The Directors have pleasure in presenting their report together with
the audited financial statements for the financial year ended March
The financial summary, results of operations and state of affairs of
the Company for the year are summarised below :
Rs. in Crore
Gross Revenue 2265.04 1945.48 14064.19 12223.07
Profit Before Interest 389.18 262.37 1119.12 1006.95
Finance Charges 151.27 196.16 419.74 465.34
Depreciation 101.93 973 244.10 226.14
Net Profit Before Tax 135.98 (31.10) 455.28 315.47
Provision for Tax (12.27) (57.63) 178.93 96.86
Net Profit After Tax 148.25 26.53 276.35 218.61
Minority Interest - - 159.56 140.64
Net Profit After Tax 148.25 26.53 116.79 77.97
Balance of profit 244.56 244.56 (57.96) (147.79)
Depreciation impact (3.10) - (10.75) -
Balance available 389.71 271.09 48.08 (69.82)
Dividend and Reserves
During the year, the Company paid an interim dividend of Rs. 2 (200%)
per equity share of Rs. 1 each in March, 2015. The Board has
recommended a final dividend of Rs. 1 (100%) per share, which is
subject to the approval of Members at the ensuing Annual General
The company has transferred Rs. 15 Crore to the General Reserve for the
year ended March 31,2015.
The Paid up Equity Share Capital of the Company as on March 31, 2015
was Rs. 17.58 Crore. During the year under review, the Company has
alloted 28,888 equity shares to employees under the ESOP Scheme and has
not granted any stock options.
Consolidated Revenue of your Company for the year was Rs. 14064.19
Crore, 15.06% higher than Rs. 12223.07 Crore in the previous
year. Overall expenses for the year was Rs. 13608.91 Crore, against Rs.
11907.60 Crore in the previous year. Operating Profit (EBITDA) was Rs.
1119.12 Crore, against Rs. 1006.95 Crore in the previous year. Profit
after Tax and minority interest for the year at Rs. 116.79 Crore, was
higher by 49.78% over Rs. 77.97 Crore, in the previous year.
Standalone Revenue of your Company for the year was Rs. 2,265.04 Crore,
16.43% higher than Rs. 1,945.48 Crore in the previous year. Overall
expenses for the year was Rs. 2129.06 Crore, against Rs. 1976.58 Crore
in the previous year. Operating Profit (EBITDA) was Rs. 389.18 Crore,
against Rs. 262.37 Crore in the previous year. Profit after Tax
(excluding exceptional item) for the year at Rs. 148.25 Crore which is
6.55% of revenue as against Rs. 26.53 Crore, which was 1.36% of the
revenue for the previous year.
During the year the company posted an improved performance in the face
of a volatile and uncertain environment. This was a challenging year
for the company*s sugar business in view of the abysmally low price of
sugar which made a free fall during the second half of the financial
year under review. During the year the company achieved a Profit After
tax (PAT) of Rs. 148.25 Crore compared to Rs. 26.53 Crore in the
corresponding previous year. The higher profit was mainly on account of
better realisation from sales of sugar during the first half of the
financial year buoyed by the corporate strategy of cost reduction and
improving all around efficiency in operations. The performance of the
Bio division and Cogen operations was better than the last year. The
higher dividend income from the Subsidiary Company and disposal of
unproductive assets also contributed to the performance of the Company
during the year. The performance of the Company was significant
particularly in the light of the negative sentiments prevailing in the
Country*s sugar industry caused by falling sugar prices and the
uncertainity surrounding sugar cane prices.
The sugar price which showed an improvement during the first half of
the Financial year slided during the latter part leading to an all time
low sugar selling price caused by fifth straight year of surplus
production. India*s output of Sugar production for the 2014-15
Sugar season is pegged at around 28 million tonnes which left
production ahead of consumption for a fifth successive season - a feat
India has not achieved since the 1970s. For the 2014-15 sugar season,
the Central Government fixed the Fair and Remunerative Price (FRP) for
Sugar Cane @ Rs. 2200/- per Tonne for a basic recovery rate of 9.5%
with a premium of Rs. 2.34 for every 0.1% increase in the recovery rate
which is 4.76% higher than the FRP of last sugar season. The steep rise
in sugar cane price year after year which accounts for about 70 percent
of total operation costs coupled with tumbling sugar prices has
impacted the profitability of sugar mills this year. The continuous
loss of several years have already made cane dues across the country to
hit a record high until the end of the Financial year. Though the
Government contemplated a series of measures to check the falling
prices of sugar in the domestic market so that mills earn more revenue
to clear the mounting sugar cane arrears due to farmers, the increase
in market prices of sugar has been minimal. The decontrol of sugar
distribution and the impetus given to blending ethanol with petrol have
not given the desired relief to the sugar mills as the primary issue of
sugarcane pricing still remains largely unresolved. Grappling with the
issue of FRP payment to farmers, the Indian Sugar Mills Association
(ISMA) estimates that around a quarter of mills across the country
could go into negative net worth and may not be able to crush cane next
season. Though the linking of sugar cane prices to the prices of
end-products has long been advocated for long-term financial health and
sustenance of the industry, the same is yet to be implemented by the
State Governments effectively.
