Mar 31, 2023
The Directors present the 62nd Annual Report of the Company together with the Audited Financial Statements for the year ended March 31, 2023.
Financial summary & highlights of the company |
(Rs.in Lakhs) |
||
Financial Performance |
2022 - 2023 |
2021 - 2022 |
|
Total Income |
61,850 |
43,028 |
|
Profit/(Loss) before Interest, Depreciation |
6,916 |
5,646 |
|
Interest |
389 |
410 |
|
Depreciation |
1,404 |
1,410 |
|
Exceptional items (Debit) / Credit |
362 |
110 |
|
Profit/(Loss) Before Tax |
5,485 |
3,936 |
|
Tax Adjustments including Deferred Tax |
1,292 |
533 |
|
Profit / (Loss) after Tax before comprehensive Income |
4,192 |
3,403 |
|
Other Comprehensive Income Net of Tax |
(23) |
(27) |
|
Total Comprehensive Income |
4,170 |
3,376 |
The Company''s Profit before Tax for the year ended 31st March 2023 has increased by '' 1,549 lakhs to '' 5,485 lakhs as compared to '' 3,936 lakhs in the previous year. The total income from operations for the year ended 31st March 2023 is '' 60,997 lakhs as against '' 42,349 lakhs in the previous year. The increase in revenue is mainly due to higher sales volume of Sugar, Power and Bagasse.
Sugar industry Overview World Sugar:
The world sugar production during 2022 - 23 Sugar Year (SS) is expected to be around 180.4 million metric tons as against previous year''s 172.5 million metric tons. The sugar consumption during 2022 - 23 SS is expected to be 176.2 million metric tons as against 174.7million metric tons in the previous year. The sugar production in the forthcoming year 2023 - 24 SS is expected to be 182 million metric tons, to end up with a surplus.
india''s sugar production for the year 2022 - 23 SS is expected to be around 32.8 million metric tons against previous year''s 35.8 million metric tons. This decrease in production is mainly because of the reduction of cane yield in Maharashtra. The sugar consumption in the year 2022-23 SS is expected to be around 27.5 million metric tons.
Tamilnadu''s Sugar production for the year 2022 - 23 SS is expected to be around 1.6 million metric tons against i previous year''s 1.26 million metric tons. The rainfall was
normal in about 60 to 70% of the State''s area. However, about 2 districts in central Tamilnadu which are important cane growing areas recorded less rainfall. In addition, due to the higher cost of cane harvesting (manual) and the higher revenue reported in other competitive crops like Paddy, Banana, Cotton etc., the sugarcane planting got affected in most of the factories command area. It''s expected that there will be a reduction of fresh sugarcane planting area by around 40% compared to previous year.
The Company''s command area received about 26% less rainfall than the decade average rainfall. The fresh cane planting is expected to be around 70% of previous years achievement as the crop failure due to pest and disease incidence in the wet land areas has created fear among farming community. Confidence building measures are being taken up involving Senior Scientists from the Sugarcane Breeding Institute, Coimbatore and Senior officials from the Department of Agriculture, Tamilnadu.
Performance of Business segment Sugar
Your Company has crushed 10,87,693 tons of cane and produced 10,38,540 quintals of sugar as against crushing of 8,74,135 tons of cane and sugar production of 8,44,380 quintals in the previous year. In financial year 2022 - 23, the average Sugar recovery was 9.57% as against 9.70% in the previous year. The increase in cane crushing was possible on account of the increased area under sugarcane cultivation and yield. J
Your Company has produced 178.22 lakhs litres of alcohol during the financial year 2022 - 23 against 171.96 lakhs litres in the previous year. Your Company has supplied 8.93 lakh litres of Ethanol to Oil Marketing Companies during the ethanol marketing year 2021 - 22. For the marketing year 2022 - 23, against the order of 9.07 lakhs litres, 80,000 litres were supplied till March''23, and the balance quantity will be supplied before October'' 2023.
Co-generation of Power
During financial year 2022 - 23, the total power generation was 88.25 million units against 71.66 million units for the corresponding period of 2021 - 22. The increase in power production was due to the increase in cane crushing volume. Long term PPA with TANGEDCO continues for Sathamangalam unit with a tariff of '' 4.669/Kw-hr. The surplus power from the Kattur unit is being sold to the open access consumers through bilateral agreements / IEX.
The Board of Directors met on 30th May 2023 to take account of the full year performance, various growth opportunities, and also took note of the interim dividend of '' 0.50 paise per equity share of '' 10/- each declared during the year and the same was paid to the shareholders within the stipulated time. After reviewing this, the Board of Directors has decided to recommend a final dividend at the rate of 5% i.e., '' 0.50 paise per equity share of '' 10/- each for the financial year ended 31st March 2023. If the dividend is approved by the Members at the ensuing Annual General Meeting to be held on 10th August 2023, it will be paid on or before 07th September 2023 to those Members whose names appear in the Company''s Register of Members as at the close of business hours on Thursday, 03rd August, 2023.This together with interim dividend of '' 0.50 paise per share (5%) already paid, would aggregate to a total dividend of 10% i.e., '' 1.00 (Rupees one only) per equity share for the year 2022 - 23.
Conservation of Energy / Technology Absorption / Foreign Exchange Earning and Outgo (a) conservation of energy sathamangalam unit
actual energy savings |
capex. ('' in lakhs) |
|||||
sl. No. |
description |
Per day |
annual cost |
|||
(in units) |
('' in Lakhs) |
|||||
1 |
55 KW VFD for Sugar Cooling tower fan No.2 |
480 |
3.29 |
2.27 |
||
2 |
110 KW VFD for Injection Pump Motor-1 |
360 |
2.47 |
3.39 |
||
3 |
3.7 KW of Planetary Drive for C-After Pug Mill |
120 |
0.82 |
2.66 |
||
4 |
3.7 KW of Planetary Drive for B-Seed Mingular |
120 |
0.82 |
2.66 |
||
total |
1080 |
7.40 |
10.98 |
(i) To reduce the dependency on labour and to reduce the cost of cultivation of sugar cane, your company has facilitated development of mechanical cane planters to suit the soil and other field conditions prevailing in the command area. These planter machines can do six operations simultaneously thereby reducing the time consumed for planting besides reducing the cost by over 60%. As of now there are 5 planters in operation in both the units area.
(ii) Harvesting of sugar cane is the major labour intensive and expensive activity of sugarcane cultivation. To reduce the cost and to reduce the dependency of labour, your Company has deployed about 32 sugarcane harvesters through entrepreneurs. We hope in the coming years mechanized sugarcane cultivation will play a
V major role.
(c) Foreign exchange earnings and outgo ('' in Lakhs) |
||||
sl. No. |
Particulars |
2022 -2023 |
2021 -2022 |
|
(i) |
Total Foreign Exchange inflow |
- |
- |
|
(ii) |
Total Foreign Exchange outflow |
199.20 |
66.18 |
awards and Recognition sathamangalam
(i) National energy conservation award: In appreciation of achievements in energy conservation, the Ministry of Power, Govt.of India, has awarded âNational Energy Conservation Award - II prize (2019-21) in Sugar Sector to your Company''s Sathamangalam unit. The award was given by the Honourable Minster for Power, Government of India on 14th Dec. 2022.
J
(ii) Overall Best Performance award - under Category of Private Sugar Mills inTamil Nadu Region was received from the Government of Tamilnadu in May 2022.
(iii) Best Technical Efficiency (2021-22) - Silver award in Tamil Nadu Region was received from the SISSTA on 27.08.2022.
Kattur unit has received Best Distillery-Platinum Award-Tamilnadu Region from the SISSTA in Aug 2022. Research & Development:
Your Company has started a Research and Development (R & D) unit for the development of value added products from Sugar and molasses. A new R & D facility was built near Sriperumpudur at the cost of '' 10 Crores.The unit started functioning from April''23.
Board Meetings
During the year 04 Board Meetings and 04 Audit Committee Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between any two meetings was within the period as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and MCA circulars thereon.
directors and Key managerial Personnel
Mr. Arjun B Kothari, (DIN 07117816) Director is liable to retirement by rotation at the ensuing 62nd Annual General Meeting and being eligible offers himself for re-appointment. Mr. Arjun B Kothari, Managing Director, Mr. M. Silvester Goldwin, Whole Time Director, Mr. R. Krishnan, Chief Financial Officer and Mr. R. Prakash, Company Secretary are the Key Managerial Personnel of the Company as per section 203 of the Companies Act, 2013.
Mr. C.V. Krishnan, (DIN: 01606522) was re-appointed as the Independent Director of the Company for a second term of five consecutive years with effect from 28th May 2023 as approved by the shareholders at the 61st AGM. The Board is of the opinion that Mr. C.V. Krishnan is a person of integrity and possess relevant expertise and experience (including the proficiency) of the Independent Director who was appointed during the year. declaration from independent directors The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulations, 2015 that the Independent Directors of the Company continues to meet the criteria of their Independence laid down in Section 149(6) including the confirmations that their names have been included in the Data Bank maintained by the Indian Institute of Corporate Affairs and all the Independent Directors were exempted from undergoing the online proficiency self-assessment test for the Independent Directors pursuant to Rule 6(4) of
Companies (Appointment and Qualification of Directors) Rules, 2014.
During the year under review, the Independent Directors met on February 08, 2023 without the presence of Non -Independent Directors and members of the Management. composition of Audit committee The details of the composition of Audit Committee are provided in the Corporate Governance Report of this Annual Report. The Board has not rejected any proposal / recommendations of Audit Committee during the year. remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The salient features of the Remuneration Policy are stated in the Corporate Governance Report. The Remuneration Policy approved by the Board of Directors is posted on the website of the Company www.hckotharigroup.com/kscl Vigil mechanism / whistle Blower Policy
The Company has a vigil mechanism named âWhistle Blower Policyâ to deal with genuine concerns, if any, raised by the Directors / Employees. The details of Vigil Mechanism / the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the Company''s website www.hckotharigroup.com/kscl Prevention of insider Trading
The Company has adopted a Code of Prevention of Insider Trading with a view to regulating trading in securities by the Promoters, Directors and Designated Persons of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company''s shares by the Promoters, Directors and the designated persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. directors'' responsibility statement In terms of Section 134(5) of the Companies Act, 2013, the Directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
(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 at the end of the financial year and of the profit and loss of the company for that period;
(c) 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.
(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 were 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.
Material changes and commitments
There is no change in the nature of business of the company during the year. There is no material change or commitment affecting the financial position of the company that has occurred since 31st March 2023 to the date of this report.
The paid-up equity share capital of the Company as on March 31, 2023 was '' 8,288.86 Lakhs. The Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity.
As required under Section 92(3), copy of Annual Return is placed on the Company''s website.The web link to access the annual return is http://hckotharigroup.com/ kscl/?q=node/20
a) Statutory Auditors
The Statutory Auditors of the Company M/s. P. Chandrasekar LLP, Chartered Accountants (Registration No.: 000580S/S200066) has been reappointed for the second term by the Shareholders at the 61st AGM held on 3rd August 2022 to hold office till the conclusion of the 66th Annual General Meeting of the Company.
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. There are no qualifications or observations, or any adverse remarks made by the Auditors in their Report on the Financial Statements for the year 2022-23 and no fraud was reported by auditors under Section 143(12) of the Companies Act, 2013.
b) Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and V Audit) Amendment Rules, 2014, the Cost Audit Records
maintained by the Company in respect of its Sugar, Co-gen and Distillery Unit are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Mr. K. Suryanarayanan, Cost Accountant in Practice for conducting the audit of cost records of the Company and the remuneration payable to the Cost Auditor is required to be ratified by the Members in a general meeting. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to Mr. K. Suryanarayanan, Cost Accountant, is included at Item No. 04 of the Notice convening this 62nd Annual General Meeting.
c) Secretarial Auditor
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 Mr. M. Alagar, of M/s. M. Alagar and Associates, Chennai, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is forming part of this Annual Report. The Secretarial Report does not contain any qualifications or observations. Deposits
The Company has not accepted deposits either from the members or public falling within the ambit of Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year, hence, there were no outstanding deposits during and at the end of the financial year 2022 - 2023.
