Naraingarh Sugar Mills Ltd Directors Report.
The Shareholders of
Naraingarh Sugar Mills Limited Naraingarh
Your Directors are pleased to present the 25th Annual report of your company along with audited annual accounts of the company for the period ended 31st March, 2018.
OPERATIONS & FINANCIAL RESULTS
|Year ended 31st March 2018||Year ended 31st March 2017 *|
|Income from operations|
|Net sales/income from operations||17188.23||18800.12|
|Other operating Income||43.76||76.00|
|Total expenses (excluding Depreciation and Finance costs)||18149.32||17295.40|
|Profit / (Loss) from ordinary activities after finance costs but before exceptional items||(2251.01)||1118.90|
|Other Comprehensive Income/(Loss)||(3.69)||(15.04)|
|Profit / (Loss) from ordinary activities before tax||(2254.70)||1103.86|
|Net Profit / (Loss) from ordinary activities||(1112.42)||1017.72|
* Figures for the year ended 31st March, 2017 have been reported as per Ind-AS.
It is informed that during the current financial year the company achieved a total income of Rs. 17245.59 Lac which is approximately 8.73% lower than the previous year figure of Rs 18894.98 Lac. The company had a net loss after tax of Rs. 1112.42 Lac compared to net profit after tax of Rs. 1017.72 Lac during last financial year. The comparative figures of Cane crushed and recovery during the current season and last season are given hereunder:-
We have set-up 25 MW Co-generation Power Plant in our Sugar Mill, the project cost was Rs. 116 Crores out of which IREDA (Indian Renewable Energy Development Limited) had financed Rs. 103.39 Crores. The loan was disbursed by IREDA only after signing the PPA with HPPC (Haryana Power Purchase Centre). We have commissioned our 25 MW Cogen Power Plant on 29th December 2017. We have exported around 3.46 Crores KWh (Units) till 31st March, 2018.. Besides, the company is also in the process to enhance the crushing capacity of the mill to 5500 TCD from the existing 4000 TCD as per the proposed plans of the company.
The proposed integrated project shall improve the quality of sugar for meeting the national and international standards while operating at optimum levels, thereby reducing the manufacturing costs and shall also provide raw material for cogen power plant in the form of Bagasse. In other words, this expansion and modernization program shall lend a new lease of life to the sugar factory.
Your Board hopes to improve in the years to come in the way of above mentioned modernization cum expansion project of the company.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015, a system has been put in place to carry out performance evaluation of the Board, its Committees and individual Directors.Criteria for performance evaluation is covered in the Corporate Governance Report
Directors to retire by rotation
In terms of Articles of association of the company, Mr. Sandeep Singh shall retire by rotation and being eligible o ersherself for re-appointment at the ensuing annual general meeting.
DIRECTORS RESPONSIBILITY STATEMENT
Following is the Directors Responsibility Statement as required under section 134(4) of the Companies Act, 2013, in respect of the Financial Statements, the directors confirm :
a) in the preparation of Annual Accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors 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 a airs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for maintenance of adequate accounting records in acordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) internal financial controls to be followed by the Company have been laid down, which are adequate and operating effectively;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and perating effectively
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Remuneration to Executive Directors:
The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by the Board in Board meeting, subject to the subsequent approval of the shareholders at the General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company.
This Nomination, Remuneration and Evaluation Policy (the "Policy") applies to the Board of Directors (the "Board") of NARAINGARH SUGAR MILLS LIMITED (the "Company").
This Policy is in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto. The primary objective of the Policy is to provide a framework and set standards for the nomination, remuneration and evaluation of the Directors and officials as may be prescribed. The Company aims to achieve a balance of merit, experience and skills amongst its Directors and Senior Management.
1.1 The Board is ultimately responsible for the appointment of Directors and Key Managerial Personnel.
1.2 The Board has delegated responsibility for assessing and selecting the candidates for the role of Directors to the Nomination and Remuneration Committee which makes recommendations & nominations to the Board.
2. Nomination and Remuneration Committee
The Nomination and Remuneration Committee is responsible for:
2.1. reviewing the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and making recommendations on any proposed changes to the Board to complement the Companys corporate strategy, with the objective to diversify the Board;
2.2. recommending to the Board on the selection of individuals nominated for directorship;
2.3. making recommendations to the Board on the remuneration payable to the Directors so appointed/reappointed;
2.4. assessing the independence of independent directors;
2.5 such other key issues/matters as may be referred by the Board or as may be necessary in view of the provision of the Companies Act, 2013 and Rules there under.
2.6 to make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract
2.7 ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
The Nomination and Remuneration Committee comprises of the following:
a) The Committee shall consist of a minimum 3 non-executive directors, majority of them being independent.
b) Minimum two (2) members shall constitute a quorum for the Committee meeting.
c) Membership of the Committee shall be disclosed in the Annual Report.
d) Term of the Committee shall be continued unless terminated by the Board of Directors.
a) Chairman of the Committee shall be an Independent Director.
b) In the absence of the Chairman, the members of the Committee present at the meeting shall choose one amongst them to act as Chairman.
c) Chairman of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders queries.
