The Directors present herein the Twenty-Eighth Annual Report on the
operations of your Company and the Audited Statement of accounts for
the year ended 31st March 2015.
FINANCIAL SUMMARY Rs. In Crores
Particulars Year Year
Total Revenue 381.25 525.97
Profit before Interest,
Depreciation and Tax 7.15 51.20
Interest and Finance Charges 66.50 65.47
Depreciation 21.20 28.69
Profit/(Loss) before Tax (80.55) (42.96)
Deferred Tax-Asset/(Liability) 6.39 9.17
Profit/(Loss) After Tax (74.16) (33.79)
Dividend proposed - -
Dividend Tax - -
Transfer to General Reserve - -
Profits Brought forward from last year 26.02 59.81
Profit/(Loss) carried forward to Balance Sheet (48.14) 26.02
The total income for the year was Rs. 381.25 crores as against
Rs.525.97 crores in the previous year. The reduction in the income as
compared to the previous year was mainly on account of reduced free
sugar sales. The Gross Operating Profit has come down to Rs. 7.15
crores from Rs.51.20 crores in the previous year. The reduction in the
Gross Operating Profit was mainly on account of increase in the cane
cost by Rs.190 per MT and reduction in the average sugar selling price
and reduction in the Inventory valuation. Consequently the operation
has resulted in to a Cash loss of Rs 59.35 crores as against the profit
of Rs 14.27 crores in the previous year. The loss after Depreciation &
Interest was Rs.80.55 crores as against the loss of Rs.42.96 crores in
the previous year. The Net loss after taking credit for deferred tax
asset amount of Rs.6.39 crores works out Rs.74.16 crores as against the
Loss of Rs.33.79 crores in the previous year.
Sugar: During the year under review, the Company has crushed 10.58 lakh
tonnes of cane as against 16.14 lakh tonnes of cane in the previous
year. The decrease in cane crushing is mainly due to decreased
availability of cane at our cane command area on account of drought.
The total sugar production was 9.67 Lakh Qtls as against 14.00 lakh
Qtls in the previous year. The total sugar sale was 9.59 lakh qtls as
against 14.00 Lakh qtls in the previous year. The reduction in the
sales was mainly on account of the reduced free sugar sales consequent
to imposition of VAT in Tamil Nadu . The Average realization for the
year 2014-15 was lower at Rs.2914/Qtl as against Rs.2970/Qtls in the
Power: During this period, the total power generation was 946.92 lakh
units as against 1345.90 lakh units in the previous year. The export to
the TNEB grid was 604.38 lakh units as against 828.54 lakh units in the
previous year . The reduction in the power generation and export was
due to lower volume of cane crushing at 10.58 Lakh tonnes as against
16.14 lakh tonnes crushed in the previous year. The average realization
per unit is Rs.3.95 /unit as against Rs.3.89/unit in the previous year.
On account of this, total value of the power exported to the grid has
decreased to Rs.23.85 crores from Rs 32.19 crores in the previous year.
Industrial Alcohol: The production of industrial Alcohol was 129.15
lakh liters as against 218.87 lakh liters in the previous year. The
Company was able to sell the entire production of Alcohol and the sale
was 139.87 lakh liters as against 210.86 lakh liters in the previous
year. Consequent to this, The Alcohol sales value has decreased to
Rs.59.22 crores from Rs.75.75 crores in the previous year. The average
realization was Rs. 42.03 liters as against Rs.35.45 /liters in the
Due to absence of profits in the current year, the Board of Directors
is unable to recommend any dividend for the year 2014-15.
During the year, your Company has not transferred any amount to General
Reserves account due to loss for the year 2014-15.
There is no change in the Share Capital of the Company either in the
Authorised Capital or in the Issued Capital. The paid up equity
capital as on March 31, 2015 was Rs.29,38,98,460. The Company has not
issued any shares during the period
EXTRACT OF ANNUAL RETURN
Extract of the Annual Return in form MGT-9 is attached herewith.
(Annexure - I)
During the year 2014-15 five Board Meetings were held on 29.05.2014,
13.08.2014, 12.11.2014, 19.01.2015 and 11.02.2015.
LOANS, GUARANTEES OR INVESTMENTS
Your Company has not given any loans or provided any guarantees or
acquired securities exceeding 60% of its paid up Share Capital, free
reserves and security premium account covered under the provisions of
Section 186 of the Companies Act, 2013.
CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION
All transactions entered into by the Company with Related Parties were
in the Ordinary Course of Business and at arm''s Length pricing basis.
The Audit Committee granted omnibus approval for the transactions
(which are repetitive in nature) and the same was reviewed by the Audit
Committee and the Board of Directors. There were no materially
significant transactions with Related Parties during the financial year
2014-15 which were in conflict with the interest of the Company.
Suitable disclosures as required under AS-18 have been made in Note
25.4.11 of the Notes to the financial statements. Details of the
transaction are provided in Form AOC-2 which is attached as Annexure-II
to this Report.
