TO THE MEMBERS OF E.I.D.-PARRY (INDIA) LIMITED
Your Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31,2015.
The financial summary, results of operations and state of affairs of the Company for the year are summarised below:
Rs. in Crore
|Profit Before Interest and Depreciation (EBITDA)||389.18||262.37||1119.12||1006.95|
|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 before minority interest||148.25||26.53||276.35||218.61|
|Net Profit After Tax after minority interest||148.25||26.53||116.79||77.97|
|Balance of profit brought forward||244.56||244.56||(57.96)||(147.79)|
|Depreciation impact on reserves||(3.10)||-||(10.75)||-|
|Balance available for appropriation||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 Meeting.
The company has transferred Rs. 15 Crore to the General Reserve .
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 BioPesticides 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 the Company.
PERFORMANCE OF BUSINESS SEGMENTS Sugar
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 previous year.
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 degrowth 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 degrowth 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 againstRs. 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 Report.
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 HonRs. 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.
DIRECTORSRs. 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, confirm that:
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 irregularities;
the Directors have prepared the annual accounts on a going concern basis.
the Directors have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively.
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. V.Ravichandran 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 Report.
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 like;
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 www.eidparry.com.
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. com/ContentFiles/Downloads/annualreport/ RPT_Policy.pdf
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 this Report.
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, multistakeholder organisation fostering the sustainability of the sugarcane sector through its leading metric-based certification scheme and its support for continuous improvement for members.
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 this Report.
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
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Anand Narain Bhatia , Chairman
M B N Rao , Director
V Ravichandran , Vice Chairman
V Manickam , Director
Company Head Office / Quarters:
Phone : Tamil Nadu-91-44-25306789 / Tamil Nadu-
Fax : Tamil Nadu-91-44-25341609 / Tamil Nadu-
E-mail : firstname.lastname@example.org
Web : http://www.eidparry.com
Karvy Computershare Pvt Ltd
Karvy Selenium Tow-B,Pl-31&32 Gachibowli ,Nanakramguda ,Hyderabad-500032
|Scheme Name||No. of Shares|
|Sundaram Select Midcap - (G)||24,22,500|
|UTI-Equity Fund (G)||11,32,400|
|UTI-Balanced Fund (G)||6,09,989|
|UTI-Mid Cap Fund (G)||5,54,000|
|Templeton India Equity Income Fund (G)||5,50,000|