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) ||99505.83 ||95194.48 |
|Profit before Finance Costs Tax Depreciation and Amortization ||12714.88 ||11680.28 |
|Less: Depreciation & Amortization Expenses ||2092.01 ||1918.51 |
|Finance Costs ||3977.97 ||5530.65 |
|Profit/(Loss) Before Tax ||6644.90 ||4231.12 |
|Less: Provision for Tax: || || |
|Current Tax ||1147.06 ||750.77 |
|Income Tax for earlier years ||0.08 ||- |
|Deferred Tax Charge ||896.05 ||772.23 |
|Profit/(Loss) After Tax ||4607.71 ||2708.12 |
2. Operating Performance
A detailed analysis of the Company's operations futureexpectations and business environment has been given in the Management Discussion &Analysis Report which 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. 99787.76 lakhs (includingother income aggregating to Rs 281.93 lakhs) during the financial year ended 31st March2022. The Revenue from Operations (Gross) of the Company for the year 2021-22 stood at Rs.99505.83 lakhs. The Profit before Finance Costs Tax Depreciation and Amortisation forthe year under review stood at Rs. 12714.88 lakhs representing 12.74% of the totalrevenue.
There is no change in the nature of business of the Company. There wereno significant or material orders passed by regulators courts or tribunals impacting theCompany's operation 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.
Your Company had adopted a dividend distribution policy that balancesthe dual objectives of appropriately rewarding Members through dividends and retainingcapital in order to maintain a healthy capital adequacy ratio to support long term growthof your Company.
Consistent with this policy your Board has recommended a dividend ofRs 6.50 p. on Equity Shares (65%) for the financial year 2021-22 to the Members of yourCompany. The proposal is subject to the approval of the Members at the 8th Annual GeneralMeeting (AGM) of your Company scheduled to be held on July 21 2022. The dividend willentail a cash outflow of Rs. 915.96 lakhs (previous year Rs. 563.67 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.401000000/-(Rupees Forty crore and ten lakhs) divided into 25100000 (Two crore_fty one lakhs) Equity Shares of Rs. 10/- (Rupees ten) each and 1500000 (Fifteen crore)Preference Shares of Rs.10/- and there is no change in the authorised capital. The Issuedand Subscribed Share Capital of your Company as on 31st March 2022 stood at Rs.140916300/- divided into 14091630 Equity Shares of Rs.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 Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("Listing Regulations") as amended from time to time. The said Policy isbeing disclosed on the Company's website at the weblink http://birla-sugar.com/Assets/Magadh/Magadh-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 six Non-Executive Directors havingexperience in varied fields and a Whole time Director. Out of six Non-Executive Directorsfive of them are Independent Directors and one Promoter Director. Mr Chandra ShekharNopany is the Promoter Chairperson of the Company.
Mr. Chandra Shekhar Nopany will retire by rotation at the ensuing AGMand being eligible has offered himself for re-appointment as Director of the Company.
The shareholders of the Company have have vide resolution passedthrough Postal Ballot on March 13 2022 re-appointed Messrs Padam Kumar Khaitan (DIN 00019700) Ishwari Prosad Singh Roy (DIN:00217532) Yashwant Kumar Daga(DIN:00040632) Raj Kumar Bagri (DIN:00231766) and Shashi Sharma (DIN:02904948) asIndependent Directors of the Company for a second term to hold office for a term 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. All theIndependent Directors are exempt from the requirement to undertake online pro_ciencyself-assessment test conducted by the Indian Institute of Corporate Affairs.
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 by way of Special Resolution passed by PostalBallot for continuation of directorship of Mr Ishwari Prosad Singh Roy beyond the age of75 (seventy-five) years as he would attain the said prescribed age limit during theduring the midst of his second term.
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 Listing Regulations.