COMMITTEE MEMBERS INTERESTS
a) A member of the Committee is not entitled to be present when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated.
b) The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee.
a) Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee.
b) In the case of equality of votes, the Chairman of the meeting will have a casting vote.
4. Appointment of Directors
4.1 Enhancing the competencies of the Board and attracting as well as retaining talented employees for role of directors and at other senior positions in management are the basis for the Nomination and Remuneration Committee to select a candidate for appointment to the Board. When recommending a candidate for appointment, the Nomination and Remuneration Committee has regard to:
assessing the appointee against a range of criteria which includes but not be limited to qualifications, skills, regional and industry experience, background and other qualities required to operate successfully in the position, with due regard for the benefits from diversifying the Board;
the extent to which the appointee is likely to contribute to the overall effectiveness of the Board, work constructively with the existing directors and enhance the efficiencies of the Company;
the skills and experience that the appointee brings to the role of a director and how an appointee will enhance the skill sets and experience of the Board as a whole;
the nature of existing positions held by the appointee including directorships or other relationships and the impact they may have on the appointees ability to exercise independent judgment;
4.2 Personal specifications:
Degree holder in relevant disciplines;
Experience of management in a diverse organization;
Excellent interpersonal, communication and representational skills;
Demonstrable leadership skills;
Commitment to high standards of ethics, personal integrity and probity;
Commitment to the promotion of equal opportunities, community cohesion andhealth and safety in the workplace;
Having continuous professional development to refresh knowledge and skills.
5. Remuneration of Directors
The guiding principle is that the level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate Directors. The Directors salary shall be based & determined on the individual persons responsibilities and performance and in accordance with the limits as prescribed statutorily, if any.
The Nominations & Remuneration Committee determines individual remuneration packages for Directors of the Company taking into account factors it deems relevant, including but not limited to market, business performance and practices in comparable companies, having due regard to financial and commercial health of the Company as well as prevailing laws and government/other guidelines.
The Committee consults with the Chairman of the Board as it deems appropriate.
a) Base Compensation (fixed salaries) Must be competitive and reflective of the individuals role, responsibility and experience in relation to performance of day-to-day activities, usually reviewed on an annual basis; (includes salary, allowances and other statutory/non-statutory benefits which are normal part of remuneration package in line with market practices
b) Variable salary: The Nomination and Remuneration Committee may in its discretion structure any portion of remuneration to link rewards to corporate and individual performance, fulfillment of specified improvement targets or the attainment of certain financial or other objectives set by the Board. The amount payable is determined by the Committee, based on performance against pre-determined financial and non- financial metrics.
ii) Statutory Requirements:
Section 197(5) provides for remuneration by way of a fee to a director for attending meetings of the Board of Directors and Committee meetings or for any other purpose as may be decided by the Board.
Section 197(1) of the Companies Act, 2013 provides for the total managerial remuneration payable by the Company to its directors, including managing director and whole time director, and its manager in respect of any financial year shall not exceed eleven percent of the net profits of the Company computed in the manner laid down in Section 198 in the manner as prescribed under the Act. The Company with the approval of the Shareholders and Central Government may authorise the payment of remuneration exceeding eleven percent of the net profits of the company, subject to the provisions of Schedule V. The Company may with the approval of the shareholders authorise the payment of remuneration upto five percent of the net profits of the Company to its anyone Managing Director/Whole Time Director/Manager and ten percent in case of more than one such official. The Company may pay remuneration to its directors, other than Managing Director and Whole Time Director upto one percent of the net profits of the Company, if there is a managing director or whole time director or manager and three percent of the net profits in any other case. The net profits for the purpose of the above remuneration shall be computed in the manner referred to in Section 198 of the Companies Act, 2013
6. Independent Directors
6.1. The Independent Directors shall not be entitled to any stock option and may receive remuneration by way of fee for attending meetings of the Board or Committee thereof or for any other purpose as may be decided by the Board and profit related commission as may be approved by the members.
The sitting fee to the Independent Directors shall not be less than the sitting fee payable to other directors.
6.2. The remuneration payable to the Directors shall be as per the Companys policy and shall be valued as per the Income Tax Rules.
7. Evaluation/ Assessment of Directors of the Company
The evaluation/assessment of the Directors of the Company is to be conducted usually on an annual basis. The following criteria may assist in determining how effective the performances of the Directors have been:
Leadership & stewardship abilities
contributing to clearly de ne corporate objectives & plans
Communication of expectations & concerns clearly with subordinates obtain adequate, relevant & timely information from external sources.
regular monitoring of corporate results against projections
identify, monitor & mitigate significant corporate risks
assess policies, structures & procedures
direct, monitor & evaluate senior officials
review managements succession plan
Evaluation on the aforesaid parameters will be conducted by the Independent Directors for each of the Executive/Non-Independent Directors in a separate meeting of the Independent Directors. The Executive Director/Non-Independent Directors along with the Independent Directors will evaluate/assess each of the Independent Directors on the aforesaid parameters. Only the Independent Director being evaluated will not participate in the said evaluation discussion.
