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Dharani Sugars and Chemicals Directors Report, Dharani Sugars Reports by Directors
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Dharani Sugars and Chemicals

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Directors Report Year End : Mar '15    « Mar 14
Dear Members,
 
 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 
                                                 Ended       Ended
                                                 31.03.2015  31.03.2014
 
 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
 
 PERFORMANCE
 
 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
 previous year.
 
 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
 previous year.
 
 DIVIDEND
 
 Due to absence of profits in the current year, the Board of Directors
 is unable to recommend any dividend for the year 2014-15.
 
 RESERVES
 
 During the year, your Company has not transferred any amount to General
 Reserves account due to loss for the year 2014-15.
 
 SHARE CAPITAL
 
 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)
 
 BOARD MEETING
 
 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
 188(1)
 
 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.
 
 AUDITOR''S 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 &
 TECHNOLOGY ABSORPTION
 
 The details of conservation of energy, technology absorption, foreign
 exchange earnings and outgo are given in the Annexure - III
 
 SUBSIDIARY COMPANIES
 
 The Company does not have any subsidiary or any associate Company.
 Hence no report on subsidiary, associate, joint venture Company is
 included.
 
 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
 reappointment.
 
 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 &
 Managing Director.
 
 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.
 
 FIXED DEPOSITS
 
 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
 deposits.
 
 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
 stakeholders.
 
 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.
 
 SECRETARIAL AUDIT
 
 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
 
 BOARD EVALUATION
 
 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
 (Annexure -V)
 
 REMUNERATION POLICY
 
 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.
 
 CORPORATE GOVERNANCE
 
 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.
 
 MANAGERIAL REMUNERATION
 
 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.
 
 NIL
 
 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
                                 Perquisites
 
                                 HRA                 Rs.2.40
 
                                 LTA                 Rs.1.80
 
                                 Medical             Rs.1.80
 
 (ii) details of fixed component and performance linked incentives along
 with the performance criteria;
 
 3% Commission on Net            Nil
 Profits
 
 (iii) service contracts, notice period, severance fees;
 
 5 years,          5 years,
 
 3 months,         3 months,
 
 Nil               Nil
 
 (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
 exercisable.
 
 Nil Nil
 
 * 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.
 
 STATUTORY AUDITORS
 
 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
 state that:
 
 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
 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 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.
 
 ACKNOWLEDGEMENTS
 
 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
 ensuing years.
 
 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
 
                                                               Chairman 
 
 Place: Chennai 
 
 Dated: 27th May 2015
Source : Dion Global Solutions Limited
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