To the Members
The Board of Directors of the Company presents its Annual Report
together with the Audited Financial Statements of the Company for the year ended 31st
March 2023.
| FINANCIAL HIGHLIGHTS |
|
(Rs in lakhs) |
| Particulars |
2022-23 |
2021-22* |
| Revenue |
|
|
| Sugar Division |
84266.50 |
34154.89 |
| Distillery Division |
14272.02 |
7350.72 |
| Cogeneration Division |
6837.02 |
1661.79 |
| Total Revenue |
105375.54 |
43167.40 |
| Other Income |
1472.08 |
1589.28 |
| Total Income |
106847.62 |
44756.68 |
| Profit/(Loss) before Finance Cost and
Depreciation & Amortisation Expense and Exceptional Items |
10498.60 |
3069.71 |
| Finance Cost |
10801.07 |
23316.76 |
| Provision for Depreciation & Amortisation |
3713.65 |
4580.98 |
| Net Profit before Exceptional Item and Tax |
(4016.12) |
(24828.03) |
| Exceptional Items Gain / (Loss) |
41061.91 |
6891.23 |
| Net Profit before Tax from continuing operations |
37045.79 |
(17936.80) |
| Provision for Tax |
(224.40) |
42.63 |
| Net Profit after Tax |
37270.19 |
(17979.43) |
| Profit from Discontinued Operation |
4511.62 |
2962.93 |
| Profit/(Loss) for the year |
41781.81 |
(15016.50) |
| Comprehensive Income |
(51.96) |
(15.98) |
| Total comprehensive Income |
41729.85 |
(15032.48) |
| *Figures are reclassified to make them
comparable with current years figures |
|
|
REVIEW OF OPERATION
The overall operational performance of the Company for the financial
year under review was better than that of the previous financial year with higher quantum
of sugarcane crushing. The recovery percentage was also slightly higher. There has been
improvement in the operations of other Divisions like distillery and power. In the selling
prices of sugar, industrial alcohol and power also, there were improvement during the
financial year. The operations of Dhenkanal Unit upto the date of sale and of Soya Unit
have been treated as discontinued operations. There is no change in the nature of business
during the financial year and until the date of this report.
SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during
the financial year 2022-23 is as under:
| Name of the unit |
Cane crushed (in MT) |
| Sakthinagar : |
13,23,251 |
| Sivaganga : |
3,45,314 |
| Modakurichi : |
4,47,844 |
During the year under review, 1.99 lakh MT of sugar was produced by the
Company as compared to 0.83 lakh MT in the previous year. The quantum of sugar sales and
the sale value have also gone up as compared to the previous year.
DISTILLERY DIVISION
During the year under review, 246.97 lakh litres (previous year 114.00
lakh litres) of industrial alcohol was produced at Sakthinagar Distillery Unit. Both
volume and value of sales of this Division have improved during the year as compared to
the previous financial year.
CO-GENERATION DIVISION
The total power generated in the co-generation plants during the
financial year was 2287.48 lakh units (previous year 881.11 lakh units) out of which
1353.60 lakh units (previous year 422.26 lakh units) of power was exported. The Company is
selling the power through Indian Energy Exchange (IEX) as well as directly to third
parties.
DISCONTINUED OPERATIONS
The members of the Company at the Extraordinary General Meeting held on
27th May 2022 approved sale of the Sugar and Distillery units at Dhenkanal, Orissa State
and the Soya unit at Pollachi, Tamilnadu. While the Sugar and Distillery units at
Dhenkanal have been sold as a going concern on slump sale basis for a consideration of
Rs.134.10 crores on 11th November 2022, sale of Soya unit is yet to be completed.
upto the date of sale, Dhenkanal unit crushed 13,410 MT of sugarcane
(2,72,344 MT for the previous year) and produced 1,901 MT of sugar (25,077 MT for the
previous year) and 9.80 lakh litres (56.13 lakh litres for the previous year) of
industrial alcohol.
22,060 tonnes (previous year 29,241 tonnes) of soya beans was crushed
in the Soya unit at Pollachi, Tamilnadu during the year under review. While there was
slight reduction in the quantum of soya products sold and in the sales value, there has
been marginal increase in the average realisation.
In terms of Ind AS-105, the operations of Dhenkanal units and of the
Soya unit were treated as discontinued operations and accounted accordingly.
IMPACT OF COVID-19 ON OPERATION
There was no material impact on account of Covid-19 pandemic on the
operations of the Company during the financial year 2022-23.
CURRENT FINANCIAL YEAR 2023-24
There has been improvement in the level of operations of the Company
during the financial year under review as compared with the previous year. It is expected
that the trend would continue with good monsoon and the Company looks forward a higher
volume of cane crush during the financial year 2023-24 with improved sugar recovery
percentage. Corresponding improvement is expected in distillery and power divisions also.
