Report of the Board of Directors Dear Members Your Directors have pleasure in presenting the 31st Annual Report of the company together with audited financial statements for the year ended 31st March 2015 Dividend Your Directors are glad to recommend dividend @ Rs 2.50/- per equity share of Rs.10/- each (25 % on equity capital) Drought prevailing in the cane area has affected the cane availability and recovery The expansion of crushing capacity from 2500 TCD to 3600 TCD in the sugar factory at Kunthur Village Karnataka has been completed and the factory commenced its operation with the expanded capacity from 27.8.2014 Review of Operations Sugar Division Drought prevailing in the cane area has affected the cane availability and recovery The expansion of crushing capacity from 2500 TCD to 3600 TCD in the sugar factory at Kunthur Village Karnataka has been completed and the factory commenced its operation with the expanded capacity from 27.8.2014 Co-generation of Power The Co-generation plants have generated 304.18 million units of power and exported 205.46 million units of power to grids compared to the generation of 326.44 million units and export of 224.56 million units in the previous year The 20 MW co-generation plant in the sugar factory at Kunthur Village Karnataka was synchronized with the grid on 27.8.2014 Distillery Division During the year the distilleries have produced 29.26 million B Ltrs of Alcohol as against 27.30 million B Ltrs in the previous year Granite Division The Granite Processing Unit has produced 170381 square metres of Granite Slabs and 28420 square metres of Tiles compared to production of 183974 square metres of Granite Slabs and 25160 square metres of Tiles in the previous year Wind Mill Wind Mills have generated 11.67 million units of power and exported 10.07 million units of power to grid compared to the generation of 12.10 million units and export of 10.48 million units in the previous year Prospects for the current year 2015 - 2016 It is estimated to crush 30 lakh tonnes of sugarcane in aggregate Performance of co-generation plant will be based on bagasse availability in the sugar mills It is estimated to produce 30 million B Ltrs of alcohol in the Distillery Units Improved working results are expected in Granite Division With the continued surplus in both domestic and international sugar markets sugar prices are expected to remain under pressure Directors and Key Managerial Personnel In accordance with the provisions of Companies Act 2013 Sri S V Balasubramaniam is liable to retire by rotation and is eligible for re-appointment The Board of Directors at its meeting held on 29.5.2015 has re-appointed Sri S V Balasubramaniam as the Chairman of the company with substantial powers of management and Sri B Saravanan as the Managing Director for a period five years with effect from 2.6.2015 on the recommendation of Nomination and Remuneration Committee Dr Radha Ramani has been appointed as an Additional Director (Independent) on 11.2.2015 She holds office up to the date of ensuing Annual General Meeting The company has received notice from a member along with requisite deposit under Section 160 of the Companies Act 2013 proposing Dr Radha Ramani for the office of Independent Director All the Independent Directors have given declarations that they meet the criteria of independence as specified under Section 149 (6) of the Companies Act 2013 and Clause 49 of the Listing Agreement The Company has devised a policy on Directors' appointment and remuneration and for performance evaluation of Independent Directors Board Committees and other Individual Directors which include performance evaluation of Non-Executive and Executive Directors The details of programmes for familiarization of Independent Directors with the company their roles rights responsibilities in the company nature of the industry in which the company operates business models and related matters are placed in the website of the company at the link <http://www.bannari.com/InvestorInformation.html> At the Board Meeting held on 11.2.2015 Sri S V Balasubramaniam Chairman Sri B Saravanan Managing Director Sri C Palaniswamy Company Secretary and Sri M Ramprabhu Chief Financial Officer were designated as "Key Managerial Personnel" of the Company pursuant to Section 203 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 The Directors have confirmed that they are not disqualified from being appointed as Directors of the company Particulars of Loans Guarantees or Investments During the year the company has not made any loan or guarantee or investment or provided any security under Section 186 of the Companies Act 2013 Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo The particulars relating to conservation of energy technology absorption foreign exchange earnings and outgo as required to be disclosed under the Companies Act 2013 are provided in Annexure I to this Report Particulars of Employees The information required as per Section 197 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnished in Annexure II to this Report Meetings of the Board Five Meetings of the Board of Directors were held during the year The details are furnished in the Report on Corporate Governance attached herewith Committees and Policies In terms of the provisions of the Companies Act 2013 and the Listing Agreement the company has constituted Board Committees and framed required polices The details are furnished in the Corporate Governance Report attached herewith Corporate Governance and Management Discussion and Analysis Report A separate section on Corporate Governance Management Discussion and Analysis Report and the certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement form part of this Report