During the year, the units of the Company in Tamil Nadu were impacted
by a fourth consecutive year of drought severely affecting the cane
availability. The State Government also continued the Recommended Cane
Price as per the last crushing season. In Karnataka, though there was a
delay in commencement of the normal crushing operations due to the
impasse caused for the payment of final cane price for sugar season
13-14, the availability of sugar cane was higher resulting in succor to
the Company*s operations in the face of acute shortage of cane in
Tamilnadu. The Sugarcane Control Board constituted by the Government of
Karnataka under the Karnataka Sugarcane (Regulation of Purchase and
Supply) Act, 2013 has not yet determined any price for the sugar season
2014-15 and the Company has paid the FRP as determined under the
Sugarcane (Control) Order, 1966.
The major areas of focus for the Company are to work towards improving
the yield, increasing the cane cultivation in command area and further
improving the operating efficiency. The Company is also focusing on
value added sugar products to cater to various segments of the markets,
which are expected to have better margins in addition to improving the
quality of the products and greater thrust on institutional sales. The
Bio- Pesticides and Nutraceuticals divisions of the Company have
several plans to augment capacity, enter into new areas of business and
launch several products which is expected to add to the performance of
PERFORMANCE OF BUSINESS SEGMENTS
During the year, the Company crushed 49.62 Lakh MT of sugar cane as
against 47.52 Lakh MT crushed in the previous year. The units in
Tamilnadu & Puducherry have crushed a total quantity of 27.97 Lakh MT
as against 30.73 Lakh MT in the previous year. This drop was mainly on
account of poor weather conditions in key cultivating areas. The
Karnataka and Andhra Pradesh units crushed 21.65 Lakh MT of sugar cane
as against 16.79 Lakh MT of sugar cane in the previous year. The
average recovery of sugar from sugar cane was at 10.10% as against
9.84% in the previous year.
The company sold 485988 MT of Sugar as against 416983 MT during the
The power generation during the year was higher due to generation of
power from Coal in TN units and higher Cane Crush in KN & AP units. The
power generated was continued to be used captively to run the plants,
the surplus power was sold to State run Electricity Boards and other
merchant power purchasers. Power generation was at 4667 Lakh Units as
compared to 4259 Lakh Units in the previous year. The company exported
2891 Lakh Units of power during the year as against 2496 Lakh Units in
the previous year.
During the year, Industrial Alcohol/ENA production was 643.12 Lakh
Litres as compared to 596.39 Lakh Litres during the previous year.
The Bio-Pesticides Division registered a turnover of Rs. 9,357 Lakh in
2014 -15 as compared to Rs. 9,716 Lakh of previous year and accounting
for 4.42% of the Company*s revenue. The sale of Aza Products registered
a marginal growth of 3% over 2013-14. Export sale of Neemazal Technical
registered a de-growth of 5% over 2013-14 primarily due to depreciation
of Euro Currency rates to Rs. 73.89 (avg) in 2014-15 as against Rs.
83.49 in 2013-14. USA accounted for 61% of Export sales, while Europe
and Asia accounted for 35% and 5% respectively. Domestic sales
registered a marginal de-growth of 2% over 2013-14 primarily in non Aza
products segment. Aza products grew by 29%. In spite of marginal drop
in revenue, PBIT for the year was higher at Rs. 2,652 Lakh against Rs.
2,276 Lakh in 2013-14 mainly due to foreign exchange gain of Rs. 360
Lakh out of forward cover. Production of Technical Aza was 6,908 Kgs.