DEPOSITS
The Company has not accepted any deposit during the financial year
under review. At the end of the financial year, there was no unclaimed deposit.
CORPORATE INFORMATION
As mentioned in the last Boards Report, the Company has repaid its
liabilities to Bank of India and to Edelweiss Asset Reconstruction Company Limited. Asset
Reconstruction Company (India) Limited, which acquired certain loan liabilities of the
Company from various Banks, has reassigned the same to Phoenix ARC Private Limited
(Phoenix ARC). At the request of the Company, Phoenix ARC has restructured the loans at
Rs.151.15 crores (including interest till repayment) after waiving accrued interest
amounting to about Rs.480.73 crores. The balance outstanding as on the date of this Report
is Rs.63.26 crores.
DIRECTORS
Sri M. Srinivaasan (DIN 00102387) retires by rotation at the ensuing
Annual general Meeting and, being eligible, has offered himself for re-appointment.
Dr. M. Manickam (DIN 00102233) has been re-appointed by the Board as
Managing Director for a period of five years from 12th June 2023 without remuneration. The
said re-appointment is subject to the approval of the members of the Company at the
ensuing Annual general Meeting.
Sri V.K.Swaminathan (DIN 00210869) has been appointed as Additional
Director with effect from 10th June 2023 to hold office upto the date of next Annual
general Meeting of the Company. A notice has been received from a shareholder of the
Company proposing him for appointment as a Director in the ensuing Annual general Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
In pursuance of Section 134(5) of the Companies Act, 2013, the
Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures, if any;
(b) the Directors had 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 the end of the
financial year and of the profit of the Company for that financial year;
(c) the Directors had 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;
(d) the Directors had prepared the annual accounts on a going concern
basis;
(e) the Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and are
operating effectively; and
(f) 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.
MEETINGS OF BOARD OF DIRECTORS
The Board met six times during the financial year ended 31st March
2023. The details of the Board Meetings and the attendance of the Directors are given in
the Corporate Governance Report.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises of the following Directors as its
members:
1. Sri C.Rangamani, Chairman
2. Sri N.K.vijayan
3. Sri K.v.Ramachandran
4. Smt. Priya Bhansali
Details regarding meetings of the Audit Committee and the attendance of
the members are given in the Corporate governance Report.
BOARD EVALUATION
Pursuant to the provisions contained in the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a formal annual
evaluation of the performance of the Board, its committees and of individual Directors has
been made. The manner in which the evaluation was carried out and the process adopted are
given in the Corporate governance Report.
DETAILS OF REMUNERATION TO DIRECTORS
Details of ratio of remuneration to each Director to the median
employees remuneration and other disclosures required under Section 197(12) of the
Companies Act, 2013 and Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 are given in Annexure-A.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee and the details
of the Committee are set out in the Corporate governance Report. Pursuant to Regulation
17(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the
Board has laid down risk management policy to identify, evaluate and mitigate risks. It
seeks to ensure transparency and to minimise adverse impact on the business operations of
the Company.
The Company does not have any exposure to commodity risk except to the
extent of its own production of sugar, the main product of manufacture of the Company, the
selling price of which is subject to market fluctuations.
INTERNAL CONTROL
The Company has internal control system commensurate with the size of
the Company. Adequate procedures are set out for detecting and preventing frauds and for
protecting the Companys assets. The head of Internal Audit Team reports to the Chairman
of the Audit Committee for the purpose of maintaining independence and Internal Audit
Reports are placed before the Audit Committee together with statement of significant audit
observation and the suggested corrective action followed by a report on action taken
thereon. Further the Company has adequate internal financial control with respect to the
financial statements.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a whistle blower policy and a vigil mechanism for
Directors and employees to report genuine concerns in the prescribed manner. The vigil
mechanism provides adequate safeguards against victimisation and for direct access to the
Chairman of the Audit Committee in appropriate or exceptional cases. The details of the
whistle blower policy are posted on the website of the Company. No complaint has been
received under this mechanism during the year under review.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with Auditors Certificate with
respect to its compliance forms part of this Report.
A detailed Management Discussion and Analysis Report also forms part of
this Report
OTHER DISCLOSURES UNDER THE COMPANIES ACT 2013
i. Annual Return
A copy of the Annual Return for the financial year 2021-22 is placed on
the website of the Company www.sakthisugars.com.
ii. Changes in Share Capital
There is no change in the share capital during the financial year under
review.
iii. Policy on Directors Appointment and Remuneration
The Companys policy for selection and appointment of directors, senior
management personnel and fixation of their remuneration, including criteria for
determining qualifications, positive attributes, independence of a director, are available
in the Companys website www.sakthisugars.com and the salient features of the Policy are
given in Annexure-B.
iv. Related Party Transactions
All the related party transactions were on arms length basis. Prior
approval of the Audit Committee and/or Board, as the case may be, has been obtained for
the transactions with related parties. A statement of all related party transactions is
placed before the Audit Committee on quarterly basis.