Holding Company
The holding Company, Parvathi Trading and Finance Company Private Limited which held 70.20% in Kothari Sugars and Chemicals Limited (KSCL) got amalgamated with NBK Real Estates Private Limited pursuant to the Scheme of Amalgamation for the Group Companies restructuring as approved by the Hon''ble National Company Law Tribunal, Chennai. Hence, NBK Real Estates Private Limited is the holding company of KSCL holding 70.20% with effect from 15.05.2023. However, the ultimate control of the Company remains with the same individuals, as before. Significant and Material Orders Passed by the Regulators
There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 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 Internal Audit function is carried out by an independent firm of Chartered Accountants. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Internal Audit Reports are placed before the Audit Committee on a quarterly basis for its scrutiny and suggestions, if any. The Internal Auditor attends the Audit Committee meetings.
The Internal Auditors monitor and evaluate the efficacy and adequacy of the internal 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 the Internal Auditors, the Company undertakes corrective action in the respective areas and strengthens controls.
Particulars of Loans, Guarantees or investments
The Company has not given any Loans or Guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the general investments made by the company are given in the notes to the financial statements.
Risk Management
Pursuant to the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has laid down the procedures to inform Board Members about the risk assessment and minimization procedures. Accordingly, the Company periodically submits the Risk Management Review Report to the Board for its review and suggestions.
Corporate Social Responsibility Policy
Pursuant to the provisions of section 135 and schedule VII of the Companies Act, 2013, Corporate Social Responsibility (CSR) Committee was formed to recommend (a) the policy on CSR and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors. The policy on CSR as approved by the Board is posted on the Company''s website www.hckotharigroup. com/kscl. A detailed Report on CSR activities in the prescribed format is forming part of this Annual Report. related Party Transactions
All related party transactions entered during the financial year were on an arm''s length basis and in the ordinary course of business. There were no ''material'' contracts or arrangements or transactions, and therefore disclosure in form AOC-2 is not required. All related party transactions are placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive in nature. For all the transactions entered pursuant to the omnibus approval so granted, a statement giving details of all such transactions is placed before the Audit Committee for their review on a quarterly basis.
The policy on Related Party Transactions as approved
by the Board is posted on the Company''s website www.
hckotharigroup.com/kscl
Pursuant to the provisions of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Board has carried out the Annual
Performance Evaluation of the Board, its Committees and of
individual directors in the format (questionnaire) prescribed
by the Nomination and Remuneration Committee of the
Company.
The structured questionnaire covers various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance etc.The performance evaluation of the Directors (without participation of the relevant Director) was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process. separate meeting of independent Directors The Independent Directors of the Company had met during the year on 08th Feb 2023 to review the performance of NonIndependent Directors and the Board as a whole, reviewed the performance of the Chairperson of the Company and also assessed the quality, quantity and timeliness of flow of information between the company management and the Board without the presence of the Non-Independent Directors and members of the Management.
disclosure about cost audit |
|||
Filing of cost audit report |
2022-2023 |
2021-2022 |
|
Due Date |
27.09.2023 |
27.09.2022 |
|
Actual Date |
30.08.2023 (Tentatively) |
22.08.2022 |
|
Cost Auditor Details |
Mr. K. Suryanarayanan, M.No. 24946, Chennai |
Mr. K. Suryanarayanan, M.No. 24946, Chennai |
|
Audit Qualification in Report |
- |
Nil |
The Company is listed in The National Stock Exchange of India Limited (NSE) and the Stock Code is KOTARISUG & ISIN INE419A01022. The Company confirms that it has paid the Annual Listing Fees for the year 2023 - 2024 to NSE where the Company''s Shares are listed.
sl. No. |
name |
designation |
Percentage of Increase |
|
(i) |
Mr. Arjun B. Kothari |
Managing Director |
As aproved by the Shareholders |
|
(ii) |
Mr. M. Silvester Goldwin |
Whole Time Director |
10% |
|
(iii) |
Mr. R. Krishnan |
Chief Financial Officer |
10% |
|
(iv) |
Mr. R. Prakash |
Company Secretary |
10% |
Corporate Governance and Shareholders information
Your Company has taken adequate steps to adhere to all the stipulations laid down in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report.
Certificate from the Practising Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Report.
Management Discussion and Analysis Report
A detailed discussion on the industry structure (dealing with world sugar and Indian sugar) as well as on the financial and operational performance is contained in the ''Management Discussion and Analysis Report'' that forms an integral part of this Report.
Disclosure under the Sexual Harassment of Women at workplace (prevention, prohibition and redressal) act, 2013
The Human Resources Department created an âInternal Complaints Committeeâ for the prevention and redressal of sexual harassment of women at workplace as per the requirement of Sexual harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013. There were no incidents of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.
Particulars pursuant to section 197(12) and the relevant rules:
a) The ratio of the remuneration of each director to the median employee''s remuneration for the financial year and such other details: Except Mr. Arjun B. Kothari, Managing Director and Mr. M. Silvester Goldwin, Whole Time Director of the Company, no other director was in receipt of remuneration except sitting fees.
sl. No. |
name |
designation |
ratio |
|
(i) |
Mr. Arjun B. Kothari |
Managing Director |
87:1 |
|
(ii) |
Mr. M. Silvester Goldwin |
Whole Time Director |
26.11:1 |
b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:
c) 5.05% increase has been reported in the median remuneration of employees in the financial year.
d) The number of permanent employees on the rolls of the company as on 31st Mar 2023: 521.
e) Increase of remuneration for employees was in the varying range of 5% to 22% and for KMP the increase was 10% for the year.
f) We affirm that the remuneration paid during the period under review is as per the Remuneration Policy of the Company.
compliance with secretarial standards
The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.
Statements in this Report, particularly those which relate to Management Discussion and Analysis describing the Company''s objectives, projections, estimates and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ from those either expressed or implied in the statement depending on the circumstances.
Your Directors thank the Banks, Customers, Farmers, Financial Institutions, Government Authorities, Suppliers and Shareholders for their continued support. Your Directors also place on record their appreciation for the services rendered by the employees of the Company.
Mar 31, 2018
DIRECTORSâ REPORT
To the Members
Your Directors present the 57th Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2018.
Financial Summary & Highlights of the Company '' in lakhs
Financial Performance |
2018-2017 |
2016 - 2017 |
|
Net Revenue |
29,526 |
33,457 |
|
Profit/(Loss) before Interest, Depreciation |
3,320 |
4,153 |
|
Interest |
650 |
811 |
|
Depreciation |
1,386 |
1,463 |
|
Exceptional items |
1,018 |
622 |
|
Proft/(Loss) Before Tax |
267 |
1,257 |
|
Tax Adjustments including Deferred Tax |
219 |
209 |
|
Profit / (Loss) after Tax before comprehensive Income |
48 |
1,048 |
|
Other Comprehensive Income Net of Tax |
(2.36) |
0.23 |
|
Total Comprehensive Income |
45.66 |
1,048.62 |
|
Appropriations: |
|||
Transfer to Capital Redemption Reserve |
- |
- |
|
Balance Carried Forward |
45.66 |
1,048.62 |
Operational Review and State of Affairs
Production Performance |
2017 - 2018 |
2016 - 2017 |
|
Cane Crushed (tones) |
5,50,416 |
7,89,583 |
|
Sugar Recovery (%) |
9.19 |
8.89 |
|
Sugar Produced from cane (Qtls) |
5,09,860 |
7,06,205 |
|
Sugar Produced from imported raw sugar (Qtls) |
48,580 |
- |
|
Alcohol Produced (KL) |
12,925 |
17,110 |
|
Power Produced (lakh kwh) |
499 |
707 |
The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazette dated February 16, 2015 notified the Indian Accounting Standards (Ind AS) applicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. For your company Ind AS is applicable from April 1, 2017, with a transition date of April 1, 2016.
The following are the areas which had an impact on account of transition to Indian Accounting Standard:
(a) Fair valuation of certain financial instruments.
(b) Employee costs pertaining to defined benefit obligations.
(c) Discounting of certain long-term liabilities.
The reconciliation and description of the effect of the transition to Ind AS have been provided in the notes to accounts in the standalone and consolidated financial statements respectively.
Sugar Industry Overview
The global sugar production in the sugar year 2017-2018 is expected to be around 190 million MT as against the consumption of 175 million MT. This will lead to a surplus of 15 million MT. Similarly 2018-2019 sugar year is also expected to be a surplus year. This is mainly on account of increased production in Brazil, India, European Union and Thailand. 2017-2018 sugar years'' global sugar consumption growth is reported as 1.4% and expected to increase to 1.6% in 2018-2019 against the long term level of 2%.
India''s sugar production for the Sugar Year 2017-2018 is expected to end up with 31.5 million MT against previous sugar year production of 20.3 million MT. This year production increase is mainly due to higher sugar cane yield and recovery from Maharashtra, UP and other northern states. 2018-2019 Sugar year will also be a surplus as the preliminary estimates are showing a production of around 33 million MT. The consumption is reported to be around 25.5 million MT.
Tamil nadu is affected due to failure of monsoon consecutively for the sixth year in a row which resulted in severe drought in many parts of the state. 2017-18 sugar years'' sugar production is expected to be around 0.58 million tons. The Company''s cane area is also facing severe drought conditions which may affect cane availability besides adversely affecting sugar cane yield and recovery.
performance of Business Segment Sugar
The acreage of sugarcane cultivation has come down drastically in the state of Tamilnadu in the last 6 years due to scanty rainfall, shift in cropping pattern and shrinkage of cultivable land. As a result the overall area under cane has come down and in turn cane availability has also come down and now Tamilnadu has moved down to 10thposition in the country''s overall cane availability.
Your company crushed 5,50,416 tons during 2017-18 financial year which is down by 30% compared to last year. This is mainly due to the water scarcity and severe drought being faced by the factory command area.
Your Company got an allotment of 5,280 MT of raw sugar under duty free import scheme of Government of India and processed it with one of the top most recovery of 96.01%. Your company has not imported the second tranche of raw sugar allotment because of unviable price and levy of 25% duty.
Alcohol
The Alcohol production reduced by 24% compared to the previous year because of shortage of molasses. Overall cane availability in the state has come down by 40%, due to which availability of molasses also reduced.
Co-generation of power
The power generation reduced by 29% compared to the previous year because of less number of operating days. Surplus bagasse from both the sugar units were sold in the market.
Conservation of energy / Technology Absorption / Foreign exchange earning and Outgo (a) Conservation of energy
Higher capacity motor used for DM water transfer pump was replaced with high energy efficient lower capacity motor.
(b) Technology absorption
Sugar colour at both Kattur and Sathamangalam plants improved to 51 ICUMSA and 56 ICUMSA level respectively as against the industry norm of below 100 ICUMSA. This has been achieved through in house R & D efforts. This is one of the best achieved sugar colour through sulphitation process.
Board Meetings
During the year 04 Board Meetings and 04 Audit Committee Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between two meetings was within the period as prescribed under the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
Share Capital
The paid up equity share capital of the Company as on March 31, 2018 was ''. 8,288.86 Lakhs. In accordance with the order of Appellate Authority for Industrial and Financial Reconstruction (AAIFR) dated 17th June 2004, the Redeemable Preference Shares of the Company issued on 19th July 2004 were entirely redeemed on 14th June 2016 out of the accumulated profits of the Company. The company has neither issued any shares with differential voting rights nor granted stock options or sweat equity.
Directors and Key Managerial Personnel
Mr.Arjun B Kothari, (DIN 07117816), was appointed as Managing Director till 31st March 2020 and he is liable to retire by rotation as a director at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
Mr.P.S. Balasubramaniam, Mr.V.R. Deenadayalu and Mr.P.S. Gopalakrishnan Independent Directors'', term expires on 31st March 2019 and the Board proposes to re-appoint them for a second term w.e.f. 01st April 2019 based on their respective performance evaluation.
Mr.Arjun B Kothari, Managing Director, Mr.R Krishnan, Chief Financial Officer and Mr. R Prakash, Company Secretary are the Key Managerial Personnel of the Company as per section 203 of the Companies Act, 2013.
Declaration from Independent Directors
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013, stating that each of them comply with the criteria of their Independence as laid down in Section 149(6).
