Sakthi Sugars Ltd.
|BSE: 507315||Sector: Agri and agri inputs|
|NSE: SAKHTISUG||ISIN Code: INE623A01011|
|BSE 16:01 | 27 Mar 2018||Sakthi Sugars Ltd|
|NSE 05:30 | 01 Jan 1970||Sakthi Sugars Ltd|
|BSE: 507315||Sector: Agri and agri inputs|
|NSE: SAKHTISUG||ISIN Code: INE623A01011|
|BSE 16:01 | 27 Mar 2018||Sakthi Sugars Ltd|
|NSE 05:30 | 01 Jan 1970||Sakthi Sugars Ltd|
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 2015
REVIEW OF OPERATION
The operations of Sugar and Alcohol Divisions of the Company during the financial yearhave been affected due to non-availability of adequate sugarcane for crushing and lowrealisation on sugar sold and the reduced availability of molasses. However operation ofPower Division has been encouraging due to higher rate of realisation per unit of powerwith the Company coming out of Power Purchase Agreement and engaging in sale of powerthrough bidding process. There has been no change in the nature of business during thefinancial year and until the date of this report.
The quantum of sugarcane crushed at various units of the Company during the year2014-15 is as under:
During the year under review 1.32 lakh MT of sugar was produced by the Company whichis less by 0.15 lakh MT as compared to the previous year. This is on account of reductionin the sugarcane availability. The quantum of sugar sales and the sale value has gone upslightly during the year even though there is a decrease in the average selling price ofsugar per quintal.
During the year under review 161.18 lakh litres of industrial alcohol was produced atSakthinagar Distillery Unit and 84.26 lakh litres at Dhenkanal Distillery Unit.
23056 tonnes of soya bean was crushed in the soya plant during the year under review.This division had exported products worth Rs.2253.13 lakhs to various countries.
The total power generated in the co-generation plants during the year was 3922.77 lakhunits out of which 3179.21 lakh units of power was exported to Tamilnadu ElectricityBoard. As the rate per unit of power under the Power Purchase Agreements (PPA) enteredinto with Tamilnadu Power Generating and Distribution Company Limited (TANGEDCO) was notviable for generation of power using coal the Company has come out of the PPA. TheCompany has entered into another agreement with TANGEDCO for sale of power at a higherrate per unit of power through bidding process. This Agreement will expire on 30thSeptember 2015.
The selling price of sugar has come down far below the cost of production andrealisation on sale of sugar does not even meet the cost of sugarcane crushed. This hasmade the sugar production unviable. With the sugar season 2014-15 expected to end insurplus stock of sugar the possibility of sugar price going up in the near future isdoubtful.
Besides reduced selling price for sugar imposition of VAT at 5% on sugar sales byTamilnadu State Government has placed the sugar mills in Tamilnadu at a disadvantageousposition as they have to face competition due to arrival of more quantity of sugar forsale from other States where there is no VAT on sugar. Similar situation is faced inrespect of sale of industrial alcohol by the manufacturers in Tamilnadu State on accountof local levy of VAT being higher than CST on imports from neighbouring States.
Unless the State and the Central Governments take corrective actions to bail out thebleeding sugar industry the outlook of sugar industry will continue to be bleak.
The Company has not accepted any deposit from public during the financial year underreview.
At the end of the financial year 4 deposits amounting to Rs.0.65 lakh (includinginterest) remained unclaimed. Of this 2 deposits amounting to Rs.0.34 lakh have since beenrepaid.
As the Madras Stock Exchange Limited (MSE) had applied to SEBI for voluntary exit as aStock Exchange the Company made an application to MSE for voluntary delisting from thatStock Exchange which has been approved by that Exchange. The equity shares of the Companyremains delisted from MSE from 15th October 2014. The equity shares of the Companycontinue to be listed on National Stock Exchange of India Limited (NSE) and the BSELimited (BSE).
As per the directions of the Hon'ble High Court of Judicature at Madras meetings ofequity shareholders and holders of FCCB were convened on 22nd July 2015 and 23rd July 2015respectively for obtaining their approval for the scheme of arrangement for settlement ofthe outstanding FCCB (Series B). However at the instance of certain bondholders the HighCourt has postponed the aforesaid Court convened meetings to October 2015 to facilitatemodification of the Scheme.
