BOARD REPORT TO THE MEMBERS, Your Directors have pleasure in submitting their 23rd Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015. 2. DIVIDEND No Dividend was declared for the current financial year due to loss incurred by the Company. 3. TRANSFER OF UNCLAIMED DIVIDENDTO INVESTOR EDUCTION AND PROTECTION FUND Since there was no unpaid/unclaimed Dividend declared and paid, the provisions of Section 125 of the Companies Act, 2013 do not apply. 4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS Your Directors wish to present the details of Business operations done during the year under review: a. Production and Profitability The sugar production of the country during 2014-15 has gone to 250.46 lakhs tones as compared to 245.50 lakhs tones of the year 2013-14. The Company has crushed 1,63,15,665 qtls. of sugarcane and 6,17,995 qtls. of sugar beets and has produced 14,38,199 qtls. of sugar during the year under review. The Company has also produced 8,47,310 qtls. of molasses and 18,89,78,646 units of electricity 1,96,17,316 BL of spirit and 16,76,862 cases of liquor. b. Sales The turnover of the Company has gone to Rs.70,631.08 Lacs as against Rs.64,777.75 Lacs in the last year. c. Marketing and Market environment Sugar industries is a seasonal industry. The production of sugar depends upon availability of sugarcane which is affected by weather of the particular place. The quality of soil deteriorates due to overuse of fertilizers and pesticides to increase sugarcane yield. The sugar sector in India goes through a phase of cyclicality, mainly on account of situations of high cane pricing which is under Govt. control. d. Future Prospects including constraints affecting due to Government policies The sugar industry is facing a huge financial crisis. The sugar prices are falling continuously every month. Due to low realization from sugar, the mills are unable to recover the cost of production and generate enough cash flows. Due to the mills' inability to generate cash flow on account of low realization from sugar, the cane arrears have also risen to record levels in the current sugar season. The sugar prices are falling mainly due to excess supply in the local market. The current sugar season 2014-15, is the fifth year in a row of surplus sugar production. The crisis has been accentuated by surplus sugar production globally, putting a downward pressure on sugar prices. 5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OFTHE REPORT No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report. 6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure-A and is attached to this report. 7. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. 8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 The Company has not given any loan or investments made under Section 186 of the Companies Act, 2013 during the year. However, the Company has given guarantee to the Banks for crop loans to the cane growers of the area of Rs.5858.34 lacs against Rs. 5553.06 lacs of the last year. 9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review. 10. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS. There was no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective reports. 11. CORPORATE GOVERANCE As required under Listing Agreement with Stock Exchanges, a report on the Corporate Governance alongwith Auditors' Certificate on compliance of conditions of Corporate Governance are enclosed as Annexure 'B' & 'C' and report of Management Discussion and Analysis is attached as annexure 'D' and the reports form the part of the Directors' Report. 12. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OFTHEIR DUTIES The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Report on Corporate Governance. 13. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure 'E' and is attached to this Report 14. NUMBER OF BOARD MEETINGS CONDUCTED DURING THEYEAR UNDER REVIEW The Company had 10 Board meetings during the financial year under review. 15. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:- (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors 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 and loss of the company for that period; (c) the directors had 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; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 16. SUBSIDIARIES, JOINTVENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company as per the provisions of the Companies Act, 2013. 17. DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review. 18. DIRECTORS Mrs. Rajbans Kaur & Mr. Jasbir Singh Tikka who were appointed as Additional Directors on 27.03.2015 and hold the said office till the date of the Annual General Meeting. Notices have been received from members proposing their candidature for their reappointment. Rana Karan Pratap Singh and Shri Balour Singh retire at this Annual General Meeting and being eligible offer themselves for re-appointment. 19. DECLARATION OF INDEPENDENT DIRECTORS The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. 20. STATUTORY AUDITORS M/s. Kansal Singla & Associates, Chartered Accountants, Chandigarh were appointed as Statutory Auditors from the conclusion of the last Annual General Meeting to this Annual General Meeting of the Company. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. 21. SECRETARIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s. A. Arora & Co., a firm of Company Secretaries (C.P.No.993) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report in prescribed format MR-3 given by aforesaid Secretarial Auditors is annexed to this Board Report as Annexure 'F' and forms an integral part. The Secretarial Auditor has neither qualified the Secretarial Audit Report nor given any adverse remark for which explanation may be required to be given in the Director's Report. However, all the forms/ documents as observed by Secretarial Auditor have been filed with Registrar of Companies. 22. RISK MANAGEMENT POLICY Risks are an integral part of any business and the risk profile, to a great extent, depends on the climatic conditions, economic and business conditions and the markets and customers we serve. The Company has adopted a 'Risk Management Policy' which is reviewed on a periodic basis in order to recognize and reduce exposure to risks wherever possible. The Company's risk management policies are based on the philosophy of achieving substantial growth while mitigating and managing risks involved. Few of the risks associated with our businesses are enumerated below: • Fluctuations in demand and price for finished products viz. sugar. • Fluctuations in the price and availability of key raw materials, including sugarcane, raw sugar and sugar beet. • Increase in interest rates. • Changes in government policies affecting the sugar industry in I ndia. • Accidents, natural disasters or outbreaks of disease in sugarcane. 23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM The Audit Committee consists of the following members - a. Shri Asdev Singh Sodhi b. Shri Shiv Avtar Singh Bajwa c. Shri Baljit Singh The above composition of the Audit Committee consists of all independent Directors. The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. 24. SHARES a. BUY BACK OF SECURITIES The Company has not bought back any of its securities during the year under review. b. SWEAT EQUITY The Company has not issued any Sweat Equity Shares during the year under review. c. BONUS SHARES No Bonus Shares were issued during the year under review. d. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. 25. ACKNOWLEDGEMENTS Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company's activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Rana Inder Pratap Singh Managing Director Rana Karan Pratap Singh Director Date : 13th August, 2015 Place : Chandigarh |