The Board of Directors presents their Twenty-Second Annual Report and audited financialstatements for the financial year ended 31st March 2018.
STANDALONE FINANCIAL RESULTS
The highlights of the standalone financial results are as under:
(Rs in Million)
|Particulars || |
|FY 2017 |
|Revenues ||59031 ||79158 |
|Profit /(loss) before financial expenses depreciation and exceptional items ||(1431) ||3334 |
|Financial expenses ||4986 ||3921 |
|Depreciation ||2322 ||2532 |
|Profit /(loss) before provision for tax and exceptional items ||(8739) ||(3119) |
|Exceptional Items ||27359 ||- |
|Provision for taxation: || || |
|- Current ||- ||- |
|- Deferred Tax ||(6277) ||(761) |
|Net Profit/(Loss) ||(29821) ||(2358) |
|Total comprehensive income/(loss) ||(30440) ||(2363) |
|Retained Earnings and Items of OCI brought forward from the previous year ||6417 ||8905 |
|Changes in Retained Earnings ||(29149) ||(1761) |
|Changes in Items of Other Comprehensive Income (OCI) ||(1291) ||(727) |
|Transfer to Debenture Redemption Reserves ||- ||(125) |
|Closing Retained Earnings and Items of OCI ||(24023) ||(6417) |
The Company achieved a turnover of Rs 59031 million for the year ended 31st March 2018as against Rs 79158 million for the previous year. The EBITDA for the year under reviewstood at Rs (1431) million as compared to Rs 3334 million for the previous year while theNet Loss stood at Rs 29821 million as compared to Net Loss of Rs 2358 million for theprevious year. Analysis of operating performance is covered under Management Discussionand Analysis which forms part of this Report.
DIVIDEND & DIVIDEND DISTRIBUTION POLICY
As the Company has incurred losses during the year under review your Directors havenot recommended any dividend for the financial year ended 31st March 2018. The DividendDistribution Policy of the Company may be accessed on the Company's website atwww.renukasugars.com
TRANSFER TO RESERVES
Debenture Redemption Reserve is created to the extent of 25% of the non-convertibledebentures (NCDs) equally over the period till maturity of the NCDs as per therequirements of the applicable laws. During the current year the Company has not createdDebenture Redemption Reserve on outstanding amount of NCDs.
Your Company has not accepted any deposits from public/ shareholders in accordance withSections 73 and 74 of the Companies Act 2013.
During the year under review your Company has allotted 5521 0.01% Non-ConvertibleDebentures (NCDs) of Rs 10 lacs each aggregating to Rs 5521 million to the lenderspursuant to debt restructuring exercise undertaken by the Company by converting the partof the loans facilities availed by the Company from the lenders. The details of Debenturesoutstanding as on 31st March 2018 are given in the financial statements.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis (MDA) report on the business and operations ofthe Company is given in a separate section and forms part of this Annual Report.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements)
Regulations 2015 (the Listing Regulations) Consolidated Financial Statements of theCompany have been prepared for the year under review. The audited Consolidated FinancialStatements along with the auditors' report thereon forms part of this Annual report.
A summary of the financial performance of each of the subsidiary associate and jointventure companies in the prescribed Form AOC-1 is provided in the financial statements.
The Company's Policy for Determining Material Subsidiaries may be accessed on theCompany's website at www.renukasugars.com
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and accounts of each of the subsidiaries of the Company are available on thewebsite of the Company at www.renukasugars.com These documents will be made available tothe Members for inspection at the Registered Office of the Company on all working daysexcept Saturdays Sundays and public holidays between 9.00 a.m. and 6.00 p.m. upto thedate of the ensuing Annual General Meeting. The Company will make available the documentsof the subsidiaries upon request by any member of the Company interested in obtaining thesame.