The Nutraceuticals Division*s turnover was Rs. 7433 Lakh in 2014-2015
as compared to Rs. 6,930 Lakh of previous year representing 3.51% of
the Company*s turnover. About 79% of this represents exports. Turnover
increased by 7.25% over previous year.
Premium Organic Spirulina continued to outperform competition in its
segment with a growth of 10% over previous year. With the stabilized
Astaxanthin production process, the sales of Astaxanthin had doubled
over previous year.
A detailed analysis on the business segments is included in the
Management Discussion and Analysis Report, which forms part of this
During the year under review, Alagawadi Bireshwar Sugars Private
Limited ceased to be a subsidiary of the Company and Alimtec S.A. has
become a subsidiary.
There has been no change in the nature of business of the subsidiaries
during the year under review. In accordance with Section 129(3) of the
Companies Act, 2013, the Company has prepared a consolidated financial
statement of the Company and all its Subsidiary Companies, which is
forming part of the Annual Report. A statement containing the salient
features of the financial statements of the Subsidiary Companies are
given in Annexure-A to this Report.
In accordance with fourth proviso of Section 136(1) of the Companies
Act, 2013, the Annual Report of the Company containing therein its
standalone and consolidated financial statements has been placed on the
website of the Company, www.eidparry.com. Further, as per the fourth
proviso of the said section, the annual accounts of the Subsidiary
Companies and the related detailed information have also been placed on
the website of the Company www.eidparry.com.
The annual accounts of the Subsidiary Companies will also be available
for inspection by any shareholder/debenture trustees at the Registered
office of the Company and of the Subsidiary Companies concerned during
working hours upto the date of the Annual General Meeting. A copy of
annual accounts of subsidiaries will be made available to shareholders
seeking such information at any point of time.
Amalgamation of Subsidiary
The Hon*ble High Court of Bombay, vide its Order dated April 30, 2015
has approved the amalgamation of Parry Phytoremedies Private Limited,
a wholly owned subsidiary with the Company with appointed date of April
01, 2014. The merger will be effective upon filing the certified true
copy of the Order with the Registrar of Companies, Pune and Chennai.
DIRECTORS* RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134(3) of the Companies
Act, 2013, your Directors to the best of their knowledge and belief and
according to information and explanations obtained from the management,
* in the preparation of the annual accounts for the financial year
ended March 31, 2015, the applicable accounting standards have been
followed and there are no material departures from the same;
* the Directors have 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 as at March 31, 2015 and of the profit of the Company for
the year ended on that date;
* the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
* the Directors have prepared the annual accounts on a going concern
* the Directors have laid down proper internal financial controls to be
followed by the Company and such controls are adequate and operating
* the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of section 152 of the Companies Act,
2013 read with the Articles of Association of the Company,
Mr.V.Ravichandran, Director retires by rotation at the forthcoming
Annual General Meeting and being eligible offers himself for
reappointment. As required under clause 49 of the Listing Agreement, a
brief resume, expertise and details of other directorships of Mr.
VRavichandran are annexed to the Notice convening the 40th Annual
General Meeting of the Company.
The Company has received declarations from all the Independent
Directors confirming that they meet the criteria of independence as
prescribed under section 149(6) of the Companies Act 2013 and Clause 49
of the Listing Agreement with the Stock Exchanges.
Seven Meetings of the Board of Directors were held during the year, the
details of which are given in the Corporate Governance Report.
In accordance with the provisions of Section 134 of the Act and Clause
49 of the Listing Agreement, the Board has carried out evaluation of
its own performance, the performance of Committees of the Board,
namely, Audit Committee, Corporate Social Responsibility Committee,
Risk Management Committee, Stakeholders Relationship Committee, and
Nomination and Remuneration Committee and also the directors
individually. The manner in which the evaluation was carried out and
the process adopted has been mentioned in the Corporate Governance
The Board has on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration and also framed the criteria
for determining qualifications, positive attributes and independence of
directors. The Remuneration Policy and criteria for Board nominations
are given in Annexure - B1 & B2 to this Report.
Mr. V.Ramesh, Managing Director, Mr. V.Suri, Chief Financial Officer
and Ms. G.Jalaja, Company Secretary are the Key Managerial Personnel of
the Company as per section 203 of the Companies Act, 2013.
