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Prudential Sugar Corporation Ltd.

BSE: 500342 Sector: Agri and agri inputs
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Prudential Sugar Corporation Ltd. (PRUDMOULI) - Director Report

Company director report


The Members

Your Directors have pleasure in presenting the 30th Annual Report and the AuditedFinancial Statements for the Financial Year ended March31 2021.

Financial Results

The performance for the Financial Year ended March 31 2021 is as under:

( Lakhs)

particulars Standalone Consolidated
March 31 2021 March 31 2020 March 31 2021 March 31 2020
Total Income 227.61 250.23 424.86 563.10
Profit/(Loss) before Interest & Depreciation 105.44 98.78 243.64 298.92
Less: Interest -- 0.02 -- 0.02
Profit/(Loss) after Interest & before Depreciation 105.44 98.76 243.64 298.90
Less: Depreciation 1.42 1.70 1.42 1.70
Profit/(Loss) before Tax 104.02 97.06 242.22 297.20
- Taxation for earlier years 0 0 0 0
- Current Tax 28.94 25.23 68.63 80.91
- Deferred Tax Assets 0 0 0 0
Net Profit after Tax and dividend 75.08 71.82 173.59 216.29
Add: Balance brought from previous year 3485.49 3413.67 3726.94 3510.62
Surplus/(loss) carried to Balance Sheet 3560.57 3485.49 3900.53 3726.94

State of the Affairs of the Company

After the transfer of business and assets of the Company to Natems Sugars PrivateLimited in May 2017 pursuant to the approval of the shareholders of the Company throughpostal ballot held during October/November 2014 the Board of Directors of the Company hasproposed to embark upon a Bio-organic Jaggery manufacturing project with state-of-the-arttechnology in Telangana state. The project study is in progress in consultation withexperts in this field with regard to technology process viability state incentivesetc. and an appropriate decision will be taken based on the study report.

Share Capital:

Authorized Share Capital

During the year under review there was no change in authorized share capital of theCompany. Authorized share capital of the company as on March 31 2021 was Rs.750000000comprising of 50000000 equity shares of Rs.10 each and 5000000 No of 16% CumRedeemable Preference shares of Rs.50.

Paid-up Share Capital

During the Financial Year 2020-21 there was no change in paid up share capital of theCompany.Paid up share capital of the company as on March 31 2021 was Rs.372070000comprising ofthe following:

• 15406400 equity shares of Rs.10 each

• 10345600 Equity shares of Rs.10 each

• (Converted from 2586400 Equity to preference Shares of Rs.40 each) 20000 16%Cum. Redeemable Pref. Shares of Rs.40 each

• (Rs.10 converted into Equity) 6500000 Equity shares of Rs.10 each

Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

Bonus Shares

The Company has not issued any bonus shares during the year under review.

Employees Stock Option

The Company has not provided any Stock Option Scheme to the employees.


Your Directors have not recommended any dividend on Equity Shares for the year underreview.

Transfers to Reserves

Your Board of Directors does not appropriate any amount to be transferred to GeneralReservesduring the year under review.

Fixed Deposits

During the year under review your Company has not accepted any fixed deposits withinthe meaningof Section 73 of the Companies Act 2013 read with rules made there under.

Listing of Equity Shares

The Company's Equity shares are listed at the following Recognized Stock Exchanges:

BSE Limited Phiroze JeeJeebhoy Towers Dalal Street Mumbai - 400 001;

NSE Ltd Exchange Plaza G Block Bandra Kurla Complex Bandra Mumbai - 400 051.

However the listing of the Company's shares on the Exchange is under suspension as on31.03.2020.

The Company is pursuing with BSE for revocation of suspension as early as possible.

Subsidiaries Associates and Joint venture

During the financial year 2017-18 your company had acquired the Equity Shares inPrudential Ammana Sugars Limited which has become subsidiary of the Company.

Statement containing salient features of the financial statement of the above mentionedsubsidiaryhas been given in Form AOC-1 in the Annexure-VII to this report.

Your Company does not have any Joint Ventures or Associate Companies.