During the year under review as a part of debt restructuring exercise your Companyallotted on preferential basis 481843884 0.01% Compulsorily Convertible PreferenceShares (CCPS) at Rs 16.28 each aggregating to Rs 7844.42 million to Wilmar Sugar HoldingsPte. Ltd. one of the promoter of the Company and also allotted 489728828 equity sharesat Rs 16.28 each aggregating to Rs 7972.79 million 42808858 0.01% OptionallyConvertible Preference Shares at Rs 100 each aggregating to Rs 4280.89 million and74388207 0.01% Redeemable Preference Shares at Rs 100 each aggregating to Rs 7438.82million to the lenders by converting the part of the loans facilities availed by theCompany from the lenders. Subsequently Wilmar Sugar Holdings Pte. Ltd. exercised theconversion option and converted 481843884 CCPS into equal number of equity shares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 (the Act)Mr. Stephen Ho Kiam Kong (DIN: 07584449) Director of the Company is proposed to retireby rotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. The Board recommends his re-appointment
Pursuant to the recommendation of the Nomination & Remuneration/CompensationCommittee the Board of Directors have approved appointment of Mr. Madhu Rao (DIN:02683483) as an Independent Director for a period of 5 years with effect from 27th June2018. Mr. Atul Chaturvedi Non-Executive Director has assumed charge as ExecutiveChairman (KMP) with effect from 2nd July 2018.
Brief resumes and other particulars of Mr. Madhu Rao and Mr. Stephen Ho Kiam Kong asstipulated under Regulation 36(3) of the Listing Regulations/Secretarial Standard-2 onGeneral Meetings are given in the Notice of Annual General Meeting which forms part ofthis Annual Report. The Board recommends the appointment of the aforesaid Directors formembers' approval.
The Company has received the declarations from the Independent Directors confirmingthat they satisfy the criteria of independence as prescribed under Section 149(6) of theAct and under the provisions of Listing Regulations.
Mrs. Vidya Murkumbi (DIN: 00007588) stepped-down as Executive Chairperson and Directorof the Company effective from end of day on 30th June 2018 upon completion of open offerby Wilmar Sugar Holdings Pte. Ltd.
Mr. Narendra Murkumbi (DIN: 00009164) stepped-down from the position of Vice Chairman& Managing Director of the Company effective from end of day on 30th June 2018 uponcompletion of open offer by Wilmar Sugar Holdings Pte. Ltd. However Mr. Murkumbi wouldcontinue as Non-Executive Director of the Company effective from 1st July 2018.
Mr. Hrishikesh Parandekar (DIN: 01224244) resigned as Independent Director with effectfrom end of day on 30th June 2018.
Mr. Sanjay Asher (DIN: 00008221) resigned as Independent Director with effect from endof day on 2nd July 2018.
The Board places on record its appreciation towards valuable contribution made byoutgoing directors during their tenure as a Director of the Company.
The policy of the Company on directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under Section 178(3) of the Act and Listing Regulations adopted by theBoard is appended as Annexure 1 to the Board's Report. We a_irm that the remuneration paidto the directors is as per the terms laid out in the Nomination and Remuneration Policy ofthe Company.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors has undertaken anevaluation of its own performance the performance of its Committees and of all theindividual Directors based on various parameters relating to roles responsibilities andobligations of the Board effectiveness of its functioning contribution of Directors atmeetings and the functioning of its Committees.
As on date of this report Mr. Atul Chaturvedi Executive Chairman Mr. Vijendra SinghWhole-time Director Mr. Sunil Ranka Chief Financial Officer and Mr. Rupesh Saraiya arethe Key Managerial Personnel of the Company.
MEETINGS OF THE BOARD
During the year thirteen meetings of the Board of Directors were held the details ofwhich are given in the report on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with no material departures;
(b) that the Directors have 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 a_airs of the Company as at 31st March 2018 andof the loss of the Company for the year ended on that date;
(c) that the Directors have taken proper and su_icient 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;
(d) that the Directors have prepared the annual accounts on a going concern'basis;
(e) that 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
(f) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
AUDITORS AND AUDITORS' REPORT
M/s. S R B C & CO LLP Chartered Accountants (Firm Registration No.324982E/E300003) were appointed as Statutory Auditors of the Company at the 21st AGM heldon 21st December 2017 for a term of 5 consecutive years to hold Office from theconclusion of the 21st AGM till the conclusion of 26th AGM. In accordance with the Section40 of the Companies (Amendment) Act 2017 the appointment of Statutory Auditors is notrequired to be ratified at every AGM. Thus M/s. S R B C & CO LLP will continue tohold Office till the conclusion of 26th AGM.