The shareholders at the 39th Annual General Meeting held on July 30,
2014 had appointed M/s. Deloitte, Haskins & Sells, Chartered
Accountants, (FR No.008072S) Chennai as the Statutory Auditors of the
Company to hold office upto the conclusion of the 42nd Annual General
Meeting, subject to the ratification of the appointment by members
every year. M/s. Deloitte Haskins & Sells, being eligible have
expressed their willingness to continue as the auditors of the Company
and accordingly, the ratification of their appointment is recommended
to the shareholders.
As per the requirement of the Central Government and pursuant to
section 148 of the Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014 as amended from time to time, your
Company*s cost records are subject to Cost Audit.
The Board of Directors, on the recommendation of the Audit Committee,
have appointed M/s. Geeyes & Co, Cost Accountants, Chennai as the Cost
Auditor to audit the cost accounting records maintained by the Company
for the financial year 2015-16 on a remuneration of Rs. 10,10,000/-
plus service tax as applicable and reimbursement of out of pocket
expenses. As required under the Companies Act, 2013, a resolution
seeking members ratification as approved by the Board for the
remuneration payable to the Cost Auditor forms part of the notice
convening the Annual General Meeting.
The cost audit report for the financial year 2013-14 was filed with the
Ministry of Corporate Affairs on September 29, 2014.
The Board has appointed M/s. R Sridharan & Associates, Practicing
Company Secretaries, Chennai as the Secretarial Auditor to undertake
the Secretarial Audit of the Company for the year 2014-15. The Report
of the Secretarial Auditors is provided in Annexure-C to this Report.
There are no qualifications, reservations or adverse remarks or
disclaimers made by the Statutory / Secretarial Auditors in their
respective reports. The Statutory Auditors have not reported any
incident of fraud during the year under review to the Audit Committee
of the Company.
INTERNAL FINANCIAL CONTROL
The Company has adequate Internal Controls with proper checks and
balances to ensure that transactions are properly authorised, recorded
and reported apart from safeguarding its assets. These systems are
reviewed and improved on a regular basis. It has a comprehensive
budgetary control system to monitor revenue and expenditure against
approved budget on an ongoing basis.
The Company*s Internal Audit division reviews the controls across the
key processes and submits reports periodically to the Management and
significant observations are also presented to the Audit Committee for
review. There is also a follow up mechanism to monitor implementation
of the various recommendations.
RISKS, CONCERNS AND THREATS
Pursuant to the requirement of Clause 49 of the Listing Agreement, the
Company has constituted a Risk Management Committee. The details of
Committee and its terms of reference are set out in the Corporate
Governance Report forming part of the Board*s Report.
The Company has a robust Risk Management framework to identify,
evaluate business risks and opportunities. This framework seeks to
create transparency, minimize adverse impact on the business objectives
and enhance the Company*s competitive advantage. The business risk
framework defines the risk management approach across the enterprise at
various levels including documentation and reporting.
The Company has formulated a Risk Management Policy.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is known for its tradition of philanthropy and community
service. As part of its initiative under Corporate Social
Responsibility drive, the Company has undertaken projects through AMM
Foundation, an autonomous charitable trust, engaged in philanthropic
activities in the field of Education and Healthcare, while also
pursuing various other CSR activities for the benefit of community in
and around its local areas of operations. The Company is committed to
identifying and supporting programmes aimed at:
* Empowerment of the disadvantaged sections of the society through
education, access to and awareness about financial services and the
* Provision of access to basic necessities like healthcare, drinking
water & sanitation and the like to underprivileged;
* Work towards eradicating hunger and poverty, through livelihood
generation and skill development;
* Supporting environmental and ecological balance through
afforestation, soil conservation, rain water harvesting, conservation
of flora & fauna, and similar programme;
* Promotion of sports through training of sports persons;
* Undertake rural development projects
The Company has constituted a CSR Committee in accordance with Section
135 of the Companies Act, 2013. The CSR Committee has formulated and
recommended to the Board, a CSR Policy indicating the activities to be
undertaken by the Company, which has been approved by the Board. The
CSR Policy may be accessed on the Company*s website at
As per the provisions of the Companies Act, 2013, the Company is not
required to spend any amount towards CSR activities for the year
2014-15. However, as the company has been actively involved in various
CSR activities in the past, an amount of Rs. 118.32 Lakh was spent
during the year. The Annual Report on CSR activities is given in
Annexure-D to this Report.