Other information on the Directors including required particulars ofDirector retiring by rotation is provided in the Notice convening the AGM. In pursuance ofthe provisions of the Companies Act 2013 and according to Regulation 25(3) of the ListingRegulations the Performance Evaluation Criteria has been laid down for effectiveevaluation of performance of the Board of Directors the Committees thereof and individualDirectors including the Chairperson of the Company. After detailed discussion at Boardlevel as well as taking input from each Director Nomination and Remuneration Committeefinalized the format / questionnaires containing various parameters to evaluate theperformance of Board and its committee(s) Individual Directors and Chairperson of theCompany. The performance evaluation parameters are based on their roles andresponsibilities contribution to the Company's goals decision making process flowof information and various other aspects. The evaluation of performance of the Board as awhole Committees of the Board Individual Directors including the Chairperson of theCompany was carried out for the Financial Year 2021-22. Nomination and RemunerationCommittee evaluated the performance of the individual Director. The Independent Directorsin their separate meeting held on 14th March 2022 carried out the evaluation of the Boardof Directors as a whole Chairperson of the Company and Non-Independent Directors. Theevaluation of Independent Directors was carried out without the presence of concernedDirector. The Chairperson of Nomination and Remuneration Committee has submitted report ofthe respective evaluations to the Chairperson of the Company. Based on the questionnairesreceived from the Directors and considering the reports of Chairperson of Nomination andRemuneration Committee the Board has evaluated its own performance and that of itscommittees 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 Sunil Choraria Chief Financial Officerresigned from the services of the Company with effect from August 3 2021. Based on therecommendation of the Nomination and Remuneration Committee and the Audit Committee theBoard of Directors at its meeting held on August 3 2021 appointed Mr Sudershan Bajaj asChief Financial Officer with effect from the said date. The Key Managerial Personnel ofthe Company as on 31st March 2022 are as under: a. Mr. Chandra Mohan Whole time Directorb. Mr. Sudershan Bajaj Chief Financial Officer c. Mr. S Subramanian Company SecretaryAll Directors Key Managerial Personnel and Senior Management of the Company haveconfirmed compliance with the Code of Conduct applicable to Directors & employees ofthe Company and a declaration to the said effect by the Whole-time Director is made partof Corporate Governance Report which forms part of this report. There has been no changein this policy during the year under review. The Code is available on the Company'swebsite at the weblink http://birla-sugar.com/Assets/Magadh/Magadh-Sugar-Code-of-Conduct.pdf.All Directors have confirmed compliance with the provisions of Section 164 of theCompanies 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/Magadh/MSEL-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/Magadh/MSEL-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 Narkatiaganj Sidhwalia and Hasanpur. 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/Magadh/Magadh-Sugar-CSR-Policy.pdf. There hasbeen no change 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.138.96 lakhs. As against this the Companyhad spent Rs. 142.21 lakhs on CSR projects / programs during the Financial Year 2021-22.
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 6 (Six) 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 with the applicable Secretarial Standardsprescribed under Section 118(10) of the Companies Act 2013 of the Companies Act 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 andliberty at 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 onarm's length 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/Magadh/Magadh-Sugar-Related-Party-Transaction-Policy.pdf. ThePolicy on Related Part Transactions was aligned with the changes recommended by theMCA/SEBI in this regard.
