To the Members
The Board of Directors of the Company presents its Annual Report together with theAudited Financial Statements of the Company for the year ended 31st March 2020.
|FINANCIAL HIGHLIGHTS || ||(RS IN LAKHS) |
|Particulars ||2019-20 ||2018-19 |
|Revenue || || |
|Sugar Division ||49666.49 ||27020.40 |
|Distillery Division ||13071.72 ||8522.92 |
|Cogeneration Division ||1604.67 ||1189.69 |
|Soya Division ||15958.13 ||13772.92 |
|Total Revenue ||80301.01 ||50505.93 |
|Other Income ||12089.63 ||15207.84 |
|Total Income ||92390.64 ||65713.77 |
|Profit/(Loss) before Finance Cost and Depreciation & || || |
|Amortisation and Exceptional Item ||4294.25 ||9610.22 |
|Finance Cost ||20197.10 ||25947.82 |
|Provision for Depreciation ||4931.06 ||5158.53 |
|Net Profit before Exceptional Item and Tax ||(20833.91) ||(21496.13) |
|Exceptional Items gain / (Loss) ||- ||(5180.09) |
|Net Profit before Tax ||(20833.91) ||(26676.22) |
|Provision for Tax ||(241.52) ||(5274.80) |
|Net Profit after Tax ||(20592.39) ||(21401.42) |
|Comprehensive Income ||19.44 ||76.35 |
|Total comprehensive Income ||(20572.95) ||(21325.07) |
REVIEW OF OPERATION
During the financial year the quantum of sugarcane crush was higher as compared to theprevious year. however due to non-availability of adequate sugarcane for optimalcrushing there was no crushing operation in Modakurichi unit during the financial yearand in Sivaganga unit the crushing was only for a short period. The available sugarcanein these factory areas were crushed in Sakthinagar unit. As compared to previous year therecovery percentage was slightly less. The performance of Dhenkanal unit was moderate withreduction in the level of crushing and in recovery percentage. There was improvement inthe production of industrial alcohol. There has been increase in the selling price ofsugar and industrial alcohol resulting in higher average realisation. generation and saleof power showed substantial improvement; but there has been a fall in the average per unitprice for power. The operational performance of Soya unit is satisfactory. There is nochange in the nature of business during the financial year and until the date of thisreport.
The quantum of sugarcane crushed at various units of the Company during the year2019-20 is as under:
|Name of the unit ||Cane crushed (in mt) |
|Sakthinagar ||1024745 |
|Sivaganga ||21307 |
|Dhenkanal ||249125 |
During the year under review 1.20 lakh MT of sugar was produced by the Company ascompared to 0.81 lakh MT in the previous year. The quantum of sugar sales and the salevalue have gone up as compared to the previous year.
During the year under review 142.66 lakh litres (previous year 81.68 lakh litres) ofindustrial alcohol was produced at Sakthinagar Distillery unit and 90.71 lakh litres(previous year 70.94 lakh litres) at Dhenkanal Distillery unit.
27272 tonnes (previous year 25027 tonnes) of soya bean was crushed in the Soya Plantduring the year under review. This Division had exported products worth Rs.1672.13 lakhs(previous year Rs.1549.58 lakhs) to various countries.
The total power generated in the co-generation plants during the financial year was1087.46 lakh units (Previous year 659.03 lakh units) out of which 557.45 lakh units(Previous year 343.94 lakh units) of power was exported. The Company is selling the powerthrough Indian Energy Exchange (IEX) and also directly to third parties.
IMPACT OF COVID-19 ON OPERATION
The Covid-19 pandemic has not made a material impact on the sugar industry as itsoutbreak was almost at the fag end of crushing period for the season. The Company'sfactories remained shut down for almost one month due to dislocation of labour force.After resuming operation crushing of the backlog of sugarcane available was completedwith slight reduction in recovery the effect of which is not significant. Since sugarindustry is agro based and labour intensive availability of working labour plays a majorrole in carrying out the agricultural operation on which success of sugar industrydepends. It is not possible to assess the overall impact of covid-19 at present.
Although Covid-19 does not have direct material impact on current operation of millsthe future outlook of the industry depends on many factors like revival of the economyavailability of working capital and labour force and improvement in consumption patternand change in people's outlook on spending etc. besides good monsoon. The beginning ofthe current south-west monsoon has been normal and is encouraging. The improvement in thefinancial performance depends on the availability of sugarcane for crushing and prevalenceof economical market prices for sugar and other products. Proposal for restructuring ofentire debt of the Company is being finalised. Steps are being taken for disposal ofcertain assets. With these initiatives the debt of the Company is aimed to be reduced to areasonable level.
The Company has not accepted any deposit during the financial year under review. At theend of the financial year there was no unclaimed deposit.
