Shree Renuka Sugars Ltd Directors Report.
The Board of Directors presents their Twenty-Second Annual Report and audited financial statements for the financial year ended 31st March, 2018.
STANDALONE FINANCIAL RESULTS
The highlights of the standalone financial results are as under:
(Rs in Million)
|Profit /(loss) before financial expenses, depreciation and exceptional items||(1431)||3334|
|Profit /(loss) before provision for tax and exceptional items||(8739)||(3119)|
|Provision for taxation:|
|- Deferred Tax||(6277)||(761)|
|Total comprehensive income/(loss)||(30440)||(2363)|
|Retained Earnings and Items of OCI brought forward from the previous year||6417||8905|
|Changes in Retained Earnings||(29149)||(1761)|
|Changes in Items of Other Comprehensive Income (OCI)||(1291)||(727)|
|Transfer to Debenture Redemption Reserves||-||(125)|
|Closing Retained Earnings and Items of OCI||(24023)||(6417)|
The Company achieved a turnover of Rs 59031 million for the year ended 31st March, 2018 as against Rs 79158 million for the previous year. The EBITDA for the year under review stood at Rs (1431) million as compared to Rs 3334 million for the previous year, while the Net Loss stood at Rs 29821 million as compared to Net Loss of Rs 2358 million for the previous year. Analysis of operating performance is covered under Management Discussion and Analysis which forms part of this Report.
DIVIDEND & DIVIDEND DISTRIBUTION POLICY
As the Company has incurred losses during the year under review, your Directors have not recommended any dividend for the financial year ended 31st March, 2018. The Dividend Distribution Policy of the Company may be accessed on the Companys website at www.renukasugars.com
TRANSFER TO RESERVES
Debenture Redemption Reserve is created to the extent of 25% of the non-convertible debentures (NCDs) equally over the period till maturity of the NCDs, as per the requirements of the applicable laws. During the current year, the Company has not created Debenture Redemption Reserve on outstanding amount of NCDs.
Your Company has not accepted any deposits from public/ shareholders in accordance with Sections 73 and 74 of the Companies Act, 2013.
During the year under review, your Company has allotted 5521 0.01% Non-Convertible Debentures (NCDs) of Rs 10 lacs each aggregating to Rs 5521 million to the lenders pursuant to debt restructuring exercise undertaken by the Company, by converting the part of the loans facilities availed by the Company from the lenders. The details of Debentures outstanding as on 31st March, 2018 are given in the financial statements.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis (MDA) report on the business and operations of the Company is given in a separate section and forms part of this Annual Report.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (the Listing Regulations), Consolidated Financial Statements of the Company have been prepared for the year under review. The audited Consolidated Financial Statements along with the auditors report thereon forms part of this Annual report.
A summary of the financial performance of each of the subsidiary, associate and joint venture companies in the prescribed Form AOC-1 is provided in the financial statements.
The Companys Policy for Determining Material Subsidiaries may be accessed on the Companys website at www.renukasugars.com
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and accounts of each of the subsidiaries of the Company are available on the website of the Company at www.renukasugars.com These documents will be made available to the Members for inspection at the Registered Office of the Company on all working days except Saturdays, Sundays and public holidays, between 9.00 a.m. and 6.00 p.m. upto the date of the ensuing Annual General Meeting. The Company will make available the documents of the subsidiaries upon request by any member of the Company interested in obtaining the same.
During the year under review, as a part of debt restructuring exercise, your Company allotted on preferential basis, 481,843,884 0.01% Compulsorily Convertible Preference Shares (CCPS) at Rs 16.28 each aggregating to Rs 7844.42 million to Wilmar Sugar Holdings Pte. Ltd., one of the promoter of the Company and also allotted 489,728,828 equity shares at Rs 16.28 each aggregating to Rs 7972.79 million, 4,28,08,858 0.01% Optionally Convertible Preference Shares at Rs 100 each aggregating to Rs 4280.89 million and 74,388,207 0.01% Redeemable Preference Shares at Rs 100 each aggregating to Rs 7438.82 million, to the lenders by converting the part of the loans facilities availed by the Company from the lenders. Subsequently, Wilmar Sugar Holdings Pte. Ltd. exercised the conversion option and converted 481,843,884 CCPS into equal number of equity shares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 (the Act), Mr. Stephen Ho Kiam Kong (DIN: 07584449), Director of the Company, is proposed to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment
Pursuant to the recommendation of the Nomination & Remuneration/Compensation Committee, the Board of Directors have approved appointment of Mr. Madhu Rao (DIN: 02683483) as an Independent Director for a period of 5 years with effect from 27th June, 2018. Mr. Atul Chaturvedi, Non-Executive Director, has assumed charge as Executive Chairman (KMP) with effect from 2nd July, 2018.
