BOARD'S REPORT Your Directors have pleasure in presenting the 29th Annual Report on the business and operations of the company and the audited financial statements for the year ended 31st March 2015. DIVIDEND The Board of Directors has not recommended any dividend for the year ended 31st March 2015. FINANCIAL PERFORMANCE Your Company earned an income of Rs. 58,356.91 lakhs in the year 2014-15 as against Rs. 83,598.47 lakhs during the previous year. The Company has incurred a net loss of Rs. 5,275.84 lakhs as against the net loss of Rs. 2,667.60 lakhs incurred during the previous year. OPERATIONAL PERFORMANCE Sugar Division The inadequate rainfall in the command area of the factories and the low sugar prices during the previous season led to reduction in sugarcane crushing in 2014-15. The average recovery of sugar was 9.14% as against 9% in the previous year. The Company produced 1.45 lakh tons of sugar as against 2.22 lakh tons in the previous year. The Company sold 1.49 lakh tons (including exports) as against 2.24 lakh tons in the previous year. Cogeneration Division The operations of cogeneration division across all the Units were satisfactory. During the year under review, the total power generated by all our Units was 1,918 lakh units as against 2,672 lakh units in the previous year on the back of lower cane crushed. The company exported 1,252 lakh units during the year as against 1,643 lakh units in the previous year. The Company has received 73,568 units of carbon credits during the year ended 31st March 2015 which has been accounted during the year under review. Distillery Division The distillery units located at Unit I and III have produced 193.82 lakh litres of Alcohol in 2014-15 as against 271.61 lakh litres of Alcohol in the previous year and sold 193.68 lakh litres of alcohol as against 268.56 lakh litres of alcohol in the previous year. Operations of subsidiary company Trident Sugars Limited Your wholly owned subsidiary Company, Trident Sugars Limited, has crushed 5.04 lakh tons of sugarcane during the financial year 2014-15 as against 3.80 lakh tons in the previous year. The company produced 55,334 tons of sugar and sold 47,973 tons of sugar during the financial year as against 41,243 tons of production and 30,551 tons of sales in the previous year. Accounts of Subsidiary As per sub-section 3 of Section 129 of the Companies Act 2013, the consolidated financial statements are also being given in addition to the standalone financial statements of the Company. The financial statements of the subsidiary will however be made available to those members who request the same. A separate statement containing the salient features of the financial statements of the subsidiary in the prescribed Form AOC-1 is annexed with this report as Annexure 8. FUTURE OUTLOOK Sugarcane crushing for the year 2015-16 is likely to be marginally higher than the crushing for the year 2014-15 on account of increase in planting in our command area. Falling trend of domestic sugar prices and the disconnect between sugarcane and sugar price continue to pose a great challenge to your company's financials and cash flow. Your company earnestly hopes that both Central and State Governments would intervene with measures to remove surplus sugar from the system and support sugar prices to help the industry recover economical viability. Notwithstanding the above, your company is committed to working towards better crop management and improving operational efficiencies. FIXED DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. The earlier deposits (accepted as per the provisions of previous Companies Act 1956) outstanding as on 31st March 2014, amounting to Rs. 142.66 lakhs together with interest has been repaid in full within the stipulated period i.e. before 31st March 2015, as required under Section 74 of the Companies Act, 2013 AUDITORS M/s.Srikishen & Co, Chartered Accountants, the present auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment. They have furnished necessary certificate in terms of second and third proviso to Section 139(1) of the Companies Act 2013 read with Rule (4) of Companies (Audit and Auditors) Rules, 2014. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Annexed herewith as Annexure 1 CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance (Annexure 2) as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. BOARD EVALUATION Pursuant to the provisions of Section 134 (3) (p) of the Companies Act, 2013, the statement containing the manner in which the formal annual evaluation made by the Board of its own performance, the directors individually and its various committees, is furnished hereunder: a) Each Director has been furnished with a grade score sheet of other Directors, in which the Director has to fill the grade score between 1 and 5, 1 being lowest and 5 being highest. b) The average grade score has been arrived thereafter and expressed as a percentage. Range of such percentage was then appropriately summarized as "Below Average, Average, Good, Very Good and Excellent". The Board and its Committees have been evaluated in the same manner. NUMBER OF MEETINGS During the year, five Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS The Independent Directors of the Company have furnished declarations as required under Section 149(6) of the Companies Act 2013,on their appointments as Independent Directors. WHISTLE BLOWER