The Company continues to be under the Corporate Debt Restructuring Scheme with respectto the secured debts availed from Banks/Financial Institutions. The rework package givenby the Company has been approved by the CDR Empowered Group and documentation in respectthereof is yet to be done.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
It is with deep grief and regret your Directors place on record the demise ofDr.N.Mahalingam (DIN : 00206894) one of the Promoters and Founder Chairman of theCompany on 2nd October 2014. The Directors also place on record their appreciation of thecontributions made by Dr.Mahalingam in the development of the Company over a period ofmore than half a century.
Dr.M.Manickam (DIN : 00102233) Executive Vice Chairman has been reappointed for afurther period of five years from 24th October 2014 subject to the approval of theCentral Government. The Government's approval is yet to be received.
At the meeting of the Board of Directors held on 12th November 2014 Dr.M.Manickam hasbeen elected to be the Chairman of the Board and has been re-designated as ExecutiveChairman.
Sri M. Balasubramaniam (DIN : 00377053) has been appointed as Managing Director and SriM. Srinivaasan (DIN : 00102387) has been re-appointed as Joint Managing Director witheffect from 28.6.2013 and 23.1.2014 respectively for a period of 5 years subject to theapproval of the Central Government. The Central Government has approved theappointment/reappointment for 5 years but restricted its approval for payment ofremuneration for the period from the date of appointment/reappointment till 31st March2014 and advised the Company to make fresh applications under the Companies Act 2013 forits approval. Accordingly applications have been made to the Central Government forpayment of remuneration to Sri M. Balasubramaniam and Sri M. Srinivaasan from 1st April2014 and the approvals are awaited.
The Board has re-appointed Sri V.K. Swaminathan (DIN : 00210869) as Executive Directorfor a period of five years from 1st November 2015 subject to the approval of the banksand financial institution members of the Company and of the Central Government as may beapplicable.
The Board of Directors at its meeting held on 30th September 2014 had appointed SriK.V. Ramachandran (DIN : 00322331) Sri S.Chandrasekhar (DIN : 00011901) and Sri S.Balasubramanian (DIN : 00458139) as Additional Directors to hold office upto the date ofthe ensuing Annual General Meeting of the Company. With a view to comply with therequirements of Section 149(1) of the Companies Act these Additional Directors have beenappointed as Independent Directors for a term of five years from 30th September 2014subject to approval of the Members at the ensuing Annual General Meeting.
Mrs.Priya Bhansali (DIN : 00195848) has been appointed by the Board as AdditionalDirector with effect from 27th March 2015 to hold office until the date of the ensuingAnnual General Meeting of the Company.
Tamil Nadu Industrial Development Corporation Limited and IDBI Bank Limited havewithdrawn their respective Nominees Sri B. Elangovan (DIN : 00133452) and Sri T.A. Ganesh(DIN : 01113674) from the Board of Directors of the Company from 16th October 2014 and20th May 2015 respectively. The Directors place on record their appreciation of thecontributions made by the above Nominee Directors to the Company during their tenure ofoffice as Directors. Sri P.S. Ravendernath (DIN : 00030770) has been nominated on theBoard of the Company by Asset Reconstruction Company (India) Limited effective from 2ndJune 2015.
Notices together with requisite deposits have been received from certain Members of theCompany pursuant to Section 160 of the Companies Act 2013 signifying their intension topropose resolutions for appointment of Sri K.V. Ramachandran Sri S. Chandrasekhar Sri S.Balasubramanian and Mrs. Priya Bhansali as Independent Directors of the Company at theensuing Annual General Meeting. The Nomination and Remuneration Committee and the Board ofDirectors have recommended appointment of these Directors as Independent Directors by themembers at the ensuing Annual General Meeting.
Sri V.K. Swaminathan retires by rotation at the ensuing Annual General Meeting and iseligible for re-appointment.
Sri S. Audiseshiah a retired IAS Officer has been appointed as Chief ExecutiveOfficer of the Company during the financial year and he is not a member of the Board.