Brief resumes and other particulars of Mr. Madhu Rao and Mr. Stephen Ho Kiam Kong, as stipulated under Regulation 36(3) of the Listing Regulations/Secretarial Standard-2 on General Meetings, are given in the Notice of Annual General Meeting, which forms part of this Annual Report. The Board recommends the appointment of the aforesaid Directors for members approval.
The Company has received the declarations from the Independent Directors confirming that they satisfy the criteria of independence as prescribed under Section 149(6) of the Act and under the provisions of Listing Regulations.
Mrs. Vidya Murkumbi (DIN: 00007588) stepped-down as Executive Chairperson and Director of the Company effective from end of day on 30th June, 2018, upon completion of open offer by Wilmar Sugar Holdings Pte. Ltd.
Mr. Narendra Murkumbi (DIN: 00009164) stepped-down from the position of Vice Chairman & Managing Director of the Company effective from end of day on 30th June, 2018, upon completion of open offer by Wilmar Sugar Holdings Pte. Ltd. However, Mr. Murkumbi would continue as Non-Executive Director of the Company effective from 1st July, 2018.
Mr. Hrishikesh Parandekar (DIN: 01224244) resigned as Independent Director with effect from end of day on 30th June, 2018.
Mr. Sanjay Asher (DIN: 00008221) resigned as Independent Director with effect from end of day on 2nd July, 2018.
The Board places on record its appreciation towards valuable contribution made by outgoing directors during their tenure as a Director of the Company.
The policy of the Company on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act and Listing Regulations adopted by the Board is appended as Annexure 1 to the Boards Report. We a_irm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees.
As on date of this report, Mr. Atul Chaturvedi, Executive Chairman, Mr. Vijendra Singh, Whole-time Director, Mr. Sunil Ranka, Chief Financial Officer and Mr. Rupesh Saraiya are the Key Managerial Personnel of the Company.
MEETINGS OF THE BOARD
During the year, thirteen meetings of the Board of Directors were held, the details of which are given in the report on Corporate Governance.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with no material departures;
(b) that 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 a_airs of the Company as at 31st March, 2018 and of the loss of the Company for the year ended on that date;
(c) that the Directors have taken proper and su_icient 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;
(d) that the Directors have prepared the annual accounts on a going concern basis;
(e) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) that 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.
AUDITORS AND AUDITORS REPORT
M/s. S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) were appointed as Statutory Auditors of the Company at the 21st AGM held on 21st December, 2017, for a term of 5 consecutive years to hold Office from the conclusion of the 21st AGM till the conclusion of 26th AGM. In accordance with the Section 40 of the Companies (Amendment) Act, 2017, the appointment of Statutory Auditors is not required to be ratified at every AGM. Thus, M/s. S R B C & CO LLP will continue to hold Office till the conclusion of 26th AGM.
The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any adverse qualification, reservation, adverse remark or disclaimer.
During the year, the Statutory Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act.
Pursuant to the provisions of section 204 of the Companies Act, 2013, the Board had appointed M/s. Sanjay Dholakia & Associates, Practicing Company Secretary (Membership No. F2655/CP No. 1798), to conduct the Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March, 2018 is annexed herewith at Annexure 2 to this Report. The said report mentions that the Board of Directors of the company has approved the un_audited quarterly results for the quarter ended 31st December, 2017 on 12th March, 2018 and the Company has paid the requisite fees to BSE Limited and National Stock Exchange of India Limited for the same. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
The Board of Directors on the recommendation of the Audit Committee, have appointed M/s. B. M. Sharma & Co, Cost Accountants, as the Cost Auditor to audit the cost records for the financial year ending 31st March, 2019. Remuneration payable to the Cost Auditor is subject to ratification by the members of the Company. Accordingly, a resolution seeking members ratification for the remuneration payable to M/s. B. M. Sharma & Co, Cost Accountants, is included in the Notice convening the Annual General Meeting, along with relevant details, including the proposed remuneration.
CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as per the Companies Act, 2013 and the rules framed thereunder relating to conservation of energy, technology absorption, foreign exchange earnings and outgo forms part of this Report and is annexed hereto at Annexure 3.
In compliance with the Regulation 34 read with Schedule V of the Listing Regulations, a detailed report on Corporate Governance forms part of this Annual Report. A Certificate from the Practicing Company Secretary confirming compliance of the conditions of Corporate Governance as stipulated under the Listing Regulations is appended to the Corporate Governance Report.
As required under Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the CEO/CFO Certificate is attached with this Annual Report.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure 4 to this Report.