Personal Specification for Directors
1. Qualification - Degree holder in relevant disciplines (e.g. management, accountancy, legal); or - Recognized specialist
2. Experience - Experience of management in a diverse organisation - Experience in accounting and finance, administration, corporate and strategic planning or fund management - Demonstrable ability to work effectively with a Board of Directors
3. Skills - Excellent interpersonal, communication and representational skills - Demonstrable leadership skills - Extensive team building and management skills - Strong influencing and negotiating skills - Having continuous professional development to refresh knowledge and skill.
4. Abilities and Attributes - Commitment to high standards of ethics, personal integrity and probity - Commitment to the promotion of equal opportunities, community cohesion and health and safety in the workplace
5. Political inclinations and opinions.
M/s KD & Associates, Chartered Accountants (FRN No. 024293N) to hold office from the conclusion of this Annual General Meeting (AGM), until the conclusion of the fifth consecutive AGM of the Company to be held in year 2022 (subject to ratification of the appointment by the Members at every AGM), at a remuneration to be determined by the Board of Directors of the Company in addition to out of pocket expenses as may be incurred by them during the course of the Audit
As required under the provisions of section 139(1) of the Companies Act, 2013, the Company has received a written consent from M/s KD & Associates, Chartered Accountants to their appointment and a Certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Companies Act, 2013.
The Members are requested to appoint the Statutory Auditors as aforesaid and x their remuneration. The Auditors Report does not contain any qualification, reservation or adverse remark.
M/s Khushwinder Kumar & Co., Cost Accountants, Jalandhar were appointed as Cost Auditors for the financial year ended 31st March, 2019. Their report shall be submitted to the Department of Company A airs, Government of India in accordance with the requirements of law.
Pursuant to the provisions of section 204 of the Companies Act,2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co, Company Secretary (Certificate of Practice Number: 993) to undertake the Secretarial Audit of the Company.
In terms of provisions of sub-section 1 of section 204 of the Companies Act, 2013, the Company has annexed to this Board Report as Annexure A, a Secretarial Audit Report given by the Secretarial Auditor.
1. The official website is now active.
2. The company is in the process of taking corrective measures.
3. The company is in the process of taking corrective measures .
TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES AC,2013
For the financial year ended 31st March,2018, the company has transferred Rupees 566.87 lac from general reserves.
Keeping in view the financial constraints of the company, your directors have decided not to recommend any dividend for the year under review.
LOANS, GUARANTEES AND INVESTMENTS
The Company has following Loans, Guarantee given and Investments made under section 186 of the Companies Act, 2013 for the financial year ended 31st March 2018:
|SN||Date of Transaction||Particular/Purpose/Nature of Transaction||Amount of Transaction|
|1.||20.11.2014||SECURED RDEEMABLE NON CONVERTIBLE DEBENTURES OF IFCI LTD.||2,00,000/-|
RELATED PARTY TRANSACTIONS
All related party transactions entered during the year were in Ordinary course of business and on Arms Length basis. Further all the necessary details of transactions entered with the related parties are attached herewith in form no. AOC-2 for your kind perusal and information.(Annexure: B).
The company has not invited any public deposits under section 58A, 58AA of the Companies Act, 1956 during the financial year under review.
The Directors wish to place on record their appreciation of the earnest e orts and contributions made by employees at all level for the smooth operation of the company.
INTERNAL FINANCIAL CONTROLS
Your Company has in place, adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Your Company has a rich legacy of ethical governance practices many of which were implemented by the Company, even before they were mandated by law. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement form part of this Annual Report.
The Vigil Mechanism as envisaged in the Companies Act, 2013, the rules prescribed thereunder and the Listing Agreement is implemented through the Companys Whistle Blower Policy to enable the Directors and employees of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.
DETAILS ABOUT THE POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON CORPORATE SOCIAL RESPONSIBILITY INITIATIVES TAKEN DURING THE YEAR
As a responsible corporate citizen, the Company has always strived to maintain the highest standards of social responsibility, governance, safety and environmental performance. Pursuant to Section 135 of The Companies Act, 2013, your Directors have constituted Corporate Social Responsibility Committee (CSR) with three Directors, namely, Mr.Yogesh Jain, Non Executive Independent Director as Chairman, Mr. Sandeep Singh Whole Time Director, and Mrs. Satinder Kaur Bedi Non Executive Independent Director, as Members. It will formulate and recommend to the Board a CSR Policy and under that the activities to be undertaken, amounts to be spent and monitoring implementation thereof.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
The particulars as required under section 134(3)(m) of the Companies Act, 2013, the information relating to conservation of energy and technology absorption and Foreign Exchange earning and Outgo forms an integral part of this report and is annexed as Annexure C.
We take this opportunity to acknowledge our deep senses of gratitude to all banks, central/state government departments and other local authorities for unstinted and continued guidance and support. Our gratitude is also due to the shareholders for the con dence and faith they have reposed in us.
|BY ORDER OF THE BOARD|
|FOR NARAINGARH SUGAR MILLS LTD|
|Date: 14/08/2018||Sandeep Singh|
|Place: Chandigarh||Whole Time DIRECTOR|