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 2019.
|FINANCIAL HIGHLIGHTS || ||(Rs in lakhs) |
|Particulars ||2018-19 ||2017-18 |
|Revenue || || |
|Sugar Division ||27020.40 ||34246.59 |
|Distillery Division ||8522.92 ||4936.91 |
|Cogeneration Division ||1189.69 ||1015.50 |
|Soya Division ||13772.92 ||12821.06 |
|Total Revenue ||50505.93 ||53020.06 |
|Other Income ||15207.84 ||1139.64 |
|Total Income ||65713.77 ||54159.70 |
|Profit / (Loss) before Finance Cost and Depreciation & Amortisation and Exceptional Item ||9628.97 ||(2694.44) |
|Finance Cost ||25966.57 ||14994.92 |
|Provision for Depreciation ||5158.53 ||5281.69 |
|Net Profit before Exceptional Item and Tax ||(21496.13) ||(22971.05) |
|Exceptional Items gain / (Loss) ||(5180.09) ||(2249.33) |
|Net Profit before Tax ||(26676.22) ||(25220.38) |
|Provision for Tax ||(5274.80) ||(7510.12) |
|Net Profit after Tax ||(21401.42) ||(17710.26) |
|Comprehensive Income - Net of Tax ||76.35 ||13.62 |
|Total comprehensive Income ||(21325.07) ||(17696.64) |
REVIEW OF OPERATION
The rainfall during the last south-west and north-east monsoons was better than theprevious years but was not enough to meet the water requirements for cultivation ofsugarcane in all areas. The quantum of sugarcane crushed during the financial year washigher than the previous year. However the increase was not sufficient to improve thelevel of operation to a significant level. There was improvement in the production ofindustrial alcohol. There has been decrease in the selling price of sugar and industrialalcohol resulting in reduction in the average realisation. Generation of power showed aslight improvement with marginal increase in the per unit price for power. The operationalperformance of Soya unit is satisfactory. There is no change in the nature of businessduring the financial year and until the date of this report.
The quantum of sugarcane crushed at various units of the Company during the year2018-19 is as under:
|Name of the unit ||Cane crushed (in MT) |
|Sakthinagar : ||425205 |
|Sivaganga : ||115930 |
|Dhenkanal : ||308368 |
During the year under review 0.81 lakh MT of sugar was produced by the Company ascompared to 0.85 lakh MT (including 0.35 lakh MT out of raw sugar) in the previous year.The quantum of sugar sales and the sale value have come down as compared to the previousyear.
During the year under review 81.68 lakh litres (previous year 63.23 lakh litres) ofindustrial alcohol was produced at Sakthinagar Distillery unit and 70.94 lakh litres(previous year 47.31 lakh litres) at Dhenkanal Distillery unit.
25027 tonnes (previous year 25004 tonnes) of soya bean was crushed in the Soya Plantduring the year under review. This Division had exported products worth Rs.1549.58 lakhs(previous year Rs.1530.58 lakhs) to various countries.
The total power generated in the co-generation plants during the year was 659.03 lakhunits (Previous year 638.41 lakh units) out of which 343.94 lakh units (Previous year379.83 lakh units) of power was exported. The Company is selling the power through IndianEnergy Exchange (IEX).
The beginning of the current south-west monsoon has not been encouraging andavailability of sugarcane for the next season will depend upon the performance of themonsoons. The improvement in the financial performance depends upon the availability ofsugarcane for crushing and prevalence of economical market prices for sugar and otherproducts.
The Company has not accepted any deposit during the financial year under review. At theend of the financial year there was no unclaimed deposit.
In view of issue and allotment of further shares by Sakthi Auto Component Limited(SACL) on 17th October 2018 the Company's shareholding in the share capital of SACL hascome down to 19.81% from 22.67%. As such SACL has ceased to be an Associate Company withinthe meaning of Section 2(6) of the Companies Act 2013 with effect from the aforesaid date.
The Board has decided not to operate its Modakurichi plant during the financial year2019-20 due to inadequate availability of sugarcane for crushing. This will not have anyadverse impact as the entire cane available in the command area of Modakurichi unit willbe crushed in Sakthinagar Sugar unit.