Number of Meetings of the Board of Directors

The Board of Directors duly met 5 times during the financial year from April 1 2020 toMarch 31 2021 the details of which are given in the Corporate Governance Report. Themaximum interval between any two meetings did not exceed 120 days as prescribed in theCompanies Act 2013 and Secretarial Standard -1.

Independent Directors' Meeting

The Independent Directors met on February 13 2021 without the attendance ofNon-Independent Directors and members of the Management. The Independent Directorsreviewed the performance of Non-Independent Directors and the Board as a whole; theperformance of the Chairman of the Company taking into account the views of ExecutiveDirector and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.


Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 12017 pursuant to the Companies (Indian Accounting Standard) Rules 2015 as notified by theMinistry of Corporate Affairs on February 16 2015. Accordingly your Company has preparedfinancial results on standalone basis as per Ind-AS the formats for Unaudited/Auditedquarterly financial results i.e. Statement of Profit and Loss and the Unaudited/AuditedHalf-Yearly Balance Sheet are to be submitted to the stock exchanges shall be as per theformats for revised Balance Sheet and Statement of Profit and Loss as prescribed inSchedule III to the Companies Act 2013.

Extract of Annual Return

As required by Section 92(3) of the Act read with Rule 12(1) of the Companies(Management and Administration) Rules 2014 extract of the Annual Return in Form MGT-9 isavailable on the Company's website at http://www.prudentialsugar. com/shareholdersinformation.

Directors Responsibility Statement as required under Section 134 of the Companies Act2013

Pursuant to the requirement under Sec 134 (3)( C) of the Companies Act 2013 withrespect to the Directors' Responsibility Statement the Board of Directors of the Companyhereby confirms 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 are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2021 and Statement ofProfit and Loss of the Company for that period;

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 for the Financial Year ended March31 2021 on a going concern basis;

v. the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

vi. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Statement on Declaration given by Independent Directors under Sub-Section (6) ofSection 149

The independent directors have submitted the declaration of independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section(6).

Management Discussion and Analysis

In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion and Analysis discusses the key issues concerning the business and carried on bythe Company and the same is enclosed as Annexure - V to this Report.

Corporate Social Responsibility (CSR) Initiatives:

Section 135 of the Companies Act 2013 provides the threshold limit for applicabilityof the CSR to a Company ie.

(a) net worth of the Company to be Rs.500 crore or more; or

(b) turnover of the company to be Rs. 1000 crore or more; or

(c) net profit of the company to be Rs. 5 crore or more As the Company does not fallunder any of the threshold limits given above the provisions of section 135 are notapplicable to the Company.

Audit Committee

The Composition of the Audit Committee is provided in the Corporate Governance Reportforming part of this report. All the recommendations made by the Audit Committee wereaccepted by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of the following Directors namelyMr. Y. Ravinder Reddy Chairman Ms. Sadhana Bhansali and Mr. Kishore Jhunjhunwala.

Brief description of terms of reference:

* Identify persons who are qualified to become directors and who may be appointed insenior management in accordance with the criteria laid down and recommend to the Board fortheir appointment and removal;

* carry on the evaluation of every director's performance;

* formulation of the criteria for determining qualifications positive attributes andindependence of a director;

* recommend to the Board a policy relating to the remuneration of the directors keymanagerial personnel and other employees;

* formulation of criteria for evaluation of Independent Directors and the Board;

* devising a policy on Board diversity; and

* any other matter as the Board may decide from time to time.

Nomination and Remuneration policy

In compliance to the provisions of Section 178 of the Companies Act 2013 andRegulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Nomination and Remuneration Committee has recommended to the Board a Nomination andRemuneration policy with respect to appointment / nomination and remuneration payable forthe Directors Key Managerial Personnel and senior level employees of the Company. Thesaid policy has been adopted by the Board and the same was discussed in the CorporateGovernance Report. We affirm that the remuneration paid to the directors is as per theterms laid out in the nomination and remuneration policy of the Company.

Particulars of Loans Guarantees or Investments under Section 186

The company has not given any Loans Guarantees and made Investments during theFinancial Year ended on March 31 2021 in compliance with the provisions of Section 186 ofthe Companies Act 2013 read with Companies (Meetings of Board and its Powers) Rules2014.