The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any adverse qualification reservation adverse remark or disclaimer.
During the year the Statutory Auditors had not reported any matter under Section143(12) of the Act therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
Pursuant to the provisions of section 204 of the Companies Act 2013 the Board hadappointed M/s. Sanjay Dholakia & Associates Practicing Company Secretary (MembershipNo. F2655/CP No. 1798) to conduct the Secretarial Audit for the financial year 2017-18.The Secretarial Audit Report for the financial year ended 31st March 2018 is annexedherewith at Annexure 2 to this Report. The said report mentions that the Board ofDirectors of the company has approved the un_audited quarterly results for the quarterended 31st December 2017 on 12th March 2018 and the Company has paid therequisite fees to BSE Limited and National Stock Exchange of India Limited for the same.The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer.
The Board of Directors on the recommendation of the Audit Committee have appointedM/s. B. M. Sharma & Co Cost Accountants as the Cost Auditor to audit the costrecords for the financial year ending 31st March 2019. Remuneration payable to the CostAuditor is subject to ratification by the members of the Company. Accordingly aresolution seeking members' ratification for the remuneration payable to M/s. B. M.Sharma & Co Cost Accountants is included in the Notice convening the Annual GeneralMeeting along with relevant details including the proposed remuneration.
CONSERVATION OF ENERGY
TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as per the Companies Act 2013 and the rules framed thereunder relating toconservation of energy technology absorption foreign exchange earnings and outgo formspart of this Report and is annexed hereto at Annexure 3.
In compliance with the Regulation 34 read with Schedule V of the Listing Regulations adetailed report on Corporate Governance forms part of this Annual Report. A Certificatefrom the Practicing Company Secretary confirming compliance of the conditions of CorporateGovernance as stipulated under the Listing Regulations is appended to the CorporateGovernance Report.
As required under Regulation 17(8) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the CEO/CFO Certificate is attached with this AnnualReport.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of Companies Act 2013 and Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are appended as Annexure 4 to thisReport.
EMPLOYEE STOCK OPTION SCHEME
The Nomination & Remuneration/Compensation Committee of the Board of Directors ofthe Company inter alia administers and monitors the SRSL Employees Stock OptionPlan-2011 ("Scheme") of the Company in accordance with applicable SEBIregulations. The disclosure relating to the Scheme and other relevant details areavailable on the Company's website at www.renukasugars.com
During the year under review the Company has not granted any fresh Stock Options tothe employees.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All Contracts/arrangements entered by the Company during the financial year withrelated parties were in the ordinary course of business and on an arm's length basis.Therefore the disclosure in AOC-2 is not applicable for the financial year 2017-18. Thedetails of transactions with related parties are given in notes to the financialstatements. Details showing the disclosure of transactions with related parties asrequired under Ind AS-24 are set out in the financial statements.
The Company's Policy on Related Party Transactions may be accessed on the Company'swebsite at www.renukasugars.com
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Particulars of loans guarantees given securities provided and investments made areprovided in the notes to the financial statements.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to Corporate Social Responsibility (CSR) by catering to theneeds of the weaker sections of the society. Pursuant to the provisions of the Section 135of the Companies Act 2013 (the Act) your Company has constituted a CSR Committee of theBoard of Directors to monitor the CSR activities of the Company. The details relating tothe CSR Committee are described in the Corporate Governance Report forming part of thisAnnual Report. The CSR Policy of the Company may be accessed on the Company's website atwww.renukasugars.com
The report on the CSR activities is provided at Annexure 5 to the Board's Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return (MGT-9) of the Company is annexed herewith as Annexure 6 tothis Report.
