Dear Members,
Your Board of Directors are pleased to present the 35th Annual
Report on the operations of the Company and the Audited Statement of accounts for the year
ended 31stMarch 2022.
FINANCIAL SUMMARY
Rs. in Crores
| Particulars |
Year Ended 31.03.2022 |
Year Ended 31.03.2021 |
| Total Revenue |
40.68 |
36.91 |
| Profit/(Loss) before Interest, Depreciation and Tax |
(16.82) |
(12.53) |
| Interest and Finance Charges |
0.01 |
2.11 |
| Cash Profit / (Loss) |
(16.83) |
(14.64) |
| Depreciation |
23.37 |
23.40 |
| Profit/(Loss) before Tax |
(40.20) |
(38.04) |
| Deferred Tax-Asset/ (Liability)/ Exceptional Items |
0.58 |
0.58 |
| Profit/(Loss) After Tax |
(39.62) |
(37.46) |
| Profit/(Loss) Brought forward from last year |
(159.90) |
(122.44) |
| Profit/(Loss) carried forward to Balance Sheet |
(199.52) |
(159.90) |
The financial statements have been prepared in compliance with the
Indian Accounting Standards.
PERFORMANCE
Financial Performance: During the year under review the total
income was Rs. 40.68 Crores as against the total income of Rs.36.91 Crores in the previous
year. The Company was not able to start the cane crushing operation in Unit II (Polur) and
Unit III (Kalayanallur) as the Company has not cleared the cane arrears relating to sugar
season 2018-19. The gross operating loss works out to Rs. 16.82 Crores as against the loss
of Rs.12.53 Crores in the previous year. During the year, the company has not charged
interest towards banks and financial institutions as our accounts are classified as NPA.
The cash loss works out to Rs.16.83 Crores as against the cash loss of Rs.14.64 Crores in
the previous year. The net loss after depreciation and deferred tax works out to Rs.39.62
Crores as against the loss of Rs.37.46 crores in the previous year.
Sugar: During this period under review, the Company has crushed
1.12 Lakh tonnes of cane as against 0.91 lakh tonnes of cane in the previous year.
Consequently, the total sugar production was 1.02 Lakh qtls as against 0.75 lakh qtls in
the previous year. The total sugar sold was 1.03 lakh qtls as against 0.74 Lakh qtls in
the previous year. The average sugar sales realization during the year was Rs. 3251/- qtl
as against the average realization of Rs.3366/qtl in the previous year.
Alcohol and Power: During the period under review, The Company
could not produce the alcohol and Power as the Company could not start the cane crushing
operation in Unit II (Polur) and Unit III (Kalayanallur) due to cane arrears relating to
the sugar season 2018-19 which are not yet paid by the Company.
RESERVES
Due to absence of profits in the current year no amount is proposed to
be transferred to General Reserves account on account of loss during the year.
DIVIDEND
Due to absence of profits in the current year, the Board of Directors
is unable to recommend any dividend for the year 2021-22.
BOARD MEETINGS
During the financial year 2021-22, 4 Board Meetings were held on
30.07.2021, 31.08.2021, 13.11.2021 and 14.02.2022. Details of Attendance of each director
furnished in the report on Corporate Governance in page No. 29.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. Visalakshi Periasamy (DIN 00064517)) retires by rotation at the
ensuing Annual General Meeting and being eligible offers herself for reappointment. Her
name has been proposed for reappointment.
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 systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
DECLARATION OF INDEPENDENT DIRECTORS
The independent directors have submitted their declaration as per
Sec.149 (7) that they continue to meet the criteria of independence as provided in Sec.149
(6).