Particulars of Contracts or Arrangements with Related Parties Referred to inSub-Section (1) of Section 188

All transactions entered by the Company with Related Parties were in the Ordinarycourse of Business and are at Arm's Length pricing basis. The Audit Committee grantedapprovals for the transactions and the same were reviewed by the Committee and the Boardof Directors.

There were no materially significant transactions with Related Parties during thefinancial year 2020-21 which were in conflict with the interest of the Company. Thedetails of contracts and arrangements with related parties as referred to in Section188(1) of the Companies Act 2013 are given as Annexure - I to the Board's Reportin form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014.

During the year under review there are no contracts / arrangements / transactionsentered by the Company during the financial year with related parties and do not attractthe provisions of Section 188 of the Companies Act 2013.

The conservation of energy technology absorption foreign exchange earnings and outgopursuant to provisions of Section 134(3)(m) of the Companies Act 2013 (Act) read with theCompanies (Accounts) Rules 2014

Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies(Accounts) Rules 2014 is prepared and the same is enclosed as Annexure - II tothis Report.

Mechanism for Evaluation of Board

Pursuant to section Sec 134 (3)(q) read with Rule 8 (5) (viii) of Companies (Accounts)Rules evaluation of all Board members is done on an annual basis. The evaluation is doneby the Board Nomination and Remuneration Committee and Independent Directors withspecific focus on the performance and effective functioning of the Board and IndividualDirectors.

A. Criteria for evaluation of Board of Directors as a whole

i. The frequency of meetings;

ii. The length of meetings;

iii. The administration of meeting;

iv. The number of committees and their roles;

v. The flow of information to board members and between board members;

vi. The quality and quantity of information; and

vii. The Disclosure of Information to the stakeholders.

B. Criteria for evaluation of the Individual Directors

i. Ability to contribute and monitor corporate governance practices;

ii. Ability to contribute by introducing best practices to address top managementissues;

iii. Participation in long term strategic planning;

iv. Commitment to the fulfillment of director obligations and fiduciaryresponsibilities;

v. Guiding strategy;

vi. Monitoring management performance and development;

vii. Statutory compliance & Corporate governance;

viii. Attendance and contribution at Board /Committee meetings;

ix. Time spent by each of the member; and

x. Core competencies.

Details of Directors or Key Managerial Personnel who were appointed or have resignedduring the Year

In terms of Section 152 of the Companies Act 2013 Mr. Kurra Subba Rao Director wouldretire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr. KurraSubba Rao has offered himself for re-appointment.

Based on the confirmations received from the Director none of the Directors aredisqualified from appointment under Section 164 of the Companies Act 2013.


The Company has not accepted any deposits from the public in terms of Section 73 of theCompanies Act 2013. Statutory Auditors

M/s. R Pugalia & Co. Chartered Accountants (Firm Registration No.318188S) wereappointed as Statutory Auditors of your Company to hold office from the conclusion of the26th AGM until the conclusion of the 31st AGM to be held in the year 2022. The requirementto place the matter relating to appointment of Auditors for ratification by members atevery Annual General Meeting is done away with vide Notification dated May 7 2018 issuedby the Ministry of Corporate Affairs New Delhi. Accordingly no resolution is proposedfor ratification of appointment of Auditors who were appointed in the Annual GeneralMeeting held on March 31 2018.

Qualification by Statutory Auditors

There are no Qualification/Reservation or Adverse remarks contained in IndependentAuditors Report under Paras: Basis for Qualified opinion:

A. Since all the shares of the Company were converted into equity Share the Company didnot redeem the 16% Redeemable Cumulative Preference Shares and did not provide for arrearsof dividend thereon.

B. In view of very limited strength of employees presently working with the Companythe requirements of AS-15 Employee Benefits in respect of gratuity could not be compliedwith. However provision for gratuity as required under Payment of Gratuity Act has beenprovided for.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedM/s.RBM & Associates Practicing Company Secretaries for conducting Secretarial Auditof the Company for the financial year 2020-21.