With a view to reduce the liabilities of the Company to banks and financialinstitutions the Board of Directors have approved disposal of the assets belonging toSugar and Beverage units at Sivaganga subject to the approval of the banks/financialinstitutions to which inter alia these assets have been mortgaged and of the members byspecial resolution. Necessary special resolution will be placed before the members of theCompany after obtaining the approvals of the lenders. One of the term lending banks hassanctioned one-time settlement of the loans sanctioned by it and fulfilment of the termsof OTS has been delayed.
Sri M.Srinivaasan (DIN 00102387) retires by rotation at the ensuing Annual generalMeeting and being eligible has offered for re-appointment.
The following Independent Directors viz.Sri C.Rangamani Sri S.S.Muthuvelappan SriP.K.Chandran Sri N.K.vijayan Sri K.v.Ramachandran Sri S.Chandrasekhar and SriS.Balasubhramanian have been re-appointed for the second term of five consecutive yearsfrom 30th September 2019 to 29th September 2024 at the last Annual general Meeting of theCompany. The five-year term of office as Independent Director of Smt. Priya Bhansali willexpire on 30th September 2020. A Notice proposing her re-appointment has been receivedfrom a member of the Company under Section 160 of the Companies Act 2013. This IndependentDirector has registered herself in the databank for Independent Directors maintained underSection 150 of the Companies Act 2013 and has given her consent for reappointment for thesecond term of five consecutive years. She has declared that she fulfils the criteria ofindependence as stipulated in the Companies Act 2013 and in SEBI (LODR) Regulations 2015and that she is not disqualified for appointment as a Director under the said statutes.Based on the evaluation of the performance and considering the contributions made duringher tenure of office as Independent Director and taking into account her skill set and onthe recommendation of the Nomination and Remuneration Committee the Board of Directorshas formed an opinion that Smt. Priya Bhansali is a person of integrity and possessesrelevant expertise and experience and recommended for approval of the members of theCompany the re-appointment of Smt. Priya Bhansali as Independent Director for the secondterm of five consecutive years from 1st October 2020 to 30th September 2025 at the ensuingAnnual general Meeting of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
In pursuance of Section 134(5) of the Companies Act 2013 the Directors hereby confirmthat:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;
(b) the Directors had 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 the end of the financial year andof the loss of the Company for that financial year;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
MEETINGS OF BOARD OF DIRECTORS
The Board met five times during the financial year ended 31st March 2020. The detailsof the Board Meetings and the attendance of the Directors are given in the Corporategovernance Report.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises the following Directors as its members:
Sri C.Rangamani Chairman
Smt. Priya Bhansali
Details regarding meetings of the Audit Committee and the attendance of the members aregiven in the Corporate governance Report.
Pursuant to the provisions contained in the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a formal annual evaluation ofthe performance of the Board its Committees and of individual Directors has been made.The manner in which the evaluation was carried out and the process adopted are given inthe Corporate governance Report.
DETAILS OF REMUNERATION TO DIRECTORS
Details of ratio of remuneration to each Director to the median employee's remunerationand other disclosures required under Section 197(12) of the Companies Act 2013 and Rule5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are given in Annexure-A.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee and the details of theCommittee are set out in the Corporate governance Report. Pursuant to Regulation 17(9) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board haslaid down risk management policy to identify evaluate and mitigate risks. It seeks toensure transparency and to minimise adverse impact on the business operations of theCompany.
The Company does not have any exposure to commodity risk except to the extent of itsown production of sugar the main product of manufacture of the Company the selling priceof which is subject to market fluctuations.
IN TERNAL CONTROL
The Company has internal control system commensurate with the size of the Company.Adequate procedures are set out for detecting and preventing frauds and for protecting theCompany's assets. The head of Internal Audit Team reports to the Chairman of the AuditCommittee for the purpose of maintaining independence and Internal Audit Reports areplaced before the Audit Committee together with statement of significant audit observationand the suggested corrective action followed by a report on action taken thereon. Furtherthe Company has adequate internal financial control with respect to the financialstatements.
The Company has a whistle blower policy and a vigil mechanism for directors andemployees to report genuine concerns in the prescribed manner. The vigil mechanismprovides adequate safeguards against victimisation and for direct access to the Chairmanof the Audit Committee in appropriate or exceptional cases. The details of the whistleblower policy are posted on the website of the Company. No complaint has been receivedunder this mechanism during the year under review.
A Report on Corporate governance along with Auditors Certificate with respect to itscompliance forms part of this Report. A detailed Management Discussion and Analysis Reportalso forms part of this Report.