RISK MANAGEMENT & INTERNAL FINANCIAL CONTROLS
The Company has adopted a Risk Management Policy which is reviewed on a periodic basisin order to recognize assess and reduce exposure to risks wherever possible. TheCompany's Risk Management Policy is based on the philosophy of achieving substantialgrowth while mitigating and managing risks involved.
The Company's internal control systems with reference to the financial statements areadequate and commensurate with the nature of its business and the size and complexity ofits operations. Periodic audits and checks are conducted and the controls to preventdetect and correct any irregularities in the operations have been laid down by theCompany.
WHISTLE BLOWER POLICY
Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and the Companies Act 2013 the Company has in place a Whistleblower Policy/VigilMechanism to deal with unethical behavior victimisation fraud and other grievances orconcerns of directors and employees. The Whistleblower Policy can be accessed on theCompany's website at www.renukasugars.com
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013
("the Act") and Rules made thereunder your Company has constituted InternalComplaints Committees.
During the year there were no complaints received by the Company under the Act.
HUMAN RESOURCES _HR_
The Company's HR policies and procedures are designed to recruit and retain the besttalent to support the operations of your Company and to align the interest of employeeswith the long term organisational goals.
MATERIAL CHANGES & EVENTS AFTER BALANCE SHEET DATE
During FY 18 the Company implemented a Resolution
Plan which contemplated Additional investment of
Rs 784.92 crores by Wilmar Sugar Holdings Pte. Ltd.
(WSH); upfront repayment and settlement of Rs 730.13 crores of the outstanding debt;waiver of Rs 657.99 crores of the debt; restructuring of the sustainable debt of SRSLthrough changes in the repayment terms by way of a rupee loan facility and a workingcapital facility; and conversion by certain lenders of part of the unsustainable debt intoequity shares optionally convertible preference shares redeemable preference shares andnon-convertible debentures.
Further in connection with the Debt Restructuring Package WSH Wilmar InternationalLimited the Company and the Murkumbi Group have executed the Joint Venture TerminationAgreement on 9th March 2018 pursuant to which the earlier Joint Venture Agreemententered into among them governing their mutual rights and obligations as shareholdersincluding but not limited to management rights reserved matters and transferrestrictions has been terminated.
The Company's Brazilian subsidiary Shree Renuka Do
Brasil Participacoes Ltda (SRDBPL) together with all of its subsidiaries (collectivelyRenuka Brazil') had on 28th September 2015 filed for protection under JudicialRecovery Law (Law 11.101/2005-Recuperao Judicial) in the designated court in thecapital of the state of So Paulo.
On 6th July 2018 a recovery plan of Renuka Vale do Ivai was approved by Creditors inthe Creditors General Assembly and Court approval is awaited.
In Renuka do Brasil the recovery plan was approved by creditors on 22nd May 2017 andjudge also approved the plan on 6th June 2017. However the plan was not implemented asthe Superior Court of Sao Paulo granted injunction to Banco Nacional do Desenvolvimento(BNDES Bank) to suspend the Amended RJ Plan and its effects.
Presently new recovery plan is under discussion with Creditors and it will bepresented for approval on 29th August 2018.
_ OTHER DISCLOSURES/REPORTING
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
Issue of equity shares with differential rights as to dividend voting or otherwise.
Issue of shares (including sweat equity shares) to employees of the Company under anyscheme.
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
APPRECIATION & ACKNOWLEDGEMENTS
The Board wishes to place on record its gratitude for the assistance and co-operationreceived from the financial institutions banks government authorities customersvendors and cane growers and finally to all its members for the trust and confidencereposed on the Company. The Board further wishes to record its sincere appreciation forthe significant contributions made by employees at all levels for their competencededication and contribution towards the operations of the Company.
|For and on behalf of the Board |
|Atul Chaturvedi |
|8th August 2018 Mumbai |