POLICY ON DIRECTOR APPOINTMENT & REMUNERATION POLICY
The Nomination & Remuneration Committee constituted as per Section
178 of the Companies Act, 2013 has formulated the policy for appointment of Directors,
Senior Management etc., and this has been approved by the Board and posted on the
Companys Website. 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 are given below.
i) For Executive Directors: The remuneration of the Whole
Time/Executive Directors shall comprise of fixed component and a performance linked pay,
as may be fixed by the Nomination and Remuneration Committee (NRC) and subsequently
approved by the Board of Directors and Members. Performance Linked Pay shall be payable
based on the performance of the individual and the Company during the year. Remuneration
trend in the industry and in the region, academic background, qualifications, experience
and contribution of the individual are to be considered in fixing the remuneration. These
Directors are not eligible to receive sitting fees for attending the meetings of the Board
and Committees.
ii) For Non-Executive Directors: The Non
Executive Directors will be paid sitting fees for attending the Board
and Committee Meetings as per the stipulations in the Act, and the Articles of Association
of the Company and as recommended by the Nomination and Remuneration Committee. Different
scales of sitting fee may be fixed for each category of the directors and type of meeting.
However, the fees payable to the Independent Directors and Woman Directors shall not be
lower than the fee payable to other categories of directors. In addition to this, the
travel and other expenses incurred for attending the meetings are to be met by the
Company. The Company shall have no other pecuniary relationship or transactions with any
Non- Executive Director.
STATUTORY AUDITORS REPORT
M/s CNGSN Associates & LLP Chartered Accountants, Chennai (FRN
No.027501), appointed as Statutory Auditors of the Company in the Annual General Meeting
held in 25th September 2017 for a period of 5 years will continue as Auditors.
The following qualification was mentioned in the audit report as of 31st
March 2022 by the statutory auditors.
| The Company Stopped Providing Interest on the outstanding
borrowings from banks and financial institutions. Not restated the foreign currency loan.
Application filed for CIRP was admitted on 29-07-2021 by NCLT and IRP was appointed. |
Due to continues drought in Tamil Nadu for the years 2016 to
2018, the cane availability and consequent capacity utilisation for the sugar units in
Tamil Nadu has drastically come down to around 35%. On account of this, the Company could
not service the loans and the loans have slipped into NPA. Subsequently the loans have
become NPA in the books of the lenders and the company is not providing interest in the
books of the Company. Company is discussing with them for a one time settlement of the
principal outstanding as on the NPA date. Company is confident of settling the OTS with
bankers |
| Appointment of RP was admitted in the cast of one of the
major investees (Appu Hotels Ltd) of the company by the NCLT. There is a doubt about the
recoverability of the investments of Rs.1455.53 Lakhs |
Appu Hotels Limited assets are mainly of lands and well known
branded Five star Deluxe Hotels and the realisable value of Appu Hotels Ltd Assets are far
in excess of its liabilities. Hence the Company is confident of realising the value of the
investment stated in the books which is Rs 1455.53 lakhs. Since the CIRP proceedings of
the company are yet to come to closure. IRP is unable to make a comment. |
| There exists material uncertainty that cast a significant
doubt on the companys ability to continue as a going concern. |
The Company has submitted the resolution plans to Banks for
OTS and it is still under the consideration of Banks. The Company is confident of settling
the current issues with Banks and FIs. SISMA has also made representation to the Central
and State Government for extending necessary support to the Tamilnadu sugar units for
revival of the industry. Normal operations are expected to start shortly. Since the
resolution process is nearing completion with four resolution plans under consideration by
CoC, there is a significant possibility of the company to continue as going concern. |
| In the absence of approval by the IRP, the Company has
provided for certain employee/ other claims relating to earlier years/ periods aggregating
to INR 468.04 Lakhs during September 2021. |
Due to NCLT order dated 29.07.2021 to file the claim with
IRP, Company has provided for certain employee/ other claims relating to earlier years/
periods aggregating to INR 468.04 Lakhs during September 2021. |
| The Company has not obtained any actuarial report and
provision for the current year was made only on an estimated basis. |
The Company has not obtained any actuarial report due to
earlier year payment was not paid to the actuarial report valuer and provision for the
current year was made only on an estimated basis. |
| Auditor could not circulate for direct confirmation for bank
balances, borrowings, trade receivables, trade payables, advances received/ paid and for
deposits received/ paid, as the necessary information was not made available by the
Company to us. |
Company loan accounts have become NPA, There fore no change
in the bank balances, borrowings, trade receivables, trade payables, advances received/
paid and for deposits received/ paid. |
| No physical verification has been carried out by the
management during the year. |
No physical verification has been carried on by the
management during the year due to shortage of staffs at factory also there is no operation
in the factory. |
| The Company has not filed the quarterly/ annual financial
results with the stock exchanges within the stipulated time for certain quarters of the
last year and the current year. No penalty was provided in the Financial Statements |
The Company has not provided the penalty in the Financial
Statements. We will provide same in the next Quarter i.e. June 2022 |
SECRETARIAL AUDIT
Section 204 (1) of the Companies Act, 2013 requires that the
Secretarial Audit Report is to be attached to the Boards Report. M.Damodaran &
Associates LLP Practicing Company Secretaries, Chennai have conducted and submitted
the Secretarial Audit Report for the period from 1st April 2021 to 31st
March 2022. The Report was placed.