EMPLOYEE STOCK OPTION SCHEME
The Nomination & Remuneration/Compensation Committee of the Board of Directors of the Company, inter alia, administers and monitors the SRSL Employees Stock Option Plan-2011 ("Scheme") of the Company in accordance with applicable SEBI regulations. The disclosure relating to the Scheme and other relevant details are available on the Companys website at www.renukasugars.com
During the year under review, the Company has not granted any fresh Stock Options to the employees.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All Contracts/arrangements entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. Therefore, the disclosure in AOC-2 is not applicable for the financial year 2017-18. The details of transactions with related parties are given in notes to the financial statements. Details showing the disclosure of transactions with related parties as required under Ind AS-24 are set out in the financial statements.
The Companys Policy on Related Party Transactions may be accessed on the Companys website at www.renukasugars.com
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loans, guarantees given, securities provided and investments made are provided in the notes to the financial statements.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to Corporate Social Responsibility (CSR) by catering to the needs of the weaker sections of the society. Pursuant to the provisions of the Section 135 of the Companies Act, 2013 (the Act), your Company has constituted a CSR Committee of the Board of Directors to monitor the CSR activities of the Company. The details relating to the CSR Committee are described in the Corporate Governance Report forming part of this Annual Report. The CSR Policy of the Company may be accessed on the Companys website at www.renukasugars.com
The report on the CSR activities is provided at Annexure 5 to the Boards Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return (MGT-9) of the Company is annexed herewith as Annexure 6 to this Report.
RISK MANAGEMENT & INTERNAL FINANCIAL CONTROLS
The Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to recognize, assess and reduce exposure to risks wherever possible. The Companys Risk Management Policy is based on the philosophy of achieving substantial growth while mitigating and managing risks involved.
The Companys internal control systems with reference to the financial statements are adequate and commensurate with the nature of its business and the size and complexity of its operations. Periodic audits and checks are conducted and the controls to prevent, detect and correct any irregularities in the operations have been laid down by the Company.
WHISTLE BLOWER POLICY
Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, the Company has in place a Whistleblower Policy/Vigil Mechanism to deal with unethical behavior, victimisation, fraud and other grievances or concerns of directors and employees. The Whistleblower Policy can be accessed on the Companys website at www.renukasugars.com
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
("the Act") and Rules made thereunder, your Company has constituted Internal Complaints Committees.
During the year, there were no complaints received by the Company under the Act.
HUMAN RESOURCES _HR_
The Companys HR policies and procedures are designed to recruit and retain the best talent to support the operations of your Company and to align the interest of employees with the long term organisational goals.
MATERIAL CHANGES & EVENTS AFTER BALANCE SHEET DATE
During FY 18, the Company implemented a Resolution
Plan which contemplated Additional investment of
Rs 784.92 crores by Wilmar Sugar Holdings Pte. Ltd.
(WSH); upfront repayment and settlement of Rs 730.13 crores of the outstanding debt; waiver of Rs 657.99 crores of the debt; restructuring of the sustainable debt of SRSL through changes in the repayment terms by way of a rupee loan facility and a working capital facility; and conversion by certain lenders of part of the unsustainable debt into equity shares, optionally convertible preference shares, redeemable preference shares and non-convertible debentures.
Further, in connection with the Debt Restructuring Package, WSH, Wilmar International Limited, the Company and the Murkumbi Group have executed the Joint Venture Termination Agreement on 9th March, 2018, pursuant to which the earlier Joint Venture Agreement entered into among them, governing their mutual rights and obligations as shareholders including but not limited to management rights, reserved matters and transfer restrictions, has been terminated.
The Companys Brazilian subsidiary Shree Renuka Do
Brasil Participacoes Ltda (SRDBPL) together with all of its subsidiaries (collectively Renuka Brazil), had on 28th September, 2015, filed for protection under Judicial Recovery Law (Law 11.101/2005-Recuperao Judicial) in the designated court in the capital of the state of So Paulo.
On 6th July, 2018 a recovery plan of Renuka Vale do Ivai was approved by Creditors in the Creditors General Assembly and Court approval is awaited.
In Renuka do Brasil, the recovery plan was approved by creditors on 22nd May, 2017 and judge also approved the plan on 6th June, 2017. However the plan was not implemented as the Superior Court of Sao Paulo granted injunction to Banco Nacional do Desenvolvimento (BNDES Bank) to suspend the Amended RJ Plan and its effects.
Presently, new recovery plan is under discussion with Creditors and it will be presented for approval on 29th August 2018.
_ OTHER DISCLOSURES/REPORTING
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
Issue of equity shares with differential rights as to dividend, voting or otherwise.
Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.
APPRECIATION & ACKNOWLEDGEMENTS
The Board wishes to place on record its gratitude for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and cane growers and finally to all its members for the trust and confidence reposed on the Company. The Board further wishes to record its sincere appreciation for the significant contributions made by employees at all levels for their competence, dedication and contribution towards the operations of the Company.
|For and on behalf of the Board,|
|8th August, 2018, Mumbai|