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 thoughnot mandatory has been constituted voluntarily comprising of an Independent DirectorWhole time Director Chief Financial Officer and the Group President to oversee the riskmanagement process in the Company with an objective to review the major risks which effectthe Company from both the external and the internal environment perspective. Appropriateactions have been initiated to either mitigate partially mitigate transfer or accept therisk (if need be) and monitor the risks on a regular basis. The details of the terms ofreference number and date of meeting attendance of director and remuneration paid tothem are separately provided in the 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 recordsand timely preparation and reporting of reliable financial statements/informationsafeguarding of assets prevention and detection of frauds and errors. The evaluations ofthese internal financial controls were done through the internal audit process and werealso reviewed by the Statutory Auditors. Based on their view of these reportedevaluations the directors confirm that for the preparation of financial statements forthe financial year ended March 31 2022 the applicable Accounting Standards have beenfollowed and the internal financial controls are generally found to be adequate and wereoperating effectively & that no significant de_ciencies 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. During the year under review there has been change in this policy with respect toleak or suspected leak of Unpublished Price Sensitive Information has been incorporated sothat whistle blowers can report concerns. The mechanism provides adequate safeguardsagainst victimisation of persons who use this mechanism. The brief detail about thismechanism may be accessed on the Company's website at the weblink http://www.birla-sugar.com/Assets/Magadh/Magadh-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 "AnnexureB" to this Report. All the Directors of the Company and senior managementpersonnel have confirmed the compliance of Code of Conduct of the Company. The declarationof the Whole-time Director confirming compliance with the Code of Conduct' ofthe Company is enclosed as "Annexure C" to this Report and Auditor'sCertificate confirming compliance with the conditions of Corporate Governance is enclosedas "Annexure D" to this Report. Pursuant to Section 92(3) of the Act theAnnual Return as on 31st March 2022 is available on the website of the Company weblink: http://birla-sugar.com/Magadh-Shareholders-Info/Annual-Returns-Magadh
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
The shareholders of the Company at the AGM held on August 1 2017 hadapproved the appointment Messrs Singhi & Co Chartered Accountants (Firm RegistrationNo. 302049E) as Auditors of the Company to hold office for a term of 5 (five) consecutiveyears from the conclusion of the Third AGM of the Company held on August 1 2017 till theconclusion of Eighth AGM of the Company. M/s Singhi & Co. Chartered Accountants willretire at the conclusion of the ensuing AGM of the Company. The Board places on record itsappreciation of the services rendered by M/s. Singhi & Co during their associationwith the Company.
The Notes to the Financial Statements read with the Auditor'sReports are self-explanatory and therefore do not call for further comments orexplanations. There has been no qualification reservation adverse remark or disclaimerin the Auditor's Reports.
On the recommendations of the Audit Committee the Board recommends tothe shareholders of the Company the appointment of M/s. B S R & Co LLP CharteredAccountants (Firm Registration No. 101248W/W-100022) as the Statutory Auditors of theCompany to hold office from the conclusion of 8th AGM of the Company till the conclusionof 13th AGM of the Company to be held 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 M/s DRadhakrishnan & Co. Cost Accountants as the Cost Auditor to audit the cost accountsof the Company for the financial year 2022-23. As required under the Companies Act 2013the remuneration payable to the Cost Auditor is required to be placed before the Membersin a general meeting for their rati_cation.
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 the auditors the secretarial auditors and costauditors have not reported any fraud under Section 143(12) of the Companies Act 2013 andthe 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 information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed 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"to this 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 thepreparation of the annual financial statements for the year ended March 31 2022 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any; b. that such accounting policies as mentioned in Note 3 ofthe Notes to the Financial Statements have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2022 and of theprofit or loss of the Company for the year ended on that date; c. that proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d. that theannual financial statements have been prepared on a going concern basis; e. that properinternal financial controls were in place and that the financial controls were adequateand were operating effectively. f. that systems to ensure compliance with the provisionsof all applicable laws were in place and were adequate and operating effectively.
29. CEO/CFO CERTIFICATION
Mr. Chandra Mohan the Whole time Director and Mr. Sudershan BajajChief Financial Officer have submitted certificates to the Board as contemplated underRegulation 17(8) of the SEBI (LODR) Regulations 2015.
Your Directors take this opportunity of recording theirappreciation of the shareholders financial institutions bankers suppliers and canegrowers for extending their support to the Company. Your Directors are also grateful tovarious ministries in the Central Government and State Government of Bihar 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 |
|Place: Kolkata ||Chandra Shekhar Nopany |
|Dated: 11th May 2022 ||Chairperson |