and annexed as Annexure III Corporate Social Responsibility (CSR) Pursuant to Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014 the company has formulated a policy on Corporate Social Responsibility and the policy was uploaded in the company's website at <http://www.bannari.com/InvestorInformation.html> The report on CSR activities is attached as Annexure IV to this report Risk Management / Risk Management Policy The company has formulated a Risk Management Policy including risk assessment and minimization procedures The Risk Management Committee has been assigned with the functions of monitoring and reviewing the risk management plans of the company In the opinion of the Board no element of risk that may threaten the existence of the company has been identified Vigil Mechanism / Whistle Blower Policy The company has established a whistle blower policy/vigil mechanism for Directors and Employees to report concerns about unethical behavior actual or suspected incidents of fraud or violation of the code of conduct or ethics policy This mechanism provides adequate safeguards against victimization of directors/employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee The whistle blower policy is posted in the company's website at the link <http://www.bannari.com/InvestorInformation.html> Related Party Transactions All the related party transactions are entered on arm's length basis and are in compliance with the applicable provisions of the Companies Act 2013 and the Listing Agreement All the related party transactions are placed before the Audit Committee and approved by the Audit Committee Since there are no transactions which are not on arm's length basis and material in nature the requirement of disclosure of such related party transactions in Form AOC-2 does not arise The Related Party Transactions Policy as approved by the Board is uploaded in the company's website at <http://www.bannari.com/InvestorInformation.html> Board Evaluation Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the Listing Agreement Independent Directors at their meeting without participation of non-independent directors and management considered and evaluated the performance of Board performance of the Chairman and the Managing Director The Board has carried out an annual evaluation of its own performance and of the individual directors as well as the Committees of Directors Material changes and commitments During the period from the end of financial year and till the date of this report there is no material changes and commitments affecting the financial position of the company There is no change in the nature of business of the company Directors' Responsibility Statement As stipulated in Section 134(3) (c) read with Section 134 (5) of the Companies Act 2013 your Directors confirm that a) in the preparation of the annual accounts all the applicable accounting standards had been followed along with proper explanation relating to material departures b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year under review c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities d) they had prepared the annual accounts on a going concern basis e) they had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively Extract of Annual Return An extract of Annual Return in Form No MGT-9 is annexed as Annexure V Auditors / Auditors' Report At the last Annual General Meeting M/s P N Raghavendra Rao & Co was appointed as Statutory Auditors of the company for a period of 3 years and they shall hold office until the conclusion of 33rd Annual General Meeting of the company Their appointment is subject to ratification by members at every Annual General Meeting Accordingly necessary resolution ratifying their appointment is placed for the approval of members The Auditors' Report does not contain any qualification reservation or adverse remark Secretarial Auditors and Secretarial Audit Report M/s C Thirumurthy & Associates Company Secretaries Coimbatore were appointed as Secretarial Auditors to conduct secretarial audit for the financial year 2014-2015 The Report of Secretarial Auditors is annexed to this report as Annexure VI The Report does not contain any qualification reservation or adverse remark Internal Control Systems and their Adequacy Details of internal control system and their adequacy are provided in the Management Discussion Analysis Report attached herewith Cost Audit Sri M Nagarajan Cost Accountant Coimbatore was appointed as Cost Auditor to conduct audit of cost accounting records for the financial year 2014-15 Industrial Relations The relationship with employees continued to remain cordial throughout the year under review General Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review i. Details relating to deposits covered under Chapter V of the Act ii. Issue of equity shares with differential rights as to dividend voting or otherwise iii. Issue of shares (including sweat equity shares) to employees of the company under any scheme Your Directors state that no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and company's operations in future Your Directors further state that during the year under review no case was filed pursuant to Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 Acknowledgement Your Directors acknowledge with gratitude the timely assistance and help extended by the Government of India Governments of Tamilnadu and Karnataka Banks Karnataka Power Transmission Corporation Limited and Tamilnadu Electricity Board Your Directors thank the cane growers who have supplied sugarcane to the factories and wish to place on record their appreciation of the contributions made by all the employees By Order of the Board S V BALASUBRAMANIAM Chairman Coimbatore 27.7.2015 |