Composition of Audit Committee
The Audit Committee comprises of the following directors for the year ended 31st March 2018:
Sl. No. |
Name of Directors |
Designation |
|
(i) |
Mr.P.S.Gopalakrishnan |
Chairman (Independent Director) |
|
(ii) |
Mr.V.R.Deenadayalu |
Member (Independent Director) |
|
(iii) |
Mr.P.S.Balasubramaniam |
Member (Independent Director) |
The Board has not rejected any proposal / recommendations of the Audit Committee during the year.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The details of the Remuneration Policy are stated in the Corporate Governance Report.
Vigil Mechanism
The Company has a vigil mechanism named âWhistle Blower Policyâ to deal with genuine concerns, if any, raised by the Directors / Employees. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the Company''s website www.hckotharigroup.com/kscl.
Sl. No. |
Particulars |
2017 - 2018 |
2016 - 2017 |
(i) |
Total Foreign Exchange earned |
- |
Nil |
(ii) |
Total Foreign Exchange outflow |
1469.49 |
35.22 |
(c) Foreign exchange earnings and Outgo '' in lakhs
prevention of Insider Trading
The Company has adopted a Code for Prevention 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 Company''s shares and prohibits the purchase or sale of Company''s 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. All the Directors and the designated employees have confirmed compliance with the Code.
Director''s Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013, the Directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(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 at the end of the financial year and of the profit and loss of the company for that period;
(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 were operating effectively.
(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.
Subsidiary Company
Kothari International Trading Limited (KITL) is a wholly owned subsidiary of the Company. It carries on the business as Merchants, Traders and Commission Agents.
KITL has incurred a Loss of Rs,.17.90 Lakhs for the year ended March 31, 2018 as against a Profit of Rs,. 29.21 Lakhs in the previous year.
A Statement containing salient features of the financial statement of the subsidiary Company viz. KITL in form AOC-1 is attached as a part of the Consolidated Financial Statement of the Company.
The Financial Statement of Kothari International Trading Limited, Subsidiary Company is kept at the registered office for inspection of members during working hours and the same is also available on the website of Kothari Sugars & Chemicals Limited. The Company shall provide free of cost, the copy of the financial statements of its subsidiary Company to the shareholders upon their request.
Associate Company
Kothari Petrochemicals Limited (KPL) is an Associate Company and it produces high quality Poly Iso Butylene of various grades using Iso Butylenes, being sourced from Refineries / Petrochemical complex and it continues to retain its status as the âLargest Poly Iso Butylenes (PIB) manufacturer in Indiaâ with an annual installed capacity of 24,000 tons.
In line with the requirement of Ind AS, the investments in the equity shares of Kothari Petrochemicals Ltd (Associate Company) have been restated at cost during the year. Consequently, the differential amount due to re-statement in value of such investments by Rs,. 1,178.60 Lakhs has been added to the Reserves and Surplus.
KPL has made a profit before tax of Rs,.14.47 Crores for the year ended March 31, 2018 as against Rs,. 9.95 Crores in the previous year.
extract of Annual Return
As required under section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT - 9 is attached as a part of this Annual Report as Annexure-I.
auditors
a) Statutory Auditors
M/s. P.Chandrasekar LLP, Chartered Accountants (Registration No.000580S/S200066), have been appointed as Statutory Auditors of the company till the conclusion of 61st Annual General Meeting. As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
b) Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit Records maintained by the Company in respect of its Sugar, Co-gen and Distillery Unit are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Mr.K.Suryanarayanan, Cost Accountant in practice for conducting the audit of cost records of the Company.
As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified by the Members in a general meeting. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to Mr.K.Suryanarayanan, Cost Accountant is included at Item No.3 of the Notice convening this Annual General Meeting.
c) Secretarial Auditor
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 Mr. M. Alagar, of M/s. M. Alagar and Associates, Chennai, Practicing Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as âAnnexure IIâ. The Report does not contain any qualification.
Deposits
The Company has not accepted deposits either from the members or public falling within the ambit of Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year. There were no outstanding deposits during and at the end of the financial year 2017 - 2018.
Significant & Material Orders Passed by the Regulators
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
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 Internal Audit function is carried out by an independent firm of Chartered Accountants. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Internal Audit Reports are placed before the Audit Committee for its scrutiny and suggestions, if any. The Internal Auditors attend the Audit Committee meetings.
The Internal Auditors monitor and evaluate the efficacy and adequacy of the internal 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 the Internal Auditors, the Company undertakes corrective action in the respective areas and strengthens the controls.
particulars of loans, Guarantees or Investments
The company has not given any Loans or Guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements.
Risk Management
Pursuant to the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had laid down the procedures to inform Board Members about the risk assessment and minimization procedures. Accordingly, the Company periodically submits the Risk Management Review Report to the Board for review and their suggestions.
Corporate Social Responsibility policy
Pursuant to the provisions of section 135 and schedule VII of the Companies Act, 2013, Corporate Social Responsibility (CSR) Committee was formed to recommend (a) the policy on Corporate Social Responsibility (CSR) and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors. The policy on Corporate Social Responsibility as approved by the Board is posted on the Company''s website www.hckotharigroup.com/kscl.
As part of its initiatives under âCorporate Social Responsibilityâ (CSR), the company has contributed funds for the schemes for promotion of education. The contributions in this regard have been made to a Registered Trust which is undertaking these schemes. Detailed Report on CSR activities in the prescribed format is forming part of this Annual Report.
Related Party Transactions
All related party transactions entered into during the financial year were on an arm''s length basis and in the ordinary course of business. There were no ''material'' contracts or arrangements or transactions, and therefore disclosure in form AOC-2 is not required.
All Related Party Transactions are placed before the Audit Committee as well as to the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseeable and of repetitive nature. For the transactions entered into pursuant to the omnibus approval so granted, a statement giving details of all related party transactions is placed before the Audit Committee on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is posted on the Company''s website www.hckotharigroup.com/kscl
Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees, in the format (questionnaire) prescribed by the Nomination and Remuneration Committee of the Company.
The structured questionnaire covers various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
The performance evaluation of the Directors (without participation of the relevant Director) was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.
Separate Meeting of Independent Directors
The Independent Directors of the Company had met during the year to review the performance of Non-Independent Directors and the Board as a whole, reviewed the performance of the Chairperson of the Company and also reviewed the access, the quality, quantity and timeliness of flow of information between the company management and the Board without the presence of the Non-Independent Directors and members of the Management.
Disclosure about Cost Audit
Filing of Cost Audit Report |
2017-2018 |
2016 - 2017 |
Due Date |
27.09.2018 |
27.09.2017 |
Actual Date |
30.08.2018 (Target) |
28.09.2017 |
Cost Auditor Details |
Mr.K.Suryanarayanan, M.No.24946, Chennai |
Mr.K.Suryanarayanan, M.No.24946, Chennai |
Audit Qualification in Report |
- |
Nil |
Listing with Stock Exchanges
The Company is listed in The National Stock Exchange of India Limited (NSE), Mumbai and the Stock Code is KOTARISUG & ISIN INE419A01022. The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 to NSE where the Company''s Shares are listed.
Corporate Governance and Shareholders Information:
Your Company has taken adequate steps to adhere to all the stipulations laid down in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Report.
Management Discussion and Analysis Report
A detailed discussion on the industry structure (dealing with world sugar and Indian sugar) as well as on the financial and operational performance is contained in the ''Management Discussion and Analysis Report'' that forms an integral part of this Report. particulars of employees
Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.
particulars pursuant TO section 197(12) And the relevant rules:
a) The ratio of the remuneration of each Director to the median employee''s remuneration for the financial year and such other details. No Director is in receipt of remuneration except sitting fees. (For this purpose, Sitting fees paid to the Directors have not been considered as Remuneration)
b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:
Sl. No. |
Name |
Designation |
percentage of Increase |
|
(i) |
Mr.Arjun B. Kothari |
Managing Director |
No Salary was paid during the year |
|
(ii) |
Mr.R.Krishnan |
Chief Financial Officer |
10% |
|
(iii) |
Mr.R.Prakash |
Company Secretary |
10% |
c) 4.84% increase has been reported in the median remuneration of employees in the financial year.
d) The number of permanent employees on the rolls of company as on 31st March 2018: 494
e) Average percentile increase already made in the salaries of employee''s other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:
Increase of remuneration for employees was in the range of 5% to 12% and for KMP the increase was 10% for the year.
f) We affirm that the remuneration paid during the period under review, is as per the Remuneration Policy of the company.
Consolidated Financial Statements
As stipulated by Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with applicable Accounting Standards along with Auditors Report and form part of this Annual Report.
Cautionary Statement
Statements in this Report, particularly those which relate to Management Discussion and Analysis describing the Company''s objectives, projections, estimates and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ from those either expressed or implied in the statement depending on the circumstances.
Acknowledgement
Your Directors thank the Banks, Customers, Debenture/ZCB Holders, Farmers, Financial Institutions, Government Authorities, Suppliers and Shareholders for their continued support. Your directors also place on record their appreciation for the services by the employees of the Company.
On behalf of the Board for Kothari
Sugars and Chemicals Limited
Place : Chennai Nina B. Kothari
Date : 28th May, 2018 Chairperson
Mar 31, 2016
To the Members
The Directors present the 55th Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2016.
Financial Summary & Highlights of the Company Rs.in lakhs
Financial Performance |
2015-16 |
2014-15 |
Net Revenue |
25,325 |
35,131 |
Profit/(Loss) before Interest and Depreciation |
2,399 |
2,050 |
Interest |
659 |
486 |
Depreciation |
1,464 |
1,598 |
Profit/(Loss) before Tax |
277 |
(35) |
Tax Adjustments including Deferred Tax |
159 |
419 |
Profit / (Loss) after Tax |
118 |
(454) |
Appropriations: |
||
Transfer to Capital Redemption Reserve |
350 |
288 |
Balance Carried Forward |
(232) |
(741) |
Operational Review and State of Affairs:
Sugar Industry Overview
For the sixth consecutive year the world sugar production has recorded a surplus with major contribution coming from Brazil and India. Due to excess production, the international price registered a huge fall which was the lowest in six years. The scenario in India is no different with the production outstripping demand for the sixth year in succession. A carryover stock of 9.08 million tonnes of previous years and estimated surplus production, led to a crash in sugar price to around Rs.21.50 per kg by July 2015.
However, the introduction of Minimum export quota on all sugar mills linked with incentive to the farmers has helped to improve the sugar price. Further due to the drought conditions prevailing in Maharashtra and parts of Karnataka, the production estimates were revised downward to 25.1 Million tons for the sugar year 2015 - 16. This has helped in firming up of sugar price further from December 2015 onwards and reached Rs.33/kg level by end March 2016.
The following were the major developments that had taken place during the year under review:
a) Govt of India has introduced âminimum indicative export quotaâ (MIEQ) to all sugar mills in order to liquidate some amount of surplus sugar from the market. Further a direct incentive of Rs.45 per Ton of cane was also announced to the farmers of those mills which comply with the obligation, (i.e.80% of MIEQ) in order to compensate the losses incurred through such exports.
b) Excise duty is exempted for Ethanol supplied to Public Sector Oil Companies under Ethanol Blending Program (EBP) with effect from 1st October 2015.
c) Excise duty of Molasses used for production of Ethanol is exempted with effect from 1st October 2015.
d) Government of India has notified an interest subsidy soft loan for one year period. Under the said scheme the interest subvention will be 10% borne by the Government of India and interest over and above that will be borne by the Company. The maximum eligible amount to each mill under this scheme shall be 11% of the value of sugar produced during the sugar year 2013 - 14.
Company Performance
Sl.No |
Quantitative Performance |
2015 - 2016 |
2014 - 2015 |
(i) |
Cane Crushed (Metric Tones) |
7,10,308 |
8,89,885 |
(ii) |
Sugar recovery (%) |
9.19 |
8.96 |
(iii) |
Sugar produced (Quintals) |
6,52,915 |
7,97,340 |
(iv) |
Alcohol produced (Kilo liters) |
15,750 |
15,792 |
(v) |
Power Generated (lakh Kwh) |
634 |
748 |
Sugar
The sugarcane availability has come down drastically in the state of Tamilnadu over a period of 5 years due to scanty rainfall, shift in cropping pattern and shrinkage of cultivable land due to urbanization. As a result the overall cane crushing has come down. However we have optimized the operations and recorded higher recovery rate of 9.19% against the previous year recovery of 8.96%. The sugar price registered a decline from around Rs.24/kg at the beginning of the year to around Rs.21/kg in the middle but firmed up thereafter to close at Rs.33/kg by the year end.