POLICY ('VIGIL MECHANISM') As per Clause 49 (II) (F) of the Listing Agreement, the Board has established a Vigil Mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud and violation of the company's code of conduct or ethics policy. This mechanism also provides for adequate safeguards against victimization of director(s) /employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The copy of Whistle Blower Policy is uploaded in the website of the Company www.rajshreesugars.com PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The Company has not made any loan, given any guarantee or made any investment as per Section 186 of the Companies Act 2013 except investment in a wholly owned subsidiary Company, viz., Trident Sugars Limited. Please refer Notes J & O to financial statements. SEXUAL HARASSMENT There has been no compliant received on Sexual Harassment, during the year under review. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There were no material contracts/arrangements/transactions with related parties during the year. Hence the requirement to furnish Form AOC-2 does not arise. MATERIAL CHANGES & COMMITMENTS BETWEEN END OF FINANCIAL YEAR AND THIS REPORT. There have been no material changes & commitments between end of financial year and this report. MANAGERIAL REMUNERATION AND EMPLOYEE PARTICULARS The details of disclosures relating to Managerial Remuneration as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed (Annexure 7). INDUSTRIAL RELATIONS During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has established adequate internal control systems which is commensurate with its nature and volume of operations. RAJSHREE SUGARS & CHEMICALS LIMITED (RSCL) EMPLOYEES STOCK OPTION PLAN 2012 The details of Stock Options granted during the financial year ended as on 31st March, 2015 and other particulars under the "RSCL Employee Stock Option Plan 2012" form part of this report, as Annexure 3. SECRETARIAL AUDIT The Board has appointed Mr.G.Soundararajan (Membership No.13993 CP No.4993), a Company Secretary in Practice to undertake the Secretarial Audit of the Company as required under Section 204 of the Companies Act 2013. The Secretarial Audit report is annexed herewith as Annexure 4. The report does not contain any qualification, reservation or adverse remarks. EXTRACT OF ANNUAL RETURN The extract of the Annual Return in the prescribed Form MGT 9 is annexed herewith as Annexure 5. NOMINATION & REMUNERATION POLICY The Nomination & Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of the Directors and recommended to the Board a policy for appointment and remuneration for the Directors, Key Managerial Personnel and other employees. The Nomination & Remuneration Policy is furnished as Annexure 6. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 8th September 2014 (date of last Annual General Meeting) on the website of the Company (www.rajshreesugars.com ), as also on the website of Ministry of Corporate Affairs. DIRECTORS' RESPONSIBILITY STATEMENT In terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the directors would like to state that: i) In the preparation of the annual accounts / financial statements, the applicable accounting standards had been followed along with the proper explanation relating to material departures; ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 loss of the Company for the year under review. iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) The directors have prepared the annual accounts / financial statements, on a going concern basis. v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all designated employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behavior of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Company's website www.rajshreesugars.com The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated persons of the Company, as per SEBI (Prohibition of Insider Trading) Regulations, 2015. RISK MANAGEMENT POLICY The Company has formulated a Risk Management Policy as required under clause 49 (VI) of the Listing Agreement. The Company has also formulated a specific policy viz., 'Forex and Interest Rate Risk Management Policy for Currency and Interest Rate Risk Management', which is also in effect. At present the Board has not identified any element of risk which may threaten the existence of the company. However, the details about the risks being faced by the Company is furnished in the 'Management Discussion & Analysis Report' (Annexure 9). SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATOR OR COURTS OR TRIBUNALS IMPACTING GOING CONCERN STATUS AND COMPANIES OPERATIONS IN FUTURE There have been no significant & material orders passed by regulator / courts / tribunals impacting going concern status and companies operations in future. ACKNOWLEDGEMENT Your Directors thank the Banks and Financial Institutions for their valuable and timely financial assistance and support provided by them to the Company. Your Directors also thank the cane growers, suppliers, Government Institutions and others for the cooperation extended to the Company. The Board also places on record its appreciation of the dedicated services rendered by the employees of the Company. May Goddess Lakshmi shower Her blessings for the continued prosperity of the Company. For and on behalf of the Board RAJSHREE PATHY Chairperson and Managing Director Date : 27th May 2015 Place : Coimbatore |