Pursuant to the requirement of Section 203 of the Companies Act 2013 the followingDirectors/Executives have been designated as whole time Key Managerial Personnel duringthe year:
Dr.M.Manickam Executive Chairman
Sri M.Balasubramaniam Managing Director
Sri M.Srinivaasan Joint Managing Director
Sri S.Audiseshiah Chief Executive Officer
Sri M.K.Vijayaraghavan Chief Financial Officer; and
Sri S.Baskar Sr.Vice President-Finance & Company Secretary
DIRECTORS RESPONSIBILITY STATEMENT
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(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; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(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 6 times during the financial year ended 31st March 2015. The details ofthe Board Meetings and the attendance of the Directors are given in the CorporateGovernance Report.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee was reconstituted by the Board on 30.9.2014. The Audit Committeecomprises the following Directors as its members:
1. Sri C.Rangamani Chairman
2. Sri N.K.Vijayan and
3. Sri K.V.Ramachandran
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 Clause 49 of theListing Agreement the Board has carried out an annual performance evaluation of its ownperformance Committees of Directors and individual directors. The manner of evaluation isgiven in the 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) of the Companies (Appointment and Remuneration) Rules 2014 are given in Annexure-A.The Company does not have any employee attracting the provisions of Rule 5(2) of the saidRules.
RISK MANAGEMENT POLICY
Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee. The details of the Committee are set out in theCorporate Governance Report. The risk management policy aims to identify evaluate andmitigate risks. It seeks to ensure transparency and to minimise adverse impact on thebusiness operations of the Company.
Effective from 1st April 2014 Sakthi Auto Component Limited has become an AssociateCompany with about 26% of its total share capital being held by the Company. Pursuant tothe third proviso to Rule 6 of the Companies (Accounts) Rules 2014 consolidated financialresults of the Company and the Associate Company for the financial year ended 31st March2015 are not made. In view of this report on the performance and financial position ofthe said Associate Company is not provided in terms of Rule 8 of the said Rules.
The Company has internal control system commensurate with the size of the Company.Adequate procedures are set 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.
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 Commitee 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.
Pursuant to Clause 49 of the Listing Agreement a Report on Corporate Governance alongwith Auditors Certificate with respect to its compliance 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 Extract of the Annual Return is given in Annexure-B.
ii) Changes in Share Capital
There has been no change in the share capital during the financial year 2014-15.
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 given in Annexure-C.
iv) Related Party Transactions
All the related party transactions are at arm's length basis and have taken place inthe ordinary course of business. Omnibus approval of the Audit Committee is obtained forthe transactions which are foreseen and repetitive in nature. A statement of all relatedparty transactions is placed before the Audit Committee on quarterly basis.
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 Related Party are provided in the accompanyingfinancial statements.
v) Statement of declarations given by Independent Directors
The Independent Directors have given declarations to the Board to the effect that theymeet with the criteria of independence as provided in Section 149(6) of the Companies Act2013 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 2014-15 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 outgo as required under Section 134(3)(m) of the Companies Act 2013 read withRule 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.
Pursuant to Section 139(1) of the Companies Act 2013 and Rule 6 of the Companies (Auditand Auditors) Rules the members of the Company have appointed M/s.P.N.Raghavendra Rao& Co. Chartered Accountants Coimbatore as Statutory Auditors of the Company for aperiod of three consecutive years commencing from the conclusion of the 52nd AnnualGeneral Meeting of the Company upto the Conclusion of the 55th Annual General Meetingsubject to ratification at the Annual General Meeting (AGM) each year. Necessaryresolution in this regard is included in the Notice for the ensuring AGM.
Pursuant to Section 204 of the Companies Act 2013 the Board of Directors of theCompany has appointed M/s. S.Krishnamurthy & Co. Company Secretaries Chennai asSecretarial Auditors to undertake the secretarial audit of the Company. Secretarial AuditReport of M/s. S.Krishnamurthy & Co. Company Secretaries Chennai is annexed asAnnexure-E.
M/s. STR & Associates Cost & Management Accountants Tiruchirapalli are theCost Auditors for auditing the cost accounting records relating to Sugar IndustrialAlcohol Power and Soya Divisions of the Company for the year ended 31st March 2015. Thesaid Firm has been appointed for the financial year ending 31st March 2016 and necessaryresolution for ratification of their remuneration is included in the Notice for theensuing Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135 of the Companies Act 2013 and Schedule VIIthere to the Company has constituted a CSR Committee and has adopted a CSR Policy. As theCompany has incurred loss for the three preceding financial years the requirement ofincurring expenditure towards fulfilment of its corporate social responsibility did notarise during the financial year under review.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up at every workplace to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy.