Alcohol
Though the cane crushing was much lower than in the previous year, we have operated the distillery unit at the optimum level to sustain the production by purchasing molasses from other factories. The realization was however lower than the previous year due to cheaper imports from other neighbouring states coupled with disparities in value added tax.
Co-generation of power
The power generation also dropped compared to the previous year due to a drop in the cane crushing. The power generation dropped by 15% compared to the previous year. The average realization per unit continued to be Rs.3.15 and Rs.3.67 respectively for Kattur and Sathamangalam units. TNERC has revised the tariff to Rs.3.52 and Rs.4.07 per unit for Kattur and Sathamangalam respectively. However, the implementation of the said recommendation by TANGEDCO is still under consideration.
Conservation of Energy / Technology Absorption / Foreign Exchange Earning and outgo:
(a) Conservation of energy:
(i) We have installed one no 37 KW Variable Frequency Drive for the old boiler FD fan drive at Kattur. With this modification, the Energy consumption of that equipment has come down to 50% of the earlier consumption level.
(ii) The inefficient open cum worm reduction gearing system of bagassee slat conveyor at Sathamangalam unit has been replaced with a planetary gear box. With this the energy consumption has come down by 15% and the installed drive has also been changed from 60 Hp to 50 Hp.
(b) Technology absorption:
Sugar colour at both Kattur and Sathamangalam plants has been improved to 60 ICUMSA and 67 ICUMSA level respectively as against the industry norm of below 100 ICUMSA. This has been achieved through in house R&D efforts. Further no additional energy or chemical is used for achieving the above improvement.
(c) Foreign exchange earnings and outgo: Rs.in lakhs
Sl. No. |
particulars |
2015 - 2016 |
2014 - 2015 |
(i) |
Total Foreign Exchange earned |
nil |
Nil |
(ii) |
Total Foreign Exchange outflow |
0.92 |
15.16 |
Dividend:
The Directors do not recommend a dividend for the current financial year due to inadequate profit and the prospects in the near future also being not very promising.
Board Meetings:
During the year, 06 Board Meetings and 04 Audit Committee Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between two meetings was within the period as prescribed under the Companies Act, 2013.
Share Capital:
The paid up equity share capital as on March 31, 2016 was Rs.8,288.86 Lakhs. The company has neither issued any shares with differential voting rights nor granted stock options or sweat equity.
Directors:
Mr.Arjun B.Kothari, (DIN 07117816) Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
Declaration from Independent Directors
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that each of them comply with the criteria of their Independence as laid down in Section 149(6).
Composition of Audit Committee
The Audit Committee comprised of the following directors for the year ended 31st March 2016:
Sl. No. |
Name of Directors |
Designation |
(i) |
Mr.P.S.Gopalakrishnan |
Chairman (Independent Director) |
(ii) |
Mr.V.R.Deenadayalu |
Member (Independent Director) |
(iii) |
Mr.P.S.Balasubramaniam |
Member (Independent Director) |
The Board has not rejected any proposal / recommendations of the Audit Committee during the year.
Remuneration policy
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The details of the Remuneration Policy are stated in the Corporate Governance Report.
Vigil Mechanism:
The Company has a vigil mechanism named âWhistle Blower policyâ to deal with genuine concerns, if any, raised by the Directors / Employees. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the Company''s website www.hckotharigroup.com/kscl
Prevention of Insider Trading:
The Company has adopted a Code for Prevention 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 Company''s shares and prohibits the purchase or sale of Company''s 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. All the Directors and the designated employees have confirmed compliance with the Code.
Director''s Responsibility Statement:
In terms of Section 134(5) of the Companies Act, 2013, the Directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(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 at the end of the financial year and of the profit and loss of the company for that period;
(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; and
(e) 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.
(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
Subsidiary Company
Kothari International Trading Limited (KITL) is a wholly owned subsidiary of the Company. It carries on the business as Merchants, Traders and Commission Agents and had secured Government of India recognition as an Export House.
KITL has made a profit before tax of Rs.53.58 Lakhs for the year ended March 31, 2016 as against Rs.43.39 Lakhs in the previous year.
Pursuant to Section 136 of the Companies Act, 2013, Companies are exempted from attaching the Annual Reports and other particulars of its subsidiary Companies along with the Annual Report of the Company. However, a Statement containing salient features of the financial statement of the subsidiary Company viz. KITL in form AOC-1 as a part of the Consolidated Financial Statement of the Company is attached.
The Financial Statement of Kothari International Trading Limited, subsidiary company is kept at the registered office for inspection of members during working hours and the same is also available on the website of Kothari Sugars & Chemicals Limited. The Company shall provide free of cost, the copy of the financial statements of its Subsidiary Company to the shareholders upon their request.
Associate Company
Kothari Petrochemicals Limited (KPL) is an Associate Company and it produces high quality Poly Iso Butene (PIB) of various grades using Iso Butylenes, being sourced from Refineries / Petrochemical complex and it continues to retain its status as the âLargest PIB manufacturer in Indiaâ with an annual installed capacity of 24,000 tons.
KPL has made a profit before tax of Rs.14.17 Crores for the year ended March 31, 2016 as against Rs.16.36 Crores in the previous year.
Extract of Annual Return:
As required under section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT - 9 is attached as a part of this Annual Report as per Annexure I.
AUDITORS:
a) Statutory Auditors
The Statutory Auditors of the Company, M/s.R.Subramanian and Company, Chartered Accountants, Chennai, hold office till the conclusion of the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and Rules framed there under.
The Audit Committee and the Board of Directors recommend the re-appointment of M/s.R.Subramanian and Company, Chartered Accountants, Chennai as the Auditors of the Company till the conclusion of 56th Annual General Meeting. The re-appointment proposed is within the time frame for transition under the third proviso to sub-section (2) of Section 139 of the Companies Act, 2013.
As required under SEBI Listing Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
b) Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit Records maintained by the Company in respect of its Sugar, Co-gen and Distillery Unit are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Mr.K.Suryanarayanan, Cost Accountant in practice for conducting the audit of cost records of the Company for the financial year 2016 - 17 on a remuneration of Rs.1,00,000. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to Mr.K.Suryanarayanan, Cost Accountant is included at Item No.4 of the Notice convening this Annual General Meeting.
c) Secretarial Auditor
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 Mr.M.Alagar, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as âAnnexure IIâ. The Report does not contain any qualification.
Deposits
The Company has not accepted deposits either from the members or public falling within the ambit of Chapter V of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 during the year. There were no outstanding deposits at the end of the year.
Significant & Material Orders Passed by the Regulators:
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
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 Internal Auditor function is carried out by independent firms of Chartered Accountants. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Internal Audit Reports are placed before the Audit Committee for its scrutiny and suggestions, if any. The Internal Auditors are present at all the meetings of Audit Committee.
The Internal Auditors monitor and evaluate the efficacy and adequacy of the internal 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 the Internal Auditors, the Company undertakes corrective action in the respective areas and strengthens the controls.
Particulars of Loans, Guarantees or Investments:
The company has not given any Loans or Guarantees covered under the provisions of section 186 of the Companies Act, 2013.
The details of the investments made by company are given in the notes to the financial statements.
Risk Management:
Pursuant to the requirement of SEBI Listing Regulations, 2015, the Company had laid down the procedures to inform the Board Members about the risk assessment and minimization procedures. Accordingly, the Company periodically submits the Risk Management Review Report to the Board for the review and suggestions.
Corporate Social Responsibility policy:
Pursuant to the provisions of section 135 and Schedule VII of the Companies Act, 2013, Corporate Social Responsibility Committee (CSR) was formed to recommend (a) the policy on Corporate Social Responsibility (CSR) and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors. The policy on Corporate Social Responsibility as approved by the Board is posted on the Company''s website www.hckotharigroup.com/kscl.
As part of its initiatives under âCorporate Social Responsibilityâ (CSR), the company has contributed funds for the schemes for promotion of education. The contributions in this regard have been made to a Registered Trust which is undertaking these schemes. Detailed Report on CSR activities in the prescribed format are attached in âAnnexure III
Related party Transactions:
All related party transactions entered into during the financial year were on an arm''s length basis and in the ordinary course of business. There were no ''material'' contracts or arrangements or transactions which were not at arm''s length basis and therefore disclosure in form AOC-2 is not required.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. For the transactions entered into pursuant to the omnibus approval so granted, a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis
The policy on Related Party Transactions as approved by the Board is posted on the Company''s website www.hckotharigroup.com/kscl
Formal Annual Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015, the Board has carried out the Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees, with the format (Questionnaire) prescribed by the Nomination and Remuneration Committee of the Company.
The structured questionnaire covers various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
The performance evaluation of the Directors (without participation of the relevant Director) was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.
Separate Meeting of Independent Directors
The Independent Directors of the Company had met during the year to review the performance of Non-Independent Directors and the Board as a whole, review the performance of the Chairperson of the Company and also reviewed the access, the quality, quantity and timeliness of flow of information between the company management and the Board without the presence of the Non-Independent Directors and members of the Management.
Disclosure about Cost Audit
Filing of Cost Audit Report |
2015-16 |
2014 - 2015 |
Due Date |
27.09.2016 |
30.09.2015 |
Actual Date |
31.08.2016 (Target) |
28.09.2015 |
Cost Auditor Details |
Mr.K.Suryanarayanan, M.No.24946, Chennai |
Mr.K.Suryanarayanan, M.No.24946, Chennai |
Audit Qualification in Report |
-- |
Nil |
Listing with Stock Exchanges:
The Company is listed in The National Stock Exchange of India Limited (NSE) and the Stock Code is KOTARISUG. The Company confirms that it has paid the Annual Listing Fees for the year 2016 - 2017 to NSE where the Company''s Shares are listed.
Corporate Governance and Shareholders Information:
Your Company has taken adequate steps to adhere to all the stipulations laid down in the SEBI Listing Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report.
Certificate from the Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI Listing Regulations, 2015 is attached to this Report.
Particulars of Employees and related disclosures.
Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.
No Employee draws remuneration in excess of the limits in terms of the provisions of the Section 197 (12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Consolidated Financial Statements
As stipulated by Regulation 34(2) of SEBI Listing Regulations, 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India along with Auditors Report and form part of this Annual Report.
Cautionary Statement
Statements in this Report, particularly those which relate to Management Discussion and Analysis describing the Company''s objectives, projections, estimates and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ from those either expressed or implied in the statement depending on the circumstances.
Acknowledgement
Your Directors thank the Banks, Customers, Debenture Holders, Farmers, Financial Institutions, Government Authorities, Suppliers and Shareholders for their continued support. Your directors also place on record their appreciation for the services by the employees of the Company.
On behalf of the Board
for Kothari Sugars and Chemicals Limited
Place: Chennai Nina B. Kothari
Date: May 27, 2016 Chairperson
Mar 31, 2015
Dear Members
The Directors present the 54th Annual Report of the Company together
with the Audited Accounts for the year ended March 31, 2015.
Financial Summary & Highlights of the Company (Rs. in Lakhs)
Financial Performance 2014-15 2013-14
Net revenue 35,131 33,274
Profit/(Loss) before
Interest and Depreciation 2,050 3,010
Interest 486 941
Depreciation 1,598 1,610
Profit/(Loss) before Tax (35) 459
Tax Adjustments including Deferred Tax 419 180
Profit / (Loss) after Tax (454) 279
Appropriations:
Transfer to Debenture Redemption Reserve - 75.00
Transfer to Capital Redemption Reserve 287.50 100.00
Proposed Dividend - 414.44
Dividend Distribution Tax - 70.43
Balance Carried Forward (741) (381)
operational Review and State of Affairs:
Sugar Industry overview
For the fifth consecutive year the world sugar production has recorded
a surplus with major contribution coming from Brazil and India. Due to
excess production, the international price registered a huge fall. This
made the Indian sugar exports unviable with export realization far
below the domestic price. The scenario in India is no different with
the production outstripping demand for the fifth year in succession.
For the sugar season 2014 -2015 (Oct-Sep) the estimated production in
India will be around 28 million tonnes (with Maharashtra, Karnataka and
Uttar Pradesh being the main contributors) as against the static demand
of around 24.80 million tonnes, leading to a current year surplus of
around 3.20 million tonnes.