The observations made in the Auditors'' Report read together with
relevant notes thereon are self-explanatory and hence, do not call for
any further comments under Section 134 of the Companies Act, 2013.
There are no qualifications, reservations, or adverse remarks.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial
position of the Company, which have occurred between the end of the
financial year and the date of the report
FOREIGN EXCHANGE EARNINGS AND OUT-GO, CONSERVATION OF ENERGY &
The details of conservation of energy, technology absorption, foreign
exchange earnings and outgo are given in the Annexure - III
The Company does not have any subsidiary or any associate Company.
Hence no report on subsidiary, associate, joint venture Company is
RISK MANAGEMENT POLICY
The Company has developed a risk management policy. Pursuant to
Section 134 (3) (n) of the Companies Act, 2013 details of the Policy
are disclosed in the Company''s Website.
At present the Company has not identified any element of risk which may
threaten the existence of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Mr A Sennimalai, (DIN 00062791) retires by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
Dr Palani G Periasamy, (DIN 00081002) was re- appointed as Whole time
Director for a further term of 5 years from 25.06.2014 and approval of
the Shareholders obtained in the last Annual General Meeting held on
25th September 2014.
Mrs Visalakshi Periasamy, (DIN 00064517) was appointed as additional
director with effect from 14.11.2014 and is being proposed for
appointment as Regular Director.
Mr P Selvam IAS Retd ( DIN 01351493) and Dr S Muthu (DIN 03331664 were
appointed as additional Independent Directors on 12.11.2014 and are
being proposed for appointment as Regular Independent Directors.
Mr M P Kaliannan, President (Corporate Finance) was appointed as the
Chief Financial Officer with effect from 01.09.2014.
B. The Independent Directors have given their declarations as per
Section 149 (6) that they meet the criteria of Independence. The 3
Independent Directors viz, Dr K N Sivasubramanian, Mr T Pitchandi and
Mr P S Gopalakrishnan who were appointed as Independent Directors in
the Annual General Meeting held on 25th September 2014 will hold office
for 5 years from 25.09.2014 to 24.09.2019.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant and material orders passed by the Regulators
or Courts or Tribunals impacting the going concern status and Company''s
operations in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The scope and authority of the
Internal Audit function is defined by this Audit Committee. To maintain
its objectivity and independence, the Internal Auditor reports to the
Chairman of the Audit Committee of the Board & to the Chairman &
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company. Based on the report of internal audit function, process
owners undertake corrective action in their respective areas and
thereby strengthen the controls. Significant audit observations, if
any, and recommendations along with corrective actions thereon are
presented to the Audit Committee of the Board.
During the year 2014-15 no amount was collected as deposits as defined
in Section 73 and 74 of chapter V of the new Companies Act 2013. Your
Company has complied with the provisions of Section 58 (A) and 58 (AA)
of the Companies Act, 1956 and the rules prescribed there under. Your
Company has no unpaid deposits which were due or repayable as on 31st
March 2015. Your Company has not defaulted in repayment of the deposits
on the due dates. As on the date of this report, there are no unclaimed
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is
applicable to the Members of the Board and all employees in the course
of day to day business operations of the Company.
The Code has been posted on the Company''s website www.dharanisugars.in
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
All the Board Members and the Senior Management personnel have
confirmed compliance with the Code. All Management Staff were given
appropriate training in this regard.
PROHIBITION OF INSIDER TRADING
The Company has adopted a Code of disclosures & a Code of Conduct for
Prohibition of Insider Trading with a view to regulate trading in
securities by the Directors and designated employees of the Company.
The Code requires pre-clearance for dealing in the Company''s shares and
prohibits the purchase or sale of Company shares by the Directors and
the designated employees while in possession of unpublished price
sensitive information in relation to the Company and during the period
when the Trading Window is closed. The Board is responsible for
implementation of the Code.
All Board Directors and the designated employees have confirmed
compliance with the Code.
Pursuant to provisions of section 204 of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 the Company had appointed Mr M Damodaran and Associates
Company Secretaries in practice to undertake the Secretarial Audit of
the Company. Their Audit report is annexed herewith as Annexure as on
31st March 2015. There were no qualifications or observations requiring
Board comments. (Annexure IV)
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Your Company falls within the parameters as per section 135 of the
Companies Act. A Corporate Social Responsibility (CSR) Committee has
been formed. However, as the average of the net profits for the last 3
years is negative, no expenditure has been earmarked on this account.
CSR policy has been framed and is available on the Website. Members of
the Committee are:
(1) Mr. P S. Gopalakrishnan (2) Mr. A. Sennimalai (3) Mr. M. Ramalingam
Pursuant to the provisions of the Companies Act, 2013, the Board has
carried out an evaluation of its own performance, the directors
individually as well as the evaluation of the working of its Audit,
Nomination & Remuneration Committees as also the Independent Directors.