As informed in the last Report the Company has made applications to Term Lenders forrestructure elongation of the repayment period etc. While Edelweiss has restructured itsloans to the Company the request of the Company with other lenders are underconsideration.
Dr.M.Manickam (DIN 00102233) retires by rotation at the ensuing Annual General Meetingand being eligible has offered for reappointment.
As per Regulation 17(1A) of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 Non-Executive Directors who have attained the age of 75 years as at 1stApril 2019 should not be appointed or continue their appointment unless approved by themembers of the Company by special resolution. Sri C.Rangamani and Sri S.S.Muthuvelappanare aged 77 years and their continuation till expiry of the current term of appointmenti.e. upto 29th September 2019 has been approved by members by special resolutions at theAnnual general Meeting held on 28th September 2018.
The five year term of office as Independent Directors of Sri C.Rangamani SriS.S.Muthuvelappan Sri PK.Chandran Sri N.K.vijayan Sri K.v.Ramachandran SriS.Chandrasekhar and Sri S.Balasubhramanian will expire on 29th September 2019. NoticesProposing the above Independent Directors for re-appointment have been received fromcertain members of the company under Section 160 of the Compaines Act 2013. TheseIndependent Directors have given their consent for reappointment for the second term offive consecutive years. They have declared that they fulfil the criteria of independenceas stipulated in the Companies Act 2013 and in the SEBI (LODR) Regulations 2015 and thatthey are not disqualified for appointment as Directors under the said statutes. Based onthe evaluation of the performance and considering the contributions made during theirtenure of office as Independent Directors and taking into account their skill sets and onthe recommendation of the Nomination and Remuneration Committee the Board of Directorshave recommended for approval of the members of the Company of re-appointment of Sri C.Rangamani Sri S.S.Muthuvelappan Sri PK.Chandran Sri N.K.vijayan Sri K.v.RamachandranSri S.Chandrasekhar and Sri S.Balasubhramanian as Independent Directors for the secondterm of five consecutive years from 30th September 2019 to 29th September 2024 at theensuing Annual 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 at the end of the financial year and ofthe 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 seven times during the financial year ended 31st March 2019. 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.
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 Report also 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's length basis. Prior approval of theAudit Committee and/or Board as the case may be has been obtained for the transactionswith related parties. A statement of all related party transactions is placed before theAudit Committee on quarterly basis. There has been no contract or arrangement with relatedparties attracting the provisions of Section 188(1) of the Companies Act 2013 during thefinancial 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 of declarations given by Independent Directors
The Independent Directors have given their declarations to the Board to the effect thatthey meet with the criteria of independence as provided in Section 149(6) of the CompaniesAct 2013 and the relevant rules.
vi. Significant material orders passed by court or authorities
There are no significant orders passed by Court or regulatory authorities which wouldimpact the status of the Company and its future operations.
vii. Particulars of loans guarantees or investments
The Company has not given any loan or guarantee or has acquired any security during thefinancial year 2018-19 under Section 186 of the Companies Act 2013.
viii. Energy Conservation Technology Absorption and Foreign Exchange Earnings andOutgo
The information on conservation of energy technology absorption and foreign exchangeearnings and out go as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-D.
ix. There are no material changes affecting the financial position of the Company whichhas occurred between the end of the financial year and the date of this report.
x. The Company has complied with the Secretarial Standards as may be applicable to theCompany.
M/s. PK. Nagarajan & Co. Chartered Accountants (Firm Registration Number 016676S)have been appointed by the members as Statutory Auditors of the Company for a period offive consecutive years from the conclusion of the 55th Annual general Meeting held on 27thSeptember 2017 till the conclusion of the 60th Annual general Meeting. They haveconfirmed that they are not disqualified for continuing as Statutory Auditors of theCompany. Their Audit Report for the financial year ended 31st March 2019 does not containany qualification reservation or adverse remark.
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 2019. Secretarial AuditReport of M/s. S.Krishnamurthy & Co.
Company Secretaries Chennai for the year ended 31st March 2019 is annexed asAnnexure-E. As the Company does not have any subsidiary the question of appointment ofSecretarial 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 Industrial Alcohol Power and Soya Divisions of the Company forthe year ended 31st March 2019.
The said Firm has been appointed for the financial year ending 31st March 2020 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 2018-19.
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 |
|13th August 2019 ||Chairman and Managing Director |