During the period under review the Company has complied with the
provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above
subject to the following Observations:
| Sr. Compliance Requirement (Regulations/ No
circulars / guidelines including specific clause |
Deviations |
Companys explanations |
| 1 As per Reg. 33(3) (d) of SEBI LODR read with SEBI Circular
dated 29/04/2021, timeline was extended for submission of approved financial results to
the stock exchange(s)for the quarter and the year ending 31/03/2021 up to 30/06/2021. |
The financial results for the quarter and the year ended
31/03/2021 were approved vide Board Meeting dated 30/07/2021 and submitted to stock
exchange(s) on 30/07/2021. |
The Company has complied this regulation with delay due to
nationwide Covid-19. |
| 2 As per Reg. 33(3) (a) of SEBI LODR, the listed entity shall
submit quarterly and year-to-date standalone financial results to the stock exchange(s)
within forty-five days of end of each quarter, other than the last quarter. |
The financial results for the quarter ended 30/06/2021 were
approved vide Board Meeting dated 31/08/2021 and submitted to stock exchange(s) on
31/08/2021. |
The Company has complied this regulation with delay due to
nationwide Covid-19. |
| 3 As per Reg. 30 read with Schedule III of SEBI LODR, every
listed entity shall make disclosures of outcome of meetings of the board of directors to
stock exchange(s) within 30 minutes of the closure of the meeting in which the financial
results was approved. |
The approved financial results for the quarter ended
30.06.2021, 30.09.2021 and 31.12.2021 was not intimated to the Stock exchange(s) within 30
minutes of conclusion of Board Meeting dated 31/08/2021. |
The Company has complied this regulation with minor delay. |
| 4 The Company should have adequate system to monitor Labour
and Industrial laws applicable to the Company. |
The Company have inadequate system to monitor Labour and
Industrial laws applicable to the Company. |
The Company has separate Human Resources and Personnel
departm ent at all Three factories to monitor the Labour and Industrial laws applicable to
the Company. |
LOANS, GUARANTEES OR INVESTMENTS.
Your Company has not given any loans or provided any guarantees or
acquired securities as defined in 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 arms Length pricing basis. The Audit Committee
granted Omni bus 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
2021-2022 which were in conflict with the interest of the Company or which requires the
approval of shareholders. Suitable disclosures as required under IND AS-24 have been made
in Note 47 of the Notes to the financial statements. Details of the transactions are
provided in Form AOC-2 which is attached as Annexure-III to this Report.
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. All the Banks/Financial Institutions had declared our accounts as non-
performing assets and issued notice to recall the loans.
AUDIT COMMITTEE
The Audit committee consists of the following Directors.
| 1. Mr P S Gopalakrishnan |
Chairman & Independent Director |
| 2. Dr K C Reddy |
Nominee Director (IREDA) |
| 3. Mr A Sennimalai |
Director |
| 4. Dr S Muthu |
Independent Director |
| 5. Mr R K Viswanathan |
Independent Director |
| 6. Mr P Selvam IAS (Retd) |
Independent Director |
The Committee met 4 times during the year, 30.07.2021, 31.08.2021,
13.11.2021 and 14.02.2022.