The manner in which the evaluation has been carried out is attached
The Remuneration policy of the Company comprising the appointment and
remuneration of the Directors, Key Managerial Personnel and Senior
Executives of the Company including criteria for determining
qualifications, positive attributes, independence of a Director and
other related matters has been provided in the Corporate Governance
Report which is attached as Annexure-VI to this Report.
VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7
of the Companies (Meetings of Board and its Powers) Rules, 2014 and
Clause 49 of the Listing Agreement, the Board of Directors had approved
the Policy on Vigil Mechanism/ Whistle Blower and the same is hosted on
the website of the Company. This Policy inter-alia provides a direct
access to the Chairman of the Audit Committee. (Annexure - VII)
Your Company hereby affirms that no Director/ employee have been denied
access to the Chairman of the Audit Committee and that no complaints
were received during the year.
A report on Corporate Governance and a management discussion and
analysis report, in line with SEBI prescribed format incorporated in
the Listing Agreement, are attached herewith. A certificate from the
Statutory Auditors on compliance of conditions of Corporate Governance
has been obtained and copy enclosed to this report.
A Details of the ratio of the remuneration of each director to the
median employee''s remuneration and other details as required pursuant
to Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014. (Applicable to listed Company)
Annexure in the Board'' Report (Annexure VIII)
Details of the every employee of the Company B as required pursuant to
5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014
There are no employees falling within the requirements of Section 197
read with rule 5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
C Any director who is in receipt of any commission
from the company and who is a Managing Director or Whole-time Director
of the Company shall receive any remuneration or commission from any
Holding Company or Subsidiary Company of such Company subject to its
disclosure by the Company in the Board''s Report.
D The following disclosures shall be mentioned in the Board of
Director''s report under the heading Corporate Governance, if any,
attached to the financial statements as per Schedule V, Part II ,
Section II of the Companies Act, 2013.
(I) all elements of remuneration package such as salary, benefits,
bonuses, stock options, pension, etc., of all the directors;
Dr Palani G Periasamy Mr M Ramalingam,
Executive Chairman Managing Director
(Rs. Lakhs) * (Rs. Lakhs) *
Salary Rs.21.60 Salary Rs.48.00
(ii) details of fixed component and performance linked incentives along
with the performance criteria;
3% Commission on Net Nil
(iii) service contracts, notice period, severance fees;
5 years, 5 years,
3 months, 3 months,
(iv) stock option details, if any, and whether the same has been issued
at a discount as well as the period over which accrued and over which
* However, as the profits of the Company for the year are inadequate
minimum remuneration has been proposed to be paid to the Managerial
Personnel with the approval of the Shareholders in accordance with
Schedule V Part II Section II of the Companies Act, 2013.
PREVENTION OF SEXUAL HARASSMENT
The Company has in place an Anti Sexual harassment policy in line with
the requirements of the Section 4 of the Sexual harassment of Women at
Work Place (Prevention, Prohibition & Redressal) Act, 2013. Internal
Complaints Committee (ICC) has been set up to redress complaints
received about sexual harassment. All employees are covered under this
policy. Details have been displayed prominently in the work place and
also in the Company''s Website.
The following is a summary of such complaints received & disposed
during the year 2014-15. No. of Complaints received - Nil, No of
complaints disposed off - Nil.
M/s Srinvasan & Shankar, Chartered Accountants, Chennai (FRN 005093S)
retire as Statutory Auditors on the conclusion of this Annual General
Meeting. They can be continued for a further period of 2 years, though
they have completed the two terms of 5 years each on 31.03.2014. They
have conveyed their consent for re- appointment and have also furnished
the required declaration as required in Section 139 of the Act.
Accordingly, they are being proposed for re-appointment for a period of
2 years from 01.04.2015 to 31.03.2017, subject to approval in the
Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Annexure attached in the Board''s Report
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed.
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 profit or
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 on a going concern
v) The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
vi) The directors had devised proper system to ensure compliance with
the provisions of all applicable laws and that such system were
adequate and operating effectively.
The Board of Directors places on record its appreciation of the
support, assistance and co-operation received from the Central
Government, Government of Tamil Nadu, various governmental agencies,
ICICI Bank Limited, IREDA, the Company''s bankers, Indian Bank, State
Bank of India, The South Indian Bank Limited, Bank of India, Central
Bank of India, The Federal Bank Limited, Union Bank of India, IDBI Bank
Ltd and Indian Overseas Bank.
The Board of Directors also wishes to place on record its appreciation
for the cane growers, without whose help and support it could not have
achieved the progress that has been made so far. With our encouragement
and their initiative, we hope for improved cane availability for the
Your Directors are thankful to the employees of the Company for their
wholehearted co-operation and unstinted dedication to duty leading to
cordial industrial relations during the year under review.
The Board is thankful and grateful for the continuing co- operation to
the management from the shareholders family since inception and is
confident that this partnership will sustain forever.
for and on behalf of the Board of Directors
DR PALANI G PERIASAMY
Dated: 27th May 2015