With a carry over of 7 million tonnes of previous years, the overall
surplus sugar will be around 10.20 million tonnes. This has led to a
crash in sugar price resulting in prices nose diving to around Rs.23.50
to Rs.24 per Kg.
During the year under consideration, the Tamil Nadu Government removed
the purchase tax of Rs.60 per MT payable by the mills but introduced
VAT at 5% on sale of sugar, which works out to Rs.120/- per quintal.
With the implementation of VAT sales to markets in Kerala (Major market
for Tamil Nadu) has become unviable resulting in complete loss of
market to Karnataka since that state does not levy VAT.
With mounting cane outstanding of around Rs.20,000 Crores (all India)
the mills are under severe financial stress. To overcome this situation
the sugar industry through its representative body (SISMA /ISMA) has
made representation to the Central / State Govt. to ease the situation
and recommended the following measures:
a) The cane price should be proportional to the sugar price as
recommended by Dr.C.Rangarajan Committee.
b) Excise Duty should be removed on production of Ethanol which will
greatly help in the mandatory blending with petrol and will also result
in savings in foreign exchange.
c) Outright purchase of sugar to the extent of 10% of 2014 -15
production by the Central Government and paying for the same of around
Rs.8500 Crores which will enable the mills to clear the huge cane
outstandings.
d) Restructuring of loans taken by mills by extending repayment periods
with interest reduction.
Company Performance
Quantitative Performance 2014 - 2015 2013 - 2014
Cane Crushed (Metric Tones) 8,89,885 8,77,841
Sugar recovery (%) 8.96 8.42
Sugar produced (Quintals) 7,97,340 7,38,770
Alcohol produced (Kilo liters) 15,792 15,278
Power Generated (lakh Kwh) 748 771
a. Sugar
With drought conditions continuing to haunt Tamil Nadu, the cane
availability has come down drastically. Yet, your company managed to
increase the cane crushing marginally by over 1%. The production of
sugar however increased by 7.93% due to better recovery. The sugar
realisation has seen a decline from around Rs.30/- kg at the beginning
of the year to around Rs.24/-kg at the end of the year. This has led to
inventory write down which resulted in posting losses as the cost of
production was much higher than the actual realisation.
b. Alcohol
With only a marginal increase in sugar cane crushing the resultant
alcohol production which is dependent on Molasses (by-product of Sugar)
increased only marginally by 3.36% compared to the previous year. The
realisation was however much better than the previous year which helped
the Distillery division to post higher profits. The disparities in
value added tax between intra and inter state poses a serious threat in
terms of realisation compared to cheaper imports from other states.
c. Co-generation of power
The scenario here is no different from Sugar as the raw material for
power generation i.e. Bagasse which is a by-product of Sugar cane, was
in short supply. The power generation dropped by 3% compared to the
previous year. The average realisation per unit of sale is Rs.3.15 and
Rs.3.67 for Kattur and Sathamangalam units respectively. This is far
below the cost of production of power. The revision in tariff is
pending before TNERC for quite a long period and the Company eagerly
awaits upward revision in tariff.
Dividend:
The Directors do not recommend any dividend for the current financial
year due to loss incurred by the company and the prospects in the near
future also being not promising.
Board Meetings:
During the year, 05 Board Meetings and 04 Audit Committee Meetings were
held, the details of which are given in the Corporate Governance
Report. The intervening gap between two meetings was within the period
as prescribed under the Companies Act, 2013.
Share Capital:
The paid up equity share capital as on March 31, 2015 was Rs.8,288.86
Lakhs. The company has not issued any shares with differential voting
rights nor granted stock options nor sweat equity.
Directors and Key Managerial personnel:
The Board informs with deep regret the passing away of Shri
B.H.Kothari, Chairman and Managing Director of the Company on
22.02.2015. The Board places on record its deep appreciation of the
valuable contribution made by Mr. Kothari during his tenure as the
Chairman and Managing Director of the Company.
On the unanimous suggestion of the Board, Mrs.Nina B. Kothari was
elected as the Chairperson of the Board of Directors of the Company
w.e.f. 08.04.2015 in the place of Shri.B.H.Kothari.
The Board of Directors at its meeting held on April 08, 2015 appointed
Mr.Arjun B Kothari (DIN.07117816) as an Additional Director of the
Company to hold office up to the date of the forthcoming Annual General
Meeting of the Company and he is eligible for appointment as Director
by the members.
The Board of Directors appointed Mr.Arjun B Kothari as a Managing
Director and Whole Time Key Managerial Person of the Company w.e.f.
April 08, 2015 subject to approval from the Members and Central
Government. Mr.Arjun B Kothari has volunteered not to take any
remuneration.
Mrs.Nina B Kothari, (DIN 00020119) Director is retiring by rotation at
the ensuing Annual General Meeting and being eligible offers herself
for re-appointment.
Declaration from Independent Directors
The Company has received necessary declaration from each Independent
Director of the Company under Section 149(7) of the Companies Act, 2013
that each of them meets with the criteria of their Independence as laid
down in Section 149(6).
Composition of Audit Committee
The Audit Committee comprised of the following directors for the year
ended 31st March 2015:
Sl. Name of Directors Designation
No.
(i) Mr.PS.Gopalakrishnan Chairman (Independent Director)
(ii) Mr.PS.Balasubramaniam Member (Independent Director)
(iii) Mr.V.R.Deenadayalu Member (Independent Director)
The Board has not rejected any proposal / recommendations of the Audit
Committee during the year.
Remuneration policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Key Managerial Personnel and Senior Management and their remuneration.
The detail of the Remuneration Policy is stated in the Corporate
Governance Report.
Vigil Mechanism:
The Company has a Vigil Mechanism named "Whistle Blower Policy" to deal
with genuine concern raised by the Directors / Employees, if any. The
details of the Whistle Blower Policy is explained in the Corporate
Governance Report and also posted on the Company's website
www.hckotharigroup.com/kscl
prevention of Insider Trading:
The Company has adopted a Code for Prevention 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 Company's 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. All the
Directors and the designated employees have confirmed compliance with
the Code.
Director's Responsibility Statement:
In terms of Section 134(5) of the Companies Act, 2013, the Directors
state that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(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 at the end of the financial year and of the profit and
loss of the company for that period;
(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; and
(e) 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.
(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
Subsidiary Company
The Kothari International Trading Limited (KITL) is a wholly owned
subsidiary of the Company. It carries on the business as Merchants,
Traders and Commission Agents and had secured Government of India
recognition as an Export House.
KITL has made a profit before tax of Rs.53.55 Lakhs for the year ended
March 31, 2015 as against a profit of Rs.161.65 Lakhs in the previous
year.
Pursuant to Section 136 of the Companies Act, 2013, the Companies are
exempted from attaching the Audited Financial Statements and other
particulars of its subsidiary Companies alongwith the Annual Report of
the Company. However, a Statement containing salient features of the
financial statement of the subsidiary Company in form AOC-1 as a part
of the Financial Statements.
The Financial Statement of Kothari International Trading Limited,
subsidiary of your company is kept at the registered office for
inspection of members during working hours and the same is also
available on the website of Kothari Sugars & Chemicals Limited. The
Company shall provide the copy of the financial statements of its
subsidiary Company to the shareholders upon their request.
Associate Company
Kothari Petrochemicals Limited (KPL) is an Associate Company and it
produces high quality PIB of various grades using Iso Butylenes, being
sourced from Refineries / Petrochemical complex and it continues to
retain its status as the "Largest Poly Iso Butylene (PIB) manufacturer
in India" with an annual installed capacity of 24,000 tons.
KPL has made a profit before tax of Rs. 16.36 Crores for the year ended
March 31,2015 as against a profit of Rs.11.96 Crores in the previous
year.
Extract of Annual Return:
As required under Section 92(3) of the Companies Act, 2013 and Rule
12(1) of the Companies (Management and Administration) Rules, 2014, an
extract of Annual Return in MGT - 9 is annexed with this Report as
Annexure I.
AUDITORS:
a) Statutory Auditors
The Statutory Auditors of the Company, M/s.R.Subramanian and Company,
Chartered Accountants, Chennai, hold office till the conclusion of the
ensuing Annual General Meeting of the Company and being eligible, offer
themselves for re-appointment. The Company has received their written
consent and a certificate that they satisfy the criteria provided under
Section 141 of the Companies Act, 2013 and that the appointment, if
made, shall be in accordance with the applicable provisions of the
Companies Act, 2013 and Rules framed there under.
The Audit Committee and the Board of Directors recommend the
re-appointment of M/s.R.Subramanian and Company, Chartered Accountants,
Chennai as the Auditors of the Company in relation to the financial
year 2015- 16 till the conclusion of the next Annual General Meeting.
The re-appointment proposed is within the time frame for transition
under the third proviso to sub-section (2) of Section 139 of the
Companies Act, 2013.
As required under Clause 49 of the Listing Agreement, the Auditors have
also confirmed that they hold a valid certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India.
b) Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost
Audit Records maintained by the Company in respect of its Sugar, Co-gen
and Distillery Unit are required to be audited. Your Directors, on the
recommendation of the Audit Committee, appointed Mr.K.Suryanarayanan,
Cost Accountant in practice for conducting the audit of cost records of
the Company for the financial year 2015-16 on a remuneration of
Rs.1,00,000/- (Rupees One Lakh Only). As required under the Companies
Act, 2013, the remuneration payable to the Cost Auditor is required to
be placed before the Members in a General Meeting for their
ratification. Accordingly, a Resolution seeking Members' ratification
for the remuneration payable to Mr.K.Suryanarayanan, Cost Accountant is
included at Item No.6 of the Notice convening this Annual General
Meeting.
c) Secretarial Auditor
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 Mr.M.Alagar, Company
Secretary in Practice to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report is annexed as Annexure II.
Conservation of energy, technology Absorption and Foreign exchange
earnings and outgo
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule, 8 of The Companies
(Accounts) Rules, 2014, is annexed herewith as Annexure III.
Deposits
The Company has not accepted deposits either from the members or public
falling within the ambit of Chapter V of the Companies Act, 2013 and
The Companies (Acceptance of Deposits) Rules, 2014 during the year.
There were no outstanding deposits at the end of the year.
Significant & Material Orders Passed by the Regulators
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations.
Internal Control Systems and their Adequacy
The Company has an Internal Control system, commensurate with the size,
scale and complexity of its operations. The Internal Auditor function
is carried out by independent firm of Chartered Accountants. The scope
and authority of the Internal Audit (IA) function is defined by the
Audit Committee. The Internal Audit Reports are placed before the Audit
Committee for its scrutiny and suggestions, if any. The Internal
Auditors are present at all the meetings of Audit Committee.
The Internal Auditors monitor and evaluates the efficacy and adequacy
of the internal 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 the Internal Auditors, the
Company undertakes corrective action in the respective areas and
strengthen the controls.
particulars of Loans, Guarantees or Investments
The company has not given any Loans or Guarantees covered under the
provisions of section 186 of the Companies Act, 2013. The details of
the investments made by company are given in the notes to the financial
statements.
Risk Management policy
Pursuant to the requirement of Clause 49 of the Listing Agreement, the
Company had laid down the procedures to inform Board Members about the
risk assessment and minimization procedures. Accordingly, the Company
periodically submits the Risk Management Review Report to the Board for
the review and suggestions.
Corporate Social Responsibility policy
Pursuant to the provisions of Section 135 and Schedule VII of the
Companies Act, 2013, Corporate Social Responsibility (CSR) Committee
was formed to recommend: (a) the policy on Corporate Social
Responsibility and (b) implementation of the CSR Projects or Programs
to be undertaken by the Company as per CSR Policy for consideration and
approval by the Board of Directors. The policy on Corporate Social
Responsibility as approved by the Board is posted on the Company's
website www.hckotharigroup.com/kscl.
As part of its initiatives under "Corporate Social Responsibility"
(CSR), the company has contributed funds for the schemes for promotion
of education. The contributions in this regard have been made to a
Registered Trust which is undertaking these schemes. Detailed Report on
CSR activities in the prescribed format are attached in Annexure IV.