No sexual harassment complaint has been received during the financial year 2014-15.
With reference to the Statutory Auditors' remarks your Directors wish to state thatthe unprovided interest and guarantee commission to the holding company will be accountedsubject to the approval of the CDR Empowered Group.
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.
ANNEXURE - A TO THE BOARD'S REPORT
PARTICULARS OF REMUNERATION
The information required under Section 197 of the Companies Act 2013 and the Rules madethereunder in respect of Directors/Key Managerial Personnels/employees of the Company isas follows:-
(a) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
(b) The percentage of increase in remuneration of each Director Chief ExecutiveOfficer Chief Financial Officer and Company Secretary in the financial year:
i. The remuneration to Non-Executive Directors consists of sitting fees paid for atmeetings of Board and Committees thereof attended by each Director. The sitting fees paidper meeting attended by the Directors is the same as that of the last year. In respect ofDirectors appointed during the financial year there is no comparison.
ii. Remuneration of Dr.M.Manickam is for the period upto 24.10.2014. The CentralGovernment's approval is awaited for his re-appointment and payment of remuneration afterthe date.
iii. The remuneration paid to Sri M.Balasubramanian relates to the previous year. Noremuneration was paid to Sri M.Balasubramaniam Managing Director and Sri M.SrinivaasanJoint Managing Director for the financial year 2014-15 as the Central Government'sapproval for payment of remuneration from 1.4.2014 is yet to come.
(c ) The percentage increase in the median remuneration of employees in the financialyear: 9.15%
(d) The number of permanent employees on the rolls of the Company as on 31.3.2015:1459
(e) The explanation on the relationship between average increase in remuneration andcompany performance:
The increase is on account of general revision in the wages of sugar industry workersand appointment of certain senior level executives.
(f) Comparison of remuneration of the Key Managerial Personnel (KMP)against theperformance of the Company:
(Rs. in lakhs)
(g) Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease or decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies as at the close of the current financial year and previous financial year:
(h) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average increase in salaries of employees other than managerial personnel in theyear 2014-15 was 9.13%. There is no increase in the managerial remuneration.
(i) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:
(Rs. in lakhs)
As remuneration paid to the Managing Director relates to previous financial yearcomparison with the performance for the year2014-15 has not been given.
(j) The key parameters for any variable component of remuneration availed by thedirectors:
There is no variable component in the remuneration availed by the Directors during thefinancial year 2014-15. The remuneration package of the Executive Chairman ManagingDirector and the Joint Managing Director includes a variable component by way ofcommission upto 1% of the net profit of the Company within the ceiling limit prescribedunder the Companies Act 2013. However as there is no profit during the year under reviewno variable component has been availed by them.
(k) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:
0.67 : 1.00 (on annualised basis)
(l) Affirmation that the remuneration is as per the remuneration policy of the Company:
It is affirmed that the remuneration paid during the financial year ended 31st March2015 to Directors Key Managerial Personnel and other employees is as per the remunerationpolicy of the Company.
ANNEXURE B TO BOARD'S REPORT
FORM No. MGT-9
EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31st March 2015
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules 2014
I. REGISTRATION AND OTHER DETAILS:
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of thecompany shall be stated
III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES
IV. SHAREHOLDING PATTERN (Equity Share Capital Break up as Percentage of Total Equity)
(i) Catagory-wise Share Holding
(ii) Share Holding of Promoters*
* Includes Promoter Group
(iii) Change in *promoters' Shareholding (Specify if there is no change)
* Includes Promoter Group
(iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters& Holders of GDRs & ADRs)
Date wise increase/decrease in shareholding during the year :
Date wise increase/decrease in shareholding during the year :
Date wise increase/decrease in shareholding during the year :
(v) Shareholding of Directors and Key Managerial Personnel:
Indebtedness of the Company including interest outstanding/accrued but not due forpayment
( Rs. in Lakhs)
VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director Whole time director and/or Manager:
( Amount in Rs.)
