 27.09.2018.
The Cost Audit reports for 2016-17 were e-filed with the Ministry of Corporate AffairsNew Delhi vide SRN G-52301405 dt. 07.09.2017.
M/s SRR & Associates confirmed that its appointment is within the limits of section148 of the Companies Act 2013 and has also certified that the Firm is free from anydisqualifications specified under section 148 of the Companies Act 2013. The AuditCommittee has also received a certificate from the said Firm of Cost Auditors certifyingits independence and arms length relationship with the Company.
20. SECRETARIAL AUDIT & SECRETARIAL STANDARDS:
In pursuance of section 204 of the Companies Act 2013 the Board of Directors at itsmeeting held on 09.02.2018 appointed M/s. VMahesh & Associates Company Secretaries inpractice as Secretarial Auditor for the financial year 2017-18 and their report isannexed with the Board's Report. (referAnnex. VII). Pursuant to section 118(10) of theCompanies Act 2013 the Company observes Secretarial Standards 1 and 2 relating to BoardMeetings and General Meetings prescribed by the Institute of Company Secretaries of
There are no disqualifications reservations or adverse remarks or disclaimers in theStatutory Auditors Cost Auditor and Secretarial Auditor's Report.
The Company since inception remains in the regime of unqualified financialstatements. The Company will comply with SEBI circular dt. 13.08.2012 and Regulation 33 ofSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and submitForm A along with Annual Report.
21. INTERNAL AUDIT:
Pursuant to Section 138(1) of the Companies Act 2013 the Company has appointedShri.S.Manisekaran Chartered Accountant (Membership No.026400) to conduct internal auditof the Company for the financial year 2018-19. The Internal Auditor reports to the AuditCommittee and submits his reports on quarterly basis.
22. CREDIT RATING:
Credit Analysis & Research Ltd (CARE) has reaffirmed the Credit Rating on yourCompany as CARE A (Single A) for long term bank facilities and reaffirmedCARE A1' (A One) for short term bank facilities and for Fixed Deposit it is CARE A(FD) [Single A (Fixed Deposit] assigned to your Company for the current year. The ratingsfor the financial year 2018-19 are awaited on this date. Measured through industryyardstick these ratings are considered to be having adequate degree of safety for a sugarmill.
23. ISO CERTIFICATION:
Your Company has been certified consecutively for the past nine years under BS EN ISO22000:2005 BS EN ISO 9001:2000 and OHSAS 18001:2007 for Manufacture of sugar associatedproducts and site activities and Occupational Health and Safety Management system byLloyd's Registry Quality Assurance Limited.
24. FIXED DEPOSITS:
As on 31.03.2018 your Company had held deposits of Rs. 68.78 crores (includingunclaimed deposits) as against Rs.51.67 crores as on 31.03.2017. As at 31.03.2018 therewere matured and unclaimed deposits amounting to Rs. 1.35 crores in respect of 124deposits. As on the date of this report amount of unclaimed deposits is Rs.0.57 crores.
In compliance with the provisions of Investors Education and Protection Fundconstituted under Section 124 of the Companies Act 2013 the Company has transferred 1deposit amounting to Rs.0.30 lakhs which remained unclaimed beyond the period of sevenyears from the date of maturity to the Investor Education and Protection Fund.
Your Directors would like to take this opportunity to express their deep sense ofgratitude to the Cane growers the Shareholders Banks Institutions Central and Stategovernments Depositors Sugar Dealers Business Associates as also other regulatoryauthorities for their continued support and cooperation.
Your Directors would also to place on record their sincere appreciation for the totalcommitment dedication and hard work put in by all the employees which contributed to theCompany's progress during the year under review.
| ||For and on behalf of the Board of Directors |
|Place : Chennai ||VINOD R. SETHI |
|Date : 25.05.2018 ||EXECUTIVE CHAIRMAN |