Related party Transactions
All related party transactions that were entered into during the
financial year were on an arm's length basis in the ordinary course of
business. There were no 'material' contracts or arrangements or
transactions which were not at arm's length basis and therefore
disclosure in form AOC-2 is not required.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval of the Audit
Committee is obtained for the transactions which are foreseeable and
repetitive nature. For the transactions entered into pursuant to the
omnibus approval so granted, a statement giving details of all related
party transactions is placed before the Audit Committee and the Board
of Directors for their approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is
posted on the Company's website www.hckotharigroup.com/kscl.
Formal Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out the Annual Performance
Evaluation of its own performance, the Directors individually as well
as the evaluation of the working of its Committees, with the format
(Questionnaire) prescribed by the Nomination and Remuneration Committee
of the Company.
The structured questionnaire covers various aspects of the Board's
functioning such as adequacy of the composition of the Board and its
Committees, Board culture, execution and performance of specific
duties, obligations and governance.
The performance evaluation of the Directors (without participation of
the relevant Director) was carried out by the entire Board. The
Directors expressed their satisfaction with the Evaluation process.
Separate Meeting of Independent Directors
The Independent Directors of the Company had met during the year to
review the performance of Non-Independent Directors and the Board as a
whole, review the performance of the Chairperson of the Company and
also reviewed the access, the quality, quantity and timeliness of flow
of information between the company management and the Board with out
the presence of the Non-Independent Directors and members of the
Management.
Disclosure about Cost Audit
Filing of Cost
Audit Report 2014 - 2015 2013 - 2014
Due Date 10.09.2015 27.09.2014
(Filed with MCA on
25.09.2014)
Cost Auditor Details Mr.K.Suryanarayanan, Mr.K.Suryanarayanan,
M.No.24946, Chennai M.No.24946, Chennai
Audit Qualification
in Report Nil Nil
Listing with Stock Exchanges:
The Company is listed in The National Stock Exchange of India Limited
(NSE) and the Stock Code is KOTARISUG. The Company confirms that it
has paid the Annual Listing Fees for the year 2015-2016 to NSE where
the Company's Shares are listed.
Corporate Governance and Shareholders Information:
Your Company has taken adequate steps to adhere all the stipulations
laid down in Clause 49 of the Listing Agreement. A report on Corporate
Governance is included as a part of this Annual Report.
Certificate from the Statutory Auditors of the company confirming the
compliance with the conditions of Corporate Governance as stipulated
under Clause 49 of the Listing Agreement is attached with Corporate
Governance Report.
particulars of employees and related disclosure
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are provided in the Annual Report.
No Employee draws remuneration in excess of the limits in terms of the
provisions of the Section 197(12) of the Companies Act, 2013 read with
Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
Consolidated Financial Statements
As stipulated by Clause 32 of the Listing Agreement with the Stock
Exchanges, the Consolidated Financial Statements have been prepared by
the Company in accordance with applicable Accounting Standards issued
by the Institute of Chartered Accountants of India alongwith Auditors
Report and form part of this Annual Report.
Cautionary Statement
Statements in this Report, particularly those which relate to
Management Discussion and Analysis describing the Company's objectives,
projections, estimates and expectations may constitute 'forward looking
statements' within the meaning of applicable laws and regulations.
Actual results may differ materially from those either expressed or
implied in the statement depending on the circumstances.
Acknowledgement
Your Directors thank the Banks, Customers, Debenture Holders, Farmers,
Financial Institutions, Government Authorities, Suppliers and
Shareholders for their continued support. Your directors also place on
record their appreciation for the committed services by the employees
of the Company.
On behalf of the Board
for Kothari Sugars and Chemicals limited
Place: Chennai Nina B. Kothari
Date: May 29, 2015 Chairperson
Mar 31, 2014
Dear Members,
The Directors present the 53rd Annual Report of the Company together
with the Audited Accounts for the year ended March 31, 2014.
The financial highlights of the Company for the year are summarised
below.
(Rs. in Lakhs)
Description 2013-14 2012-13
Profit/(Loss) before Interest and Depreciation 3,010.89 4,133.27
Interest 941.33 528.74
Depreciation 1,609.62 1,689.21
Proft/(Loss) Before Tax 459.19 1,915.32
Tax Adjustments including Deferred Tax 180.47 1,054.00
Profit / (Loss) after Tax 278.72 861.32
Transfer to Debenture Redemption Reserve 75.00 75.00
Transfer to Capital Redemption Reserve 100.00 100.00
Proposed Dividend 414.44 -
Dividend Distribution Tax 70.43 -
Your Directors are pleased to report that despite adverse conditions
like drought and low sugar price, your Company could post a net profit
of Rs.279 lakhs for the financial year 2013-14.
operations and performance
Due to severe drought in Tamil Nadu which has resulted in low recovery
of sugar and reduced cane availability, the gross total income for the
financial year 2013-14 was only Rs.33,274 lakhs as against Rs.44,091
Lakhs for the financial year 2012-13. In addition to the above, reduced
sugar prices along with lower power income and high cost of molasses
procurement resulted in a lower net profit of Rs.279 lakhs for the year
compared to Rs.861 lakhs for the previous year.
Kothari sugars and chemicals Limited Bags National energy conservation
Award - 2013
Kothari Sugars and Chemicals Limited, Unit-2 at Sathamangalam in
Ariyalur District was honoured with the prestigious National Energy
Conservation Award for the year 2013 by Ministry of Power, Government
of India. Your Company has won the First prize in the Sugar sector for
the innovation in energy conservation and utilization of energy. This
is the second award for Energy Conservation in the last 5 years. The
Award was received by Mr.M.Silvester Goldwin, President - Operations on
behalf of the Company from the Honorable President of India Shri Pranab
Mukherjee and Honorable Minister of State for Power Shri Jyotiraditya
M.Scindia at the grand event in New Delhi on December 16, 2013.
division-wise performance of the company is given below:
a. sugar
High cost of Sugar Cane and related inputs together with low sugar
price and lower recovery of sugar resulted in lower performance. The
drastic reduction in cane availability in the financial year has
translated into significant underutilization of the installed capacity
of sugar, distillery and cogen units and consequent reduction in
profitability.
Kattur unit: The plant at Kattur had crushed 3,41,824 Metric Ton (MTs)
of sugarcane with an average recovery of 8.31% during 2013-14 as
against 6,04,644 MTs during 2012-13 with an average recovery rate of
9.01%.
sathamangalam unit: The Plant at Sathamangalam unit had crushed
5,36,017 MTs of sugarcane with an average recovery of 8.30% in 2013-14
as against 7,03,911 MTs in 2012-13 with an average recovery rate of
8.83%.
Your company has promoted a number of scientific agricultural practices
like chip bud seedling plantation, drip irrigation, wider space
plantation, mechanical harvesting etc., which have helped in improving
the overall performance of the company.
Your directors would like to place on record their gratitude to the
Central Govt. for releasing Interest free loan with two year moratorium
and three year repayment period under "Scheme for Extending Financial
Assistance to Sugar Units (SEFASU) 2014" to clear the cane arrears of
the sugar undertakings and this loan has helped your company to pay the
cane payment arrears.
b. Co-generation
Power exported during the financial year 2013-14 at Kattur unit was
5.528 Mu (Million Units) as against 12.779 Mu during 2012-13 and in
Sathamangalam unit, power exported during 2013-14 was 35.065 Mu as
against 53.653 Mu during 2012-13. The company sold surplus bagasse to
Tamil Nadu Newsprint Limited (TNPL) which has helped to reduce the
losses in sugar and cogen operations to some extent.
c. Distillery
Alcohol production during the financial year 2013-14 was 15,278 KLs
(Kilo Litres) as against 19,486 KLs in 2012-13. The demand for alcohol
by the IMFL (Indian Made Foreign Liquor) units in the State remained
high. Despite high procurement rate of molasses, the systematic
planning of our team helped us to procure good quality molasses to
increase the yield. Similarly, improved marketing strategy for sale of
ENA has also helped us in getting better average realisation.
BIFR''s Status:
Your directors are happy to inform that AAIFR has issued its order in
favour of the company to provide reliefs and concessions by waiver of
interest, penal interest and penalty on the Sales Tax dues up to the
cut off date i.e. 17.06.2004 as per the sanctioned scheme and advised
the company to pay Rs.4.22 crores only to Sales Tax Department in two
installments. As per the order, the company has already paid Rs.2.11
crores as the first installment by the year end and the final
installment of an equal amount will be paid as per the schedule i.e. by
June 2014 to Sales Tax Department of Tamilnadu.
dividend
The Directors recommend a dividend at rate (@ 5%) of Re.0.50 paise
(Fifty paise only) per equity Shares of Rs.10/- each for the financial
year ended March 31, 2014. If approved by the Members at the ensuing
Annual General Meeting to be held on 03rd September, 2014, it will be
paid before 02nd October, 2014 to those Members whose names appear in
the Company''s Register of Members and to those persons whose names
appear as Beneficial Owners (as per the details to be furnished by the
Depositories in respect of the shares held in dematerialized form) as
at the close of business hours on 27.08.2014.
directors
Late Dr.P.S.Mani Sundaram was associated with Kothari Sugars and
Chemicals Limited from 19.11.1996. The Board of Directors records its
deep regret on the demise of Dr.P.S.Mani Sundaram and places on record
it''s appreciation of the valuable services rendered by him during his
tenure as a Director of the Company.
Mr.B.H.Kothari, Director is retiring by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment.
Mr.P.S.Balasubramaniam was appointed as a Director in a casual vacancy
on November 08, 2013 arising on account of the sudden demise of
Dr.P.S.Mani Sundaram, Director on October 26, 2013.
The Board of Directors at its meeting held on May 27, 2014 appointed
Mrs.Nina Bhadrashyam Kothari as an Additional Director of the Company
to hold office up to the date of the forthcoming Annual General Meeting
of the Company and she is eligible for appointment as director by the
members.
In accordance with Section 149 and other applicable provisions of the
Companies Act, 2013, your Directors Mr.P.S.Gopalakrishnan,
Mr.V.R.Deenadayalu and Mr.P.S.Balasubramaniam are seeking appointment
as Independent Director for a term of five consecutive years upto 31
March, 2019. Details of the proposal for the appointment of
Mr.P.S.Gopalakrishnan, Mr.V.R.Deenadayalu and Mr.P.S.Balasubramaniam
are mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of the 53rd Annual General Meeting.
Waiving of Remuneration by Mr.B.H.Kothari, Chairman and Managing
Director
Mr.B.H.Kothari, as Chairman & Managing Director was reappointed w.e.f
01.10.2013 to 30.09.2018 by the shareholders on September 06, 2013 with
remuneration. The negative performance of the Sugar Industry due to the
severe drought, low recovery, reduced cane acreage and depressed sugar
prices resulted in low profit for the year 2013-14 and the prospects
for the next year is also not encouraging. In this regard,
Mr.B.H.Kothari announced in the Board Meeting held on 04.02.2014 that
he would waive his remuneration in Kothari Sugars and Chemicals Limited
w.e.f. 01 April 2014 and the Board thanked Mr.B.H.Kothari for his
gesture.
Directors'' Responsibility statement
The Directors confirm:
(i) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) that they have selected such accounting policies and applied them
consistently and made judgements and estimates that are 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 profit of the company
for that period;
(iii) that they 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) that they have prepared the Annual Accounts on a going concern
basis.
corporate Governance
We believe that Corporate Governance is the crux of Shareholder value
creation. Our governance practices along with the Auditor''s Certificate
on its compliance are attached hereto as an Annexure to this report.
cautionary statement
Statements in this Report, particularly those which relate to
Management Discussion and Analysis as describing the Company''s
objectives, projections, estimates and expectations may constitute
''forward looking statements'' within the meaning of applicable laws and
regulations. Actual results might differ materially from those either
expressed or implied in the statement depending on the circumstances.
public deposits
The Company has not accepted any public deposit during the year and
there was no outstanding public deposit any time during the year.
re-appointment of Auditors
M/s.R.Subramanian and Company, Chartered Accountants, Chennai, the
retiring Auditors, are eligible for re-appointment.
cost Audit
Pursuant to section 233B of the Companies Act, 1956 and the MCA General
Circular No.15/2011 dated 11th April 2011 and subject to the approval
of Central Government, the Audit Committee has recommended and the
Board of Directors appointed Mr.K.Suryanarayanan, Practising Cost
Accountant, as Cost Auditor for the year 2014 - 2015.