OTHER DISCLOSURES UNDER THE COMPANIES ACT 2013
i. Extract of Annual Return The Extract of the Annual Return is given in Annexure B.ii. Changes in Share Capital
There is no change in the share capital during the financial year under review. iii.Policy on Directors Appointment and Remuneration
The Company's policy for selection and appointment of directors senior managementpersonnel and fixation of their remuneration including criteria for determiningqualifications positive attributes independence of a director are available in theCompany's website www.sakthisugars.com and the salient features of the Policy are given inAnnexure-C. iv. Related Party Transactions All the related party transactions are at arm'slength basis. Prior approval of the Audit Committee and/or Board as the case may be hasbeen obtained for the transactions with related parties. A statement of all related partytransactions is placed before the Audit Committee on quarterly basis. There has been nocontract or arrangement with related parties attracting the provisions of Section 188(1)of the Companies Act 2013 during the financial year under review.
The Related Party Transactions Policy as approved by the Board is uploaded on theCompany's website www.sakthisugars. com. The details of the transactions with RelatedParties are provided in the accompanying financial statements. v. Statement ofdeclarations given by Independent Directors The Independent Directors have given theirdeclarations to the Board to the effect that they meet with the criteria of independenceas provided in Section 149(6) of the Companies Act 2013 and the relevant rules.They havealso declared confirming compliance of Rule 6(1) and (2) of the Companies (Appointment andQualification of Directors) Rules 2014 regarding inclusion of their names in the databank.vi. Significant material orders passed by court or authorities There are no significantorders passed by Court or regulatory authorities which would impact the status of theCompany and its future operations. vii. Particulars of loans guarantees or investmentsThe Company has not given any loan or guarantee or has acquired any security during thefinancial year 2019-20 under Section 186 of the Companies Act 2013. viii. EnergyConservation Technology Absorption and Foreign Exchange Earnings and Outgo Theinformation on conservation of energy technology absorption and foreign exchange earningsand out go as required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 is given in Annexure-D. ix. There are no materialchanges affecting the financial position of the Company which has occurred between the endof the financial year and the date of this report. x. The Company has complied with theSecretarial Standards as may be applicable to the Company.
M/s. P.K. Nagarajan & Co. Chartered Accountants (Firm Registration Number016676S) have been appointed by the members as Statutory Auditors of the Company for aperiod of five consecutive years from the conclusion of the 55th Annual general Meetingheld on 27th September 2017 till the conclusion of the 60th Annual general Meeting. Theyhave confirmed that they are not disqualified for continuing as Statutory Auditors of theCompany.
Pursuant to Section 204 of the Companies Act 2013 and Regulation 24A of SEBI (LODR)Regulations 2015 the Board of Directors of the Company has appointed M/s.S.Krishnamurthy& Co. Company Secretaries Chennai as Secretarial Auditors to undertake thesecretarial audit of the Company for the year ended 31st March 2020. Secretarial AuditReport of M/s. S.Krishnamurthy & Co. Company Secretaries Chennai for the year ended31st March 2020 is annexed as Annexure-E. As the Company does not have any subsidiary thequestion of appointment of Secretarial Auditor for material subsidiary does not arise.
The Company is required to maintain cost records as specified by the Central governmentunder Section 148(1) of the Companies Act 2013 and accordingly such accounts and recordsare made and maintained by the Company. M/s. STR & Associates Cost & ManagementAccountants Tiruchirapalli are the Cost Auditors for auditing the cost accountingrecords relating to Sugar Distillery Power and Soya Divisions of the Company for theyear ended 31st March 2020.
The said Firm has been appointed for the financial year ending 31st March 2021 andnecessary resolution for ratification of their remuneration is included in the Notice forthe ensuing Annual general Meeting.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a CSR Committee and has adopted a CSR Policy and the sameis available in the Company's website www.sakthisugars.com. The composition of the CSRCommittee is given in the Corporate governance Report. As the Company has incurred lossfor the three preceding financial years the requirement of incurring expenditure towardsfulfilment of its corporate social responsibility did not arise during the financial yearunder review.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Company has in place an Anti-Sexual harassmentPolicy in line with the requirements of the said Act. An Internal Complaints Committee(ICC) has been set up at every work place of business to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. No sexual harassment complaint has been received during thefinancial year 2019-20.
With reference to the Statutory Auditors remark your Directors wish to state that theCompany is confident of obtaining favourable award. The statement of impact on auditqualification is attached as Annexure - F.
Your Directors wish to place on record their appreciation of the valuable assistanceand co-operation extended by the shareholders cane growers banks financial institutionsand government authorities. They also wish to appreciate the dedicated services renderedby officers staff and workers of the Company.
| ||On behalf of the Board of Directors |
|Coimbatore ||M Manickam |
|31st july 2020 ||Chairman and Managing Director |