Note: 1. Remuneration of Dr.M.Manickam Executive Chairman is for the period upto24.10.2014 in terms of the Central Government approval. Central Government's approval isawaited for appointment and payment of remuneration after that date.
2. Remuneration paid to Mr.M.Balasubramaniam Managing Director relates to theprevious financial year as approval of the Central Government was received during the year2014-15. Approval for payment of remuneration from 1.4.2014 is still awaited.
3. Since Sri M.Srinivaasan Joint Managing Director has drawn the remuneration fromother company in which he is a Managing Director upto the ceiling limit he has not beenpaid remuneration in the Company for the previous year. Approval for payment of hisremuneration from 1.4.2014 is awaited.
4. Sri. V.K. Swaminathan Executive Director has been paid minimum remuneration interms of the provisions of the Act and members approval.
B. Remuneration to other directors:
(Amount in Rs.)
1. Non-executive Directors are paid only sitting fees within the prescribed limit.
Overall Ceiling as per the Act.
2. Limits for Executive Directors are given in VI - A above.
C. Remuneration to key Managerial Personnel other than MD/Manager/WTD
(Amount in Rs.)
VII PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES
ANNEXURE-C TO THE BOARD'S REPORT
POLICY ON APPOINTMENT AND REMUNERATION
In order to identify attract retain and motivate competent persons a clearrelationship of remuneration to performance and a balance between rewarding short and longterm performance of the Company the Board of Directors of the Company as recommended bythe Nomination and Remuneration Committee has adopted a policy on appointment andremuneration as enumerated in Section 178 of the Companies Act 2013. This policy providesa framework for remuneration of members of the Board of Directors Key ManagerialPersonnel and other employees of the Company.
I. Criteria for selection/appointment of and Remuneration to Non-Executive Directors:
i. Criteria of selection
a. The Non-Executive Directors shall be of high integrity with relevant expertise andexperience so as to have a diverse Board with Directors having expertise in the fields ofengineering manufacturing finance accounts taxation agricultural operations andgeneral management.
b. In the case of Independent Directors the candidate in addition to the requirementsunder (a) above should satisfy the criteria of independence as stipulated in theCompanies Act and the Listing Agreement.
c. The NR Committee while recommending a candidate for appointment as a Director shallconsider and get itself satisfied about - the candidate not being disqualified forappointment under Section 164 of the Companies Act 2013.
Attributes/criteria regarding qualification and experience in relevant field.
Personal Professional or business standing
Requirement with respect to Board's diversity
d. In the case of re-appointment the performance evaluation of the Director and hislevel of participation will be considered.
ii. Remuneration to Non-Executive Directors
The Non-Executive Directors are entitled to receive remuneration by way of sitting feesfor each meeting of the Board or Committee of Board attended by them of such sum as may beapproved by the Board of Directors within the overall limits prescribed under theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. They are also entitled for reimbursement of expenses in connectionwith participation in the Board/Committee meetings/ General Meetings.
The Independent Directors of the Company are not entitled for Stock Option Scheme ofthe Company if any.
II. Criteria for selection/appointment of and remuneration to Executive Directors:
i. Criteria of selection/appointment
The NR Committee shall identify persons of integrity having relevant experienceexpertise and leadership quality for appointment for the position of Executive Directorsviz. Executive Chairman Managing Director Joint Managing Director and ExecutiveDirector. The NR Committee shall also ensure that the identified persons also fulfil theconditions like age limit under the Companies Act and other applicable laws if any.
The Executive Directors will be paid such remuneration and perquisites as may bemutually agreed upon at the time of appointment or re-appointment between the Company andthe Executive Directors taking into consideration the profitability of the Company andthe overall limits prescribed under the Companies Act 2013. This remuneration will befurther subject to the approval of the Central Government wherever required.
The remuneration of Executive Chairman Managing Director and the Joint ManagingDirector of the Company consists of fixed remuneration and variable portion by way ofcommission not exceeding 1% of the net profit calculated in accordance with the CompaniesAct 2013. The remuneration of Executive Director consists of only fixed remuneration.