Filing of Cost Audit Report 2013 - 2014 2012 - 2013
Due Date 27.09.2014 27.09.2013
Actual Date (Target) 25.09.2014 23.09.2013
Cost Auditor Details Mr.K.Suryanarayanan, Mr.K.Suryanarayanan,
M.No.24946,Chennai M.No.24946, Chennai
Audit Qualification in - Nil
Report
Disclosure under Section 217(2A) and 217(1)(e) of the Companies Act,
1956
During the year no employee has drawn salary in excess of the amount
prescribed under Section 217 (2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 as amended.
Information in accordance with Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988 is furnished in ''Annexure I''
subsidiary companies
Pursuant to Ministry of Corporate Affairs (MCA) General Circular
No.2/2011 dated 8th February, 2011 the accounts of the subsidiary
company need not be attached along with the accounts of the holding
company as required by Section 212 of the Companies Act, 1956 upon
fulfilling certain conditions stipulated in the said circular.
Therefore, Annual Accounts of the Subsidiary Company M/s.Kothari
International Trading Limited for the year ended 31st March 2014 is not
attached herewith.
The Annual Accounts of Kothari International Trading Limited,
subsidiary of your company is kept at the registered office for
inspection of members during working hours and the same is also
available on the website of Kothari Sugars & Chemicals Limited.
Acknowledgement
Your Directors thank the Banks, Customers, Debenture Holders, Farmers,
Financial Institutions, Government Authorities, Suppliers and
Shareholders for their continued support. Your directors also place on
record their appreciation for the committed services by the employees
of the Company.
on behalf of the Board
for Kothari sugars and chemicals Limited
Place: Chennai B.H. Kothari
Date: May 27, 2014 Chairman and Managing Director
Mar 31, 2013
To the members
The Directors present the 52nd Annual Report of the Company together
with the Audited Accounts for the year ended March 31, 2013.
The fnancial highlights of the Company for the year are summarised
below.
(Rs. in Lakhs)
Description 2012-13 2011-12
Profit before Interest and Depreciation 4,133.27 3,661.63
Interest 528.74 467.03
Depreciation 1,689.21 1,315.07
Profit Before Tax 1,915.32 1,879.53
Tax Adjustments including Deferred Tax 1,054.00 1,038.22
Profit after Tax 861.32 841.31
Transfer to Debenture Redemption Reserve 75.00 75.00
Transfer to Capital Redemption Reserve 100.00 100.00
Profit after Appropriation 686.32 666.31
Your Directors are pleased to report that the Company has made a profit
after tax of Rs.861.32 Lakhs.
Operations And Performance
Performance
The Gross total income for the fnancial year ended 2012-13 was
Rs.44,090.82 lacs as compared to Rs.32,684.11 lacs during the fnancial
year 2011-12. There was overall increase in sale of sugar which
includes export sales as well as domestic sales due to sustained
demand. However, the net profit has not shown an appreciable increase
due to various factors like drop in recovery percentage, increase in
cane price and lower export of power. The profit after tax was
Rs.861.32 lacs for the fnancial year ended 2012-13 compared to
Rs.841.31 lacs during the fnancial year 2011-12. Division-wise
performance of the company is given below:
A. Sugar
Though the sugar price remained stable through out the year, due to
lower recovery and high input costs, the profit did not increase
substantially.
Kattur unit: The plant at Kattur had crushed 6,04,644 Metric Ton (MTs)
of sugarcane with an average recovery of 9.01% during 2012-13 as
against 5,78,025 MTs during 2011-12 with an average recovery rate of
9.35%. sathamangalam unit: The Plant at Sathamangalam unit had crushed
7,03,911 MTs of sugarcane with an average recovery of 8.83% in 2012-13
as against 5,04,729 MTs in 2011-12 with an average recovery rate of
9.25%.
The increase in cane crushing is mainly due to availability of sugar
cane leading to higher production of Sugar, Bagasse & Molasses which
impacted the value chain positively. Despite the increase in crushing
activity the recovery of sugar has declined due to failure of monsoon
and power cuts. The cane price paid to the farmers for the year was
Rs.2,250 per MT as fxed by Government of Tamilnadu for the sugar season
2012-13 commencing from October 1, 2012. In addition to the cane price
we have also been paying transport subsidy to the farmers for
transporting cane from the felds to the factory.
Your company had taken various measures to improve the quality of sugar
cane and recovery which included chip bud plantation techniques, drip
irrigation, mechanisation of cane harvesting, through cane harvester
and continuously imparting training to the farmers so that both the
farmers and the company would benefit.
Modernisation Of Kattur And Sathamangalam Sugar Units:
Modernisation works were completed as planned in both the units and the
equipments were put into operation from December 2012 in Kattur and
from January 2013 in Sathamangalam. The performance of the equipments
has been good and therefore we could achieve considerable reduction in
the thermal and electrical energy consumption in both the units.
B. Co-Generation
Power exported during the fnancial year 2012-13 at Kattur unit was
12,779 Mwh (Mega Watt Hour) as against 11,369 Mwh during 2011-12 and in
Sathamangalam unit power exported during 2012-13 was 53,653 Mwh as
against 56,720 Mwh during 2011-12. Due to steep increase in cost of
imported coal and lower rate per unit offered by TNEB the coal based
power generation was not continued. This resulted in lower power
generation as compared to the previous year.
C. Distillery
Alcohol production during the fnancial year 2012-13 was 19,486 KLs
(Kilo Litres) as against 18,347 KLs in 2011-12. The demand for alcohol
bythe IMFL(Indian Made Foreign Liquor) units in the State remained
high. Despite high fuctuation in molasses prices, the systematic
planning of our team helped us to procure good molasses at very
competitive prices. Similarly, improved marketing strategy for sale of
ENA has also helped us in getting better average realisation.
Dividend
The Directors do not recommend dividend for this year.
Bifr''s Status:
Your company continues to be under BIFR/AAIFR on account of appeal
pending before AAIFR to determine the cut off date of the sanctioned
scheme which was challenged bythe Sales Tax Department of Tamilnadu and
the appeal is pending for fnal disposal.
Directors
Mr.V.R.Deenadayalu, Director is retiring by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-appointment.
Directors'' Responsibility Statement
The Directors confirm:
(i) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) that they have selected such accounting policies and applied them
consistently and made judgements and estimates that are 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 fnancial year and profit of the company
for that period;
(iii) that they 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) that they have prepared the Annual Accounts on a going concern
basis.
Corporate Governance
The reports of the Corporate Governance together with the Auditor''s
Certificate are attached hereto as an Annexure.
Public Deposits
The Company has not accepted any public deposit during the year and
there was no outstanding public deposit any time during the year.
Re-appointment of Auditors
Mr.R.Subramanian and Company, Chartered Accountants, Chennai, retire at
the forthcoming Annual General Meeting and are eligible for
re-appointment. As required under section 224 of the Companies Act,
1956, the company has obtained from them a confirmation to the effect
that their re-appointment, if made, would be in conformity with the
limits prescribed in the said section.
Cost Audit
Pursuant to section 233B of the Companies Act, 1956,
Mr.K.Suryanarayanan, a Practising Cost Accountant, was re-appointed as
Cost Auditor for the year 2013 - 2014.
Filing of cost Audit Report
2012 - 2013 2011 - 2012
Due Date
27.09.2013 28.02.2013
Actual Date (Target)
25.09.2013 28.01.2013
Cost Auditor Details Mr.K.Suryanarayanan, M.No.24946,
Mr.K.Suryanarayanan, M.No.24946,
Chennai Chennai
Audit Qualification in Report Nil Nil
DISCLOSURE UNDER SECTION 217(2A) AND 217(1)(E) OF THE COMPANIES ACT,
1956
During the year no employee has drawn salary in excess of the amount
prescribed under provision of sub-section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
particulars in the report of Board of Directors) Rules, 1988 is
furnished in Annexure I''
Subsidiary Companies
Pursuant to Ministry of Corporate Affairs (MCA) General Circular
No.2/2011 dated 8th February, 2011 the accounts of the subsidiary
company need not be attached along with the accounts of the holding
company as required by Section 212 of the Companies Act, 1956 upon
fulfilling certain conditions stipulated in the said circular.
Therefore, Annual Accounts of the Subsidiary Company M/s.Kothari
International Trading Limited for the year ended 31st March 2013 is not
attached herewith.
The Annual Accounts of M/s. Kothari International Trading Limited,
subsidiary of your company is kept at the registered office for
inspection of members during working hours and the same is also
available in Kothari Sugars & Chemicals Limited website.
Acknowledgement
Your Directors thankthe Banks, Customers, Debenture Holders, Farmers,
Financial Institutions, Government Authorities, Suppliers and
Shareholders for their continued support. Your directors also place on
record their appreciation for the committed services by the employees
of the Company.
on behalf of the Board
for Kothari sugars and chemicals
limited
Place: Chennai B.h. Kothari
Date: July 26, 2013 Chairman and Managing Director
Mar 31, 2012
The Directors present the 51st Annual Report of the Company together
with the Audited Accounts for the year ended March 31, 2012.
The performance highlights of the Company for the year are summarised
below. Financial Highlights (Rs. In lakhs)
Description 2011-2012 2010-2011
Profit before Interest and Depreciation 3,661.63 3,272.53
Interest 467.03 648.39
Depreciation 1,315.07 1,379.27
Profit Before Tax 1,879.53 1,244.87
Tax Adjustments including
Deferred Tax 1,038.22 487.80
Profit after Tax 841.31 757.07
Transfer to Debenture
Redemption Reserve 75.00 75.00
Transfer to Capital
Redemption Reserve 100.00 100.00
Profit after Appropriation 666.31 582.07
Your Directors are pleased to report that the company has made a profit
after tax of Rs. 841.31 Lakhs.
Operations and Performance
Performance
The Gross total income for the financial year ended 2011-12 was Rs.
32,684.11 lacs higher than Rs. 28,115.12 lacs, for the financial year
2010-11. There was overall increase in sale of sugar which includes
export sales as well as local sales due to spurt in domestic demand.
Similarly, there was increase in sale of alcohol. However there was
decrease in power generation owing to higher cost of coal and
consequently less sale of power. The profit after tax was Rs. 841.31
lacs for the financial year ended 2011-12 compared to Rs. 757.07 lacs
for the financial year 2010-11. The Profit before Tax was higher mainly
due to increased sales volume and realisation.
Segment-wise performance of the company is given below:
a. Sugar
During the financial year 2011-12 the sugar prices remained relatively
stable which resulted in higher profits compared to financial year
2010-11. Performances of our two sugar units were as under.
Kattur Unit: The plant at Kattur had crushed 578025 Metric Ton (MTs) of
sugarcane with an average recovery of 9.35% during 2011-12 as against
501809 MTs during 2010-11 with an average recovery rate of 9.03%.
Sathamangalam Unit: The Plant at Sathamangalam unit had crushed 504729
MTs of sugarcane with a average recovery of 9.25% in 2011-12 as against
176846 MTs in 2010-11 with a average recovery rate of 8.86%.
The increase in the cane crushing is mainly due to availability of
sugar cane leading to higher production of Sugar, Bagasse & Molasses
which impacted the value chain positively.
Your company had taken various measures to improve the quality of sugar
cane and sugar yield levels which included chip bud plantation
techniques, drip irrigation and mechanisation of cane harvesting
through cane harvester so that the stakeholders in the business i.e.
the farmers and the company would benefit.
b. Co-generation
Power exported during the financial year 2011-12 at Kattur unit was
11369 Mwh (Mega Watt Hour) as against 11752 Mwh of power during
2010-11. At Sathamangalam unit power exported was 56720 Mwh during
2011-12 as against 120980 Mwh during 2010-11. Due to steep increase in
cost of imported coal and lower rate per unit offered by Govt.of
Tamilnadu and Power trading corporation, the coal based power
generation was dis-continued. This resulted in lower power generation
as compared to the previous year.
c. Distillery
Alcohol production during the financial year 2011-12 was 18347 Kilo
Litres (KL's) as against 16135 KLs in 2010-11. The demand for alcohol
by the IMFL (Indian Made Foreign Liquor) units in the State remained
high and supported the marketing efforts of the Company. The Ethanol
blending programme of the Central Government has not been implemented
in the State so far, since the State Government has not accorded
permission for supply of Ethanol to the oil Companies as they perceived
a shortfall of Alcohol to the potable sector. Despite high fluctuation
in molasses prices, systematic planning helped us to procure a good
quantity of molasses at very competitive prices. Similarly, on the
marketing strategy, the sale of ENA has helped in getting a better
average realisation.