Secretarial Audit Report issued by RBM & Associates Company Secretaries in formMR-3 is enclosed as Annexure - III to this Annual Report.

Cost Auditors

The appointment of Cost Auditors for the year ended March 31 2021 was not mandatedsince the Company has not been engaged in manufacturing operations.

Internal Auditors

The Board of Directors of the Company has opined that it was not required to assign thefunction of Internal Audit to an independent firm of Chartered Accountants to carry outInternal Auditing of books of accounts in pursuance of Section 138 of the Companies Act2013 read with rules made there under in view of the fact that there were no commercial/operational transactions during the year.

Internal financial control and its adequacy

The Board of your Company has laid down internal financial controls which comply withthe provisions of the Companies Act 2013 and Listing Regulation with Stock Exchange andthat such internal financial controls are adequate and operating effectively. Your Companyhas adopted policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.

Corporate Governance

The Company is committed to good corporate governance in line with the SEBI (LODR)Regulations 2015 and Provisions Rules and Regulations of the Companies Act 2013. TheCompany is in compliance with the provisions on corporate governance specified in theListing Agreement with BSE. A certificate of compliance from M/s. R. Pugalia & Co.Chartered Accountants and the report on Corporate Governance form part of this Directors'Report as Annexure VI & VIII.

Vigil Mechanism

The Board of Directors have adopted Whistle Blower Policy. The Whistle Blower Policyaims at conducting the affairs of the company in a fair and transparent manner by adoptinghighest standards of professionalism honesty integrity and ethical behavior. Allpermanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairperson of the audit committee inexceptional cases.

Secretarial Auditor Report

As per the provisions of Section 204 of the Companies Act 2013 the Board of Directorshas appointed M/s. RBM & Associates Company Secretaries as Secretarial Auditors toconduct Secretarial audit of the company for the Financial year ended on March 31 2022.

Statement of particulars of appointment and remuneration of managerial personnel

The Statement of particulars of Appointment and Remuneration of Managerial personnel asper Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is enclosed as Annexure - IV to this Annual Report.

There are no employees whose particulars need to be furnished pursuant to Rule 5(2) TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

Details in respect of adequacy of internal financial controls with reference to theFinancial Statements

1. The Company has set internal control systems to maintain accurate and completeaccounting records to safeguard its assets to prevent and detect any frauds and errors.

2. The Company has appointed Internal Auditors to observe the Internal Controlswhether the workflow of organization is being done through the approved policies of theCompany. In every Quarter during the approval of Financial Statements Internal Auditorswill present the Internal Audit Report and Management Comments on the Internal Auditobservations; and

3. The Board of Directors of the Company have adopted various policies like RelatedParty Transactions Policy Fixed Assets Policy Whistle Blower Policy Policy to determineMaterial Subsidiaries and such other procedures for ensuring the orderly and efficientconduct of its business for safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

Change in the nature of business

Pursuant to the sale of the business and assets of the Company the Board of Directorsof the Company is exploring opportunities in diversified areas of business like puttingup a modern Bio- organic Jaggery manufacturing plant in the state of Telangana. Besidesthe Company is also planning to venture in to import/export of raw-sugar and white sugardepending upon the opportunities and public policies of the Government from time to time.

The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

As disclosed in the Directors' Report in the Balance Sheet for the previous FinancialYear ended March 31 2020 a few legal cases which were filed by Mr. Ch. Krishna Murthyagainst the Company and by the Company against him though not significant and would inany manner impact the going concern status of the Company and the Company's operations infuture are pending at various stages before the respective Courts/Tribunals.