RELATED PARTY TRANSACTIONS
All contracts / arrangements / transactions entered into during the
financial year with the related parties were on arm*s length basis and
were in the ordinary course of business. There were no materially
significant related party transactions with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee
for approval. Prior omnibus approval of the Audit Committee is
obtained on a quarterly basis for the transactions which are of a
foreseen and repetitive nature. The transactions entered into pursuant
to the omnibus approval so granted are placed before the Audit
Committee for their approval on a quarterly basis. The policy on
Related Party Transactions as approved by the Board is available at the
weblink : http://www.eidparry.
EMPLOYEE STOCK OPTION SCHEME
The Company has not granted any Employee Stock Options during the year
2014-15. The details of the Options granted upto March 31, 2015 and
other disclosures as required under Clause 12 of Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 are provided in Annexure-E to
The Company has received a certificate from the Statutory Auditors of
the Company that the Scheme had been implemented in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 and the
resolutions passed by the Members in this regard.
The report on corporate governance along with a certificate from the
Auditors as required under the Listing Agreement with Stock Exchanges
is annexed to this Report. The report also contains the details
required to be provided on the board evaluation, remuneration policy,
implementation of a risk management policy, whistleblower policy /
vigil mechanism etc.
The Managing Director and the Chief Financial Officer have submitted a
certificate to the Board regarding the financial statements and other
matters as required under clause 49(IX) of the Listing Agreement.
In terms of the provisions of Clause 49 of the Listing Agreement, the
Management Discussion and Analysis forms part of this Report.
AWARDS & RECOGNITIONS
* Dun & Broadstreet has awarded the Company the Best Performing
Company award on an All India basis in the Sugar Sector during their
programme on India*s Top 500 Companies & Corporate Awards 2015.
* The Pugalur factory of the Company put India*s Sugar Industry on the
World map, by becoming the first sugar plant in Asia to be given the
Bonsucro certification, the world benchmark for sustainability
practices in Sugar production from sugarcane. This also marks the first
time in the world that the certification is being awarded to an
organisation working with small-holding sugarcane farmers. Bonsucro is
a global non-profit, multi- stakeholder organisation fostering the
sustainability of the sugarcane sector through its leading metric-based
certification scheme and its support for continuous improvement for
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
During the year, the Company has transferred an amount of Rs. 956465/-
being the unclaimed dividend for the year 2006-07 to the Investor
Education and Protection Fund established by the Central Government.
The Audit Committee comprises of Independent Directors namely Mr. M B N
Rao as the Chairman and Mr. Anand Narain Bhatia, Mr. V Manickam and
Mrs. Shyamala Gopinath as Members.
The CSR Committee comprises of Mr. V. Manickam, Independent Director as
the Chairman and Mr. V.Ravichandran, Non-Executive Non Independent
Director and Mr. V.Ramesh, Managing Director as members.
Vigil Mechanism & Whistle Blower policy
The Company has a Vigil Mechanism for directors and employees to report
genuine concerns and grievances and provides necessary safeguards
against victimisation of employees and directors.
The Audit Committee reviews on a quarterly basis the functioning of the
Whistle Blower and vigil mechanism. The Vigil Mechanism and Whistle
Blower Policy have been posted on the Company*s website at
www.eidparry. com and the details of the same are given in the
Corporate Governance Report.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The particulars relating to conservation of energy, technology
absorption, research and development, foreign exchange earnings and
outgo as required to be disclosed under section 134 (3)(m) of the
Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 are given in Annexure-F to this Report.
Loans, Guarantees and Investments
During the financial year, the Company had given loans, guarantees and
made investments within the limits as prescribed under section 185 and
186 of the Companies Act, 2013 details of which are given in Annexure -
G to this Report.
During the year, rating agency CRISIL has re-affirmed Long term
Borrowing rating of CRISIL AA- (Stable) and reaffirmed CRISIL A1
rating for its short term borrowing.
Particulars of Employees and Related Disclosures
The information required under section 197(12) of the Companies Act,
2013 read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and forming part of the Board*s
Report for the year ended March 31, 2015 are given in Annexure - H to
Extract of Annual Return
The extract of the Annual Return of the Company in Form MGT-9 is given
in Annexure - I to this Report.
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Details relating to deposits covered under Chapter V of the
Companies Act, 2013.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOS referred to in this
4. The Managing Director of the Company do not receive any
remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company*s
operations in future.
The Board places on record, its appreciation for the cooperation and
support received from investors, customers, suppliers, employees,
government authorities, banks and other business associates.
On behalf of the Board
Chen Anand Narain Bhatia
May 29, 2015 Chairman