Dividend
The Directors do not recommend dividend for this year.
Directors
Dr.P.S. Mani Sundaram, Director is retiring by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-appointment.
Directors' Responsibility Statement
The Directors confirm:
(i) That in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) That they have selected such accounting policies and applied them
consistently and made judgements and estimates that are 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 profit of the company
for that period;
(iii) That they 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) That they have prepared the Annual Accounts on a going concern
basis.
Corporate Governance
The reports of the Corporate Governance together with the Auditor's
Certificate are attached hereto as an Annexure.
Public Deposits
The Company has not accepted any public deposit during the year and
there was no outstanding public deposit any time during the year.
Re-appointment of Auditors
M/s.R.Subramanian and Company, Chartered Accountants, Chennai, retire
at the forthcoming Annual General Meeting and are eligible for
re-appointment. As required under section 224 of the Companies Act,
1956, the company has obtained from them a confirmation to the effect
that their re-appointment, if made, would be in conformity with the
limits prescribed in the said section.
Cost Audit
Pursuant to section 233B of the Companies Act, 1956,
Mr.K.Suryanarayanan, a Practising Cost Accountant, was appointed as
Cost Auditor for the year 2012-2013.
Filing of Cost Audit 2011-2012 2010-2011
Due Date 31.12.2012 27.09.2011
Actual Date (Target) 13.09.2011
30.11.2012
Cost Auditor Details Mr.K.Suryanarayanan, Mr.K.Suryanara-
M.No.24946, yanan,
Chennai M.No.24946,
Chennai
Audit Qualification
in Report - Nil
Disclosure under Section 217(2A) and 217(1)(e) of the Companies Act,
1956
During the year no employee has drawn salary in excess of the amount
prescribed under provisions of sub-section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
particulars in the report of Board of Directors) Rules, 1988 is
furnished in 'Annexure I'.
Subsidiary Companies
Pursuant to Ministry of Corporate Affairs (MCA) General Circular No.
2/2011 dated 8th February, 2011 that the accounts of the subsidiary
company need not be attached along with the accounts of the holding
company as required by Section 212 of the Companies Act, 1956 upon
fulfilling certain conditions stipulated in the said circular, The
Annual Accounts of the Subsidiary Company M/s. Kothari International
Trading Limited for the year ended 31st Mar 2012 is not attached
herewith.
The Annual Accounts of Kothari International Trading Limited,
subsidiary of your company is kept at the registered office for
inspection of members during working hours and the same is also
available in Kothari Sugars & Chemicals Limited, website.
Acknowledgement
Your Directors thank the Banks, Customers, Debenture Holders, Farmers,
Financial Institutions, Government Authorities, Suppliers and
Shareholders for their continued support. Your directors also place on
record their appreciation for the committed services by the employees
of the Company.
On Behalf of the Board
for Kothari Sugars & Chemicals Limited
B.H.Kothari
Chairman and Managing Director
Place : Chennai
Date : August 03, 2012
Mar 31, 2011
To the Members
The Directors present the 50th Annual Report of the Company together
with the Audited Accounts for the year ended March 31, 2011.
The performance highlights of the Company for the year are summarised
below.
Financial Highlights (Rs. In lakhs)
Description 2010 - 2011 2009 - 2010
Profit before Interest 3,272.53 3,807.06
and Depreciation
Interest 648.39 528.70
Depreciation 1,379.27 1,356.76
Profit Before Tax 1,244.87 1,921.60
Tax Adjustments 487.80 782.81
Profit after Tax 757.07 1,138.79
Transfer to Debenture 75.00 75.00
Redemption Reserve
Transfer to Capital
Redemption Reserve 100.00 207.71
Profit after Appropriation 582.07 856.08
Your Directors are pleased to report that the company has made a profit
after tax of Rs.757.07 Lakhs.
Operations and Performance Performance
The Gross total income for the financial year 2010-11 was Rs.28,070.48
lacs as compared to Rs.34,858.81 lacs during the financial year
2009-10. Fall in sugar sales quantity is mainly on account of volatile
sugar selling prices which had affected our Gross total income. The
profit after tax was Rs.757.07 lacs for the financial year 2010-11
compared to Rs.1138.79 lacs during the financial year 2009-10. The PBT
was low mainly due to increase in input cost and high fluctuation in
sugar price coupled with low volumes. Division-wise performance of the
company is given below:
a. Sugar
During the financial year 2010-11 due to volatility in sugar prices the
profitability was lower compared to financial year 2009-10 during which
the sugar prices in domestic market was continuously raising.
Performances of our two sugar units were as under.
Kattur Unit: The plant at Kattur had crushed 5,01,809 Metric Ton (MTs)
of sugarcane with a recovery of 9.03% during 2010-11 as against
7,44,232 MTs during 2009-10 with a recovery rate of 8.90%.
Sathamangalam Unit: The Plant at Sathamangalam unit had crushed
1,76,846 MTs of sugarcane with a recovery of 8.86% in 2010-11 as
against 2,62,748 MTs in 2009-10 with a recovery rate of 8.34%.
The drop in the cane crushing is mainly due to low availability of
sugar cane leading to lower production of Sugar, Bagasse & Molasses
which impacted the value chain. The cane price paid to the farmers for
the year was Rs.1925.00 per MT of sugar cane compared to Central
Government cane price (i.e. Fair and Remunerative Price) of Rs.1391.20
Per MT and State Government., cane price (State Advised Price) of
Rs.1900 per MT. In addition to the cane price we have also paid
transport subsidy for transporting cane from cane growers' field to the
factory, to the farmers. Your company had taken various measures to
improve the quality of sugar cane and sugar yield levels so that both
the stakeholders in the business i.e. the farmers and the company would
benefit.
b. Co-generation
Power exported during the financial year 2010-11 at Kattur unit was
11,752 Mega Watt (MW) as against 18,697 MW of power during 2009-10. At
Sathamangalam unit power exported was 1,23,107 MW during 2010-11 as
against 1,05,755 MW during 2009-10. Considering the high demand for
power in Tamil Nadu and the good price offered, the Co-generation plant
at Sathamangalam had operated and exported 1,06,215 MW of power to the
grid through M/s. Power Trading Corporation.
c. Distillery
Alcohol production during the financial year 2010-11 was 16,135 Kilo
Liters (KLs) as against 10,618 KLs in 2009- 10. The demand for alcohol
by the IMFL units in the state remained high and supported the
marketing efforts of the company. The ethanol blending programme of the
Central Government has not been implemented in the state so far since
the State Government has not accorded permission for supply of ethanol
to the oil companies, as they are yet to perceive a short fall of
alcohol to the potable sector. Despite high fluctuation in molasses
prices, systematic planning of our team helped us to procure the good
molasses at very competitive prices.
Dividend
The Directors do not recommend dividend for this year.
Directors
Mr.P.S.Gopalakrishnan, Director is retiring by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-appointment.
Mr.V.R.Deenadayalu joined the Board in the Casual Vacancy caused by the
resignation of Mr.P.N.Devarajan on April 27, 2009 and he will hold
office till the ensuing Annual General Meeting. The Company has
received Notices from Members proposing the appointment of
Mr.V.R.Deenadayalu as Director of the Company.
Mr.N.Chandramouli, Director resigned from the Board with effect from
20.07.2011. The Board of Directors places on record its appreciation
for the valuable services rendered by him.
Directors' Responsibility Statement The Directors confirm:
(i) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any.
(ii) that they have selected such accounting policies and applied them
consistently and made judgements and estimates that are 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 profit of the company
for that period
(iii) that they 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) that they have prepared the Annual Accounts on a going concern
basis.
Corporate Governance
The reports of the Corporate Governance together with the Auditor's
Certificate are attached hereto as an Annexure.
Public Deposits
The Company has not accepted any public deposit during the year and
there was no outstanding public deposit any time during the year.
Re-appointment of Auditors
Mr.R.Subramanian and Company, Chartered Accountants, Chennai, retire at
the forthcoming Annual General Meeting and are eligible for
re-appointment. As required under Section 224 of the Companies Act,
1956, the company has obtained from them a confirmation to the effect
that their re-appointment, if made, would be in conformity with the
limits prescribed in the said section.
Cost Audit
Pursuant to Section 233B of the Companies Act, 1956,
Mr.K.Suryanarayanan, a Practising Cost Accountant, was appointed as
Cost Auditor for the year 2011 - 2012.
Filing of Cost Audit Report
Particulars 2010 - 2011 2009 - 2010
Due Date 30.09.2011 30.09.2010
Actual Date 25.09.2011 27.09.2010
(Target)
Cost Auditor Mr.K.Suryanarayanan, Mr.K.Suryanarayanan
Details M.No.24946, Chennai M.No.24946, Chennai
Audit
Qualification
in Report NA None
Disclosure under Section 217(2A) and 217(1)(e) of the Companies Act,
1956
During the year no employee has drawn salary in excess of the amount
prescribed under provision of sub-section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
particulars in the report of Board of Directors) Rules, 1988 is
furnished as 'Annexure I' in the next page.
Subsidiary Companies
Ministry of Corporate Affairs (MCA) has recently issued a General
Circular No.2/2011 dated 8th February, 2011 that the accounts of the
subsidiary company need not be attached along with the accounts of the
holding company as required by Section 212 of the Companies Act, 1956
upon fulfilling certain conditions stipulated in the said circular.
Therefore, Annual Accounts of the Subsidiary Company M/s.Kothari
International Trading Limited for the year ended 31st March 2011 is not
attached herewith.
The Annual Accounts of Kothari International Trading Limited,
subsidiary of your company is kept at registered office for inspection
of members during working hours and the same is available in Kothari
Sugars and Chemicals Limited website : www.hckotharigroup.com/kscl
Acknowledgement
Your Directors thank the Banks, Customers, Debenture Holders, Farmers,
Financial Institutions, Government Authorities, Suppliers and
Shareholders for their continued support. Your directors also place on
record their appreciation for the committed services by the employees
of the Company.
On Behalf of the Board
for Kothari Sugars & Chemicals Limited
B.H. Kothari
Chairman and Managing Director
Place : Chennai
Date : July 29, 2011
Mar 31, 2010
The Directors present the 49th Annual Report of the Company together
with the audited statement of accounts for the year ended March 31,
2010.
The performance highlights of the Company for the year are summarised
below.
Financial Highlights (Rs. in Lakhs)
Description 2009-2010 2008-2009
Profit/(Loss) before Interest and
Depreciation 3,807.06 2385.69
Interest 528.70 545.71
Depreciation 1,356.76 1297.67
Profit / (Loss) Before Exceptional Items 1,921.60 542.31
Exceptional items - 427.52
Profit/(Loss) Before Tax 1,921.60 114.79
Tax Adjustments 782.81 13.32
Fringe Benefit Tax - 17.30
Profit / (Loss) after Tax 1,138.79 84.17
Transfer to Debenture Redemption Reserve 75.00 75.00
Transfer to Capital Redemption Reserve 207.71 9.17
Profit / (Loss) after Appropriation 856.08 --
Your Directors are pleased to report that the company has made a profit
after tax of Rs.1138.79 Lakhs.
Operations and Performance
Performance
The CompanyÃs gross income was Rs.34,859 Lakhs for the year ended March
31, 2010 as against Rs.27,568 Lakhs for the last year and profit after
tax of Rs.1,138.79 Lakhs compared to Rs.84.17 Lakhs, of last year.
a. Sugar
Due to lower sugar production during the last sugar season, the sugar
prices in the domestic market was continuously rising and the industry
offered high and remunerative cane price to bring back the farmers to
growing cane.
The Plant at Kattur had crushed 7,44,232 MTs in 2009-10 with a recovery
of 8.90% as against 4,52,491 MTs in 2008-09 with a recovery of 10.27%.
The Plant at Sathamangalam crushed 2,62,748 MTs in 2009-10 with a
recovery of 8.34% as against 5,93,134 MTs in 2008-09 with a recovery of
10.46%.
The company has initiated lot of measures to improve the efficiency of
these units to achieve better yield.
Cane volumes improved despite drought-like conditions prevailed in some