III. Criteria for selection/appointment of and Remuneration to Senior ManagementPersonnel:
Based on the criticality of the role and responsibility of the Key ManagerialPersonnel the NR Committee decides on the required qualifications experience andattributes for the position and on the remuneration based on the industry bench mark andthe current compensation trend in the market. The remuneration consists of fixedcomponents like salaries perquisites and a variable component comprising of annual bonusif declared. Based on the selection criteria laid as above and remuneration the Committeeidentifies persons and recommends to the Board for consideration and appointment.
In respect of other Senior Management Employees and other employees below KMPs theExecutive Chairman/Managing Director is authorised by the Nomination and RemunerationCommittee to fix the remuneration based on the criticality and responsibility of theemployees.
Annual increments are given on time scale basis and further increase to deservingemployees based on performance review.
ANNEXURE - D TO BOARD'S REPORT
INFORMATION PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT 2013
A. CONSERVATION OF ENERGY
(i) Steps taken or impact on conservation of energy:
The number of motors or their horse power rating has been reduced wherever possible.
Use of Planetary gear box and VFD motors.
(ii) Steps taken for utilising alternate sources of energy:
Power generated by the Company in its co-generation plants is used.
(iii) Capital investment on energy conservation equipments:
During the year an amount of Rs. 9.50 lakhs has been spent on equipments towardsoptimising the operational efficiency with lesser consumption of energy.
B. TECHNOLOGY ABSORPTION
(i) Efforts made towards technology absorption:
Adoption of three-tier nursery programme.
Raised bed seedling.
(ii) Benefits derived
Good growth of sugar cane free from disease.
Avoidance of the delay in cultivation on account of delay in preparation of field dueto delay in harvesting or natural calamities.
(iii) In case of imported technology
a. details of technology imported
b. the year of import
c. whether the technology has been fully absorbed
d. if not absorbed areas where absorption has not taken place and reasons thereof
(iv) Expenditure on Research and Development - Rs. 39.61 lakhs
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
ANNEXURE-E TO THE BOARD'S REPORT
Form No. MR-3
Secretarial Audit Report for the financial year ended 31st March 2015
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
To the Members of
Sakthi Sugars Limited [CIN: L15421TZ1961PLC000396]
We have conducted a Secretarial Audit of the compliance of applicable statutoryprovisions and adherence to good corporate practices by M/s. Sakthi Sugars Limited(hereinafter called "the Company") during the financial year ended 31st March2015 (hereinafter referred to as "the year") in a manner that provided us areasonable basis for evaluating the Company's corporate conducts/statutory compliances andexpressing our opinion thereon.
We are issuing this report based on our verification of the books papers minute booksand other records maintained by the Company forms/ returns filed compliance relatedaction taken by the Company during the year as well as after 31st March 2015 but beforethe issue of this report and the information provided by the Company its officers agentsand authorised representatives during our conduct of the secretarial audit.
We hereby report that:
1. In our opinion during the audit period covering the financial year ended on 31stMarch 2015 the Company has complied with the statutory provisions listed hereunder andalso has proper Board processes and compliance mechanism in place to the extent in themanner and subject to the reporting made hereinafter. The members are requested to readthis report along with our letter of even date annexed to this report as Annexure - A.
2. We have examined the books papers minute books and other records maintained by theCompany and the forms/ returns filed during the year according to the applicableprovisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder.
(ii) The Companies Act 1956.
(iii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder.
(iv) The Depositories Act 1996 and the regulations and bye-laws framed thereunder.
(v) Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment and External Commercial Borrowings.
(vi) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
(c) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act 2013 and dealing withclients;
(d) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and
(e) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009.
(vii)The Listing Agreements entered into by the Company with:
(a) National Stock Exchange of India Limited;
(b) BSE Limited; and
(c) Madras Stock Exchange Limited (upto 14th October 2014).
(viii)The following laws to the extent specifically applicable to the Company:
(a) Essential Commodities Act 1955 and rules/ orders made thereunder
(b) Sugar Development Fund Act 1982 and rules made thereunder
(c) The Sugar Cess Act 1982
(d) Tamil Nadu Distillery Rules 1981
(e) The Tamil Nadu Molasses Control and Regulation Rules 1958
(f) Food Safety and Standards Act 2006 and rules/ regulations made thereunder
(g) The Electricity Act 2003 and the rules made thereunder
3. We are informed that during the year:
(i) There was no other law specifically applicable to the Company compliance with whichwe are required to report on; and
(ii) The Company was not required to comply with the following laws and consequentlynot required to maintain any books papers minute books or other records or file anyforms/ returns under:
(a) Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Overseas Direct Investment.