Details of Attendance of each director is furnished in the report on
Corporate Governance in Page No. 30
There were no instances where the Board has not accepted the
recommendations of the Audit Committee.
FOREIGN EXCHANGE EARNINGS AND OUT-GO, CONSERVATION OF ENERGY &
TECHNOLOGY ABOSORPTION
The details of measures taken for Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and Outgo are given in the Annexure.
SUBSIDIARY COMPANIES
The Company does not have any subsidiary or any Associate Company.
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
Companys Website.
At present the Company has not identified any element of risk which may
threaten the existence of the Company.
SIGNIFICANT AND MATERIAL ORDERS
Bank of India application was admitted by National Company Law Tribunal
(NCLT) under insolvency and Bankruptcy code 2016, vide is order No: IBA/976/2019 dated 29th
July 2021 and Mr S Rajendran was appointed as Interim Resolution Professional in the
matter of our company and taking over the charge of the company on 30th July
2021. IRP Mr S Rajendran has commenced the Corporate Insolvency Resolution Process (CRIP)
pursuant to NCLT order No: IBA/976/2019 dated 29th July 2021 and received four
resolution plans from various applicants and it was under scrutiny. However, the promoter
is taking efforts to settle the dues under section 12A of the IBC code 2016.
INTERNAL FINANCIAL 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 of the Company.
The Internal Audit Department monitors and evaluates the efficiency and
adequacy of internal financial 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 auditor Company undertakes corrective action in their
respective areas and thereby strengthens the financial controls. Significant audit
observations, if any, and recommendations along with corrective actions thereon are
presented to the Audit Committee of the Board.
DEPOSITS
During the financial year 2021-22 the Company has not accepted deposits
as defined in Section 73 and 74 of Chapter V of the Companies Act, 2013. Your Company
has complied with the provisions of Section 73 &74 and the rules
prescribed thereunder. Your Company has no unpaid deposits which were due or repayable as
on 31st March 2022. Your Company has not defaulted in repayment of the deposits
on the due dates. As on the date of this report, there are no deposits and unclaimed
deposits.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As per Section 135 of the Companies Act, a Corporate Social
Responsibility (CSR) Committee has been formed. CSR policy has been framed and is
available on the Website. Members of the Committee are:
| Sl.No Name of the Directors |
Category of Directors |
| 1 Mr P S Gopalakrishnan |
Non-Executive Independent Director |
| 2 Mr A Sennimalai |
Non-Executive Director |
| 3 Mr M Ramalingam |
Executive Director |
However, as the average of the net profits for the last 3 years is
negative, no CSR expenditure has been earmarked on this account.
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.
Criteria for evaluation of the performance of the Independent
Directors:
The criteria for evaluation of the performance of Independent Directors
include their qualification, experience, competency, knowledge, understanding of
respective roles (as Independent Director and as a member of the Committees of which they
are Members/ Chairpersons), adherence to Codes and ethics, conduct, attendance and
participation in the meetings, etc.
VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
Pursuant to Section 177(9) and 177(10) of the Companies Act, 2013 read
with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation
22 of the Listing Obligation and Disclosure Requirement Regulations 2015, the Board of
Directors had approved a 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.
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
Your Company is in compliance with the Corporate Governance regulations
as laid out in SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015. A
report on Corporate Governance in line with SEBI prescribed format incorporated in the
Listing Obligations and Requirement Regulations, is attached herewith. A certificate from
the Practising Company Secretary on compliance of conditions of Corporate Governance has
been obtained and copy enclosed to this report.
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 Companys website
www.dharanisugars.com
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.
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 Companys Website.No complaints were received during the year 2021-22
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Annexure attached to the Boards Report
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 Companys 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.
Directors of the Board and the designated employees have confirmed
compliance with the Code.
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 Companys 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 cooperation to
the management from the shareholders family since inception and is confident that this
partnership will sustain forever.
|
By order of the Board |
|
For Dharani Sugars and Chemicals Limited |
|
Dr Palani G Periasamy |
| Place: Chennai |
Executive Chairman |
| Date : 4th November 2022 |
(DIN No.00081002) |
+91-9892691696