The details of the cases filed:

S.No. Case No. Status of case
i. against the Company
1. OS 821/2014 The Suit filed by Mr. Ch. Krishna Murthy and Sri Venkateshwara Sugar Industries Private Limited against Mr. Vinod Baid and the Company before the II Additional Chief Judge City Civil Court Hyderabad along with Interim Application IA No. 2074 by 2014) seeking injunction on the Postal Ballot conducted by the Company for sale/transfer of the Company's Sugar business and other consequential acts relating to the postal ballot. While the IA 2074 was disposed off in favor of the Company the Main Suit is presently pending disposal before the Hon'ble Court.
S.No. Case No. Status of case
2. OP 2956/2014 Mr. Ch. Krishna Murthy filed a petition u/s 9 of Arbitration Act before the XXV Additional Chief Judge City Civil Court Hyderabad seeking direction from the Hon'ble Court to appoint a Receiver/Auditor to protect his alleged investment in the Company. The matter is pending before the Hon'ble Court.
3. CP 184/241/ Mr. Ch. Krishna Murthy filed a Company Petition against the Company and the Directors of the Company before the National Company Law Tribunal Hyderabad for multiple interim reliefs relating to the operations of the Company and the transfer of assets of the Company executed in favor of Natems Sugar Private Limited. Pursuant to the Hon'ble Supreme Court's Order the Company has filed its counter and the matter is pending adjudication before the Tribunal as on date.
ii. by the Company
1. OS 384/2013 The Company had filed a Suit against Mr. Ch. Krishna Murthy and six Additional Directors illegally inducted on the Board of the Company by Mr. Ch. Krishna Murthy seeking a direction from the Hon'ble Court to restrain the Respondents from claiming to be the Directors of the Company and also illegally representing the Company. The matter is pending before the Hon'ble Court.
2. OS 4715/2015 The Company has filed the said Suit against Teja Charities Tirupati in which Mr. Ch. Krishna Murthy is interested before the Hon'ble Chief Judge City Civil Court Hyderabad seeking decree for a sum of Rs.1.00 crore being the loan given by the Company to Teja Charities along with interest. The Hon'ble Court was pleased to issue decree in favour of the Company and the execution of the Decree is being pursued.
3. WP 23442/2015 The Company filed the said WP against IFCI and Sri Venkateshwara Sugar Industries Private Limited before the Hon'ble High Court of Judicature at Hyderabad seeking direction to IFCI to release the original Title documents of the Company in terms of IFCI's letter of settlement of dues cleared by Sri Venkateshwara Sugar Industries Private Limited as the Assignee of the said debt. The case is presently pending before the Hon'ble Court.
4. WP22515/2015 The Company filed Writ Petition No. 22515/2015 against the Registrar of Companies Hyderabad before the Hon'ble High Court of Judicature at Hyderabad seeking direction to the RoC to demark the Company "as having management dispute" as it was arbitrary and illegal and against natural justice. The said Petition has been heard by the Hon'ble Court and the Orders are reserved as on date.

Material changes and commitments affecting the financial position of the Company

There were no material changes and commitments affecting the financial position of theCompany during the year.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

During the financial year ended March 31 2021 the Company has not received anyComplaints pertaining to Sexual Harassment.


We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. The policies are reviewed periodically by the Board and updatedbased on need and new compliance requirement.

i. Whistleblower Policy (Policy on vigil mechanism)

The Company has adopted the whistleblower mechanism for directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany's code of conduct and ethics. There has been no change to the Whistleblower Policyadopted by the Company during fiscal 2019-20.

ii. Policy for Determining Materiality for Disclosures

This policy applies to disclosures of material events affecting PSCL. This policy is inaddition to the Company's corporate policy statement on investor relations which dealswith the dissemination of unpublished price- sensitive information.

iii. Policy on Document Retention

The policy deals with the retention and preservation of corporate records of theCompany.

Human Resources

The company believes that the quality of its employees is the key to its success in thelong run and i s committed to provide necessary human resource development and trainingopportunity to equip them with skills which would enable them to adapt contemporarytechnological advances.


The Directors take this opportunity to place on record their sincere thanks to theBanks and Financial Institutions Insurance Companies Central and State GovernmentDepartments and the shareholders for their support and co-operation extended to theCompany from time to time. Directors are pleased to record their appreciation of thesincere and dedicated services of the employees and workmen at all levels.

By Order of the Board of Directors
for Prudential Sugar Corporation Limited
Kurra Subba Rao Y Ravinder Reddy
Place: Hyderabad Whole-time Director Director
Date : September 06 2021 DIN: 02552019 DIN: 00011040