(b) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
(c) The Securities and Exchange Board of India (Issue and Listing of Debts Securities)Regulations 2008; and
(d) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998.
4. We have not examined compliance with the Secretarial Standards 1 and 2 issued by TheInstitute of Company Secretaries of India as they became applicable only from 1st July2015.
5. During the period under review and also considering the compliance related actiontaken by the Company after 31st March 2015 but before the issue of this report theCompany has to the best of our knowledge and belief and based on the information andexplanations provided to us complied with the provisions of the Acts Rules Regulationsand Agreements mentioned under paragraph 2 above to the extent applicable with regard tomaintenance of books papers minute books or other records or filing of forms/ returns.
We further report that:
1. The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-executive Directors and Independent Directors. A woman directorhas also been appointed on the Board effective 27th March 2015. The changes in thecomposition of the Board of Directors that took place during the year were carried out incompliance with the provisions of the Act.
2. During the year:
(i) Adequate notice was given to all directors to schedule the Board Meetings.
(ii) Notice of Board meetings were sent at least seven days in advance.
(iii) Agenda and detailed notes on agenda for Board meetings were sent less than sevendays before the meeting as there was no statutory requirement during the year to send thesame seven days in advance of the meeting.
3. A system exists for directors to seek and obtain further information andclarifications on the agenda items before the meetings and for their meaningfulparticipation at the meetings. Majority decision is carried through. We are informed thatno director has expressed any dissenting views on any of the matters considered by theBoard during the year that were required to be captured and recorded as part of theminutes.
4. The Company has adequate systems and processes commensurate with its size andoperations to monitor and ensure compliance with applicable laws rules regulations andguidelines.
5. During the year under review:
(i) Members have by passing special resolutions at the fifty-second annual generalmeeting held on 30th September 2014 accorded their approval :
(a) under section 180(1)(c) of the Act to borrow upto Rs.1500 crores (apart fromtemporary loans obtained/ to be obtained from the Company's bankers in the ordinary courseof business) over and above of the aggregate of the Company's paid-up capital and freereserves; and
(b) under section 180(1)(a) of the Act to create charge/ mortgage/ hypothecation infavour of lenders/ security trustees on Company's movable and immovable assets present/future assets to secure Company's borrowings and performance of obligations.
(ii) The Company has voluntarily delisted its equity shares from Madras Stock ExchangeLimited with effect from 15th October 2014.
ANNEXURE - A TO SECRETARIAL AUDIT REPORT OF EVEN DATE
To the Members of
Sakthi Sugars Limited [CIN: L15421TZ1961PLC000396]
Sakthi Nagar Erode 638315
Our Secretarial Audit Report (Form MR-3) of even date for the financial year ended 31stMarch 2015 is to be read along with this letter.
1. Maintenance of secretarial records and compliance with the provisions of corporateand other applicable laws rules regulations standards is the responsibility of themanagement of the Company. Our responsibility is to express an opinion on the secretarialrecords produced for audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records.
3. While forming an opinion on compliance and issuing this report we have also takeninto consideration the compliance related action taken by the Company after 31st March2015 but before the issue of this report.
4. We have considered compliance related actions taken by the Company based onindependent legal/ professional opinion obtained as being in compliance with law whereverthere was scope for multiple interpretations especially since the financial year ended31st March 2015 was the first full financial year in which the Companies Act 2013 becameoperational and also on account of the listing agreement with the stock exchangesundergoing major amendments from 1st October 2014.
5. We have verified the records on a test basis to see whether the correct facts arereflected in the secretarial records. We also examined the compliance procedures followedby the Company on a test basis. We believe that the processes and practices we followedprovide a reasonable basis for our opinion.
6. We have verified the payment of fees to statutory/ regulatory authorities. Howeverwe have not verified the correctness and appropriateness of financial records and books ofaccounts of the Company.
7. We have obtained the Management's representation about compliance of laws rules andregulations and happening of events wherever required.
8. Our Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.