There is no contract or arrangement with related parties attracting the
provisions of Section 188(1) of the Companies Act, 2013 during the financial year under
review.
The Related Party Transactions Policy as approved by the Board is
available on the Companys website www.sakthisugars. com. The details of the transactions
with Related Parties are provided in the accompanying financial statements.
v. Statement of declarations given by Independent Directors
The Independent Directors have given their declarations to the Board to
the effect that they meet with the criteria of independence as provided in Section 149(6)
of the Companies Act, 2013 and the relevant rules. They have also given a declaration
confirming compliance with Rule 6(1) and (2) of the Companies (Appointment and
Qualification of Directors) Rules 2014 regarding inclusion of their names in the databank
maintained by Indian Institute of Corporate Affairs. All the Independent Directors are
exempt from the requirement of the written test under Rule 6(4) of the said Rules.
vi. Significant material orders passed by court or authorities
There are no significant orders passed by Court or regulatory
authorities which would impact the status of the Company and its future operations.
vii. Particulars of loans, guarantees or investments
The Company has given corporate guarantee and security by way of
equitable mortgage of the immovable property of the Company at 180 Race Course Road,
Coimbatore in favour of Kotak Mahindra Bank Limited to secure the term loan of Rs.50
crores availed by ABT Limited, a related party in which some of the directors are
interested, during the financial year 2022-23 under Section 186 of the Companies Act,
2013. The loan availed by ABT Limited was given to the Company by way of inter corporate
deposit towards working capital. The Company has not given any loan or made any
investments during the financial year.
viii. Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The information on conservation of energy, technology absorption and
foreign exchange earnings and out go as required under Section 134(3)(m) of the Companies
Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-C.
ix. There are no material changes affecting the financial position of
the Company which have occurred between the end of the financial year and the date of this
report.
x. The Company has complied with the Secretarial Standards as may be
applicable to the Company.
statutory auditors
At the last Annual General Meeting of the Company, the members have
appointed M/s.P.N.Raghavendra Rao & Co., Chartered Accountants, as Statutory Auditors
for a term of office of five consecutive years from the conclusion of the 60th Annual
General Meeting held on 24th August, 2022 till the conclusion of the 65th Annual general
Meeting of the Company. The said Audit Firm has confirmed that they are not disqualified
for continuing as Statutory Auditors of the Company for the financial year 2023-24.
SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act 2013 and Regulation 24A of
SEBI (LODR) Regulations 2015, the Board of Directors of the Company has appointed
M/s.S.Krishnamurthy & Co., Company Secretaries, Chennai as Secretarial Auditors to
undertake the secretarial audit of the Company for the year ended 31st March 2023.
Secretarial Audit Report of M/s. S.Krishnamurthy & Co., Company Secretaries, Chennai
for the year ended 31st March 2023 is annexed as Annexure-D. As the Company does not have
any subsidiary, the question of appointment of Secretarial Auditor for material subsidiary
does not arise.
COST AUDIT
The Company is required to maintain cost records as specified by the
Central Government under Section 148(1) of the Companies Act, 2013 and accordingly such
accounts and records are made and maintained by the Company. M/s. STR & Associates,
Cost & Management Accountants, Tiruchirapalli, are the Cost Auditors appointed for
auditing the cost accounting records relating to Sugar, Distillery, Power and Soya
Divisions of the Company for the year ended 31st March 2023.
The said Firm has been appointed for the financial year ending 31st
March 2024 and necessary resolution for ratification of their remuneration is included in
the Notice for the ensuing Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a CSR Committee and has adopted a CSR
Policy and the same is available in the Companys website www.sakthisugars.com. The
composition of the CSR Committee is given in the Corporate governance Report. As the
Company has incurred loss for the three immediately preceding financial years, the
requirement of incurring expenditure towards fulfilment of its corporate social
responsibility does not arise during the financial year under review.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT 2013
The Company has complied with the provisions relating to the
constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place an
Anti-Sexual Harassment Policy in line with the requirements of the said Act. An Internal
Complaints Committee (ICC) has been set up at every work place of business to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. No sexual harassment complaint has
been received during the financial year 2022-23.
AUDITORS REPORT
With reference to the Statutory Auditors remark, your Directors wish to
state that the Company is confident of obtaining favourable award and considers the full
amount as recoverable. The Statement of impact on Audit Qualification is attached as
Annexure-E.
acknowledgement
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane growers, banks,
financial institutions and Government authorities. They also wish to appreciate the
dedicated services rendered by officers, staff and workers of the Company.
On behalf of the Board of Directors
| Coimbatore |
M Manickam |
| 10th June 2023 |
Chairman and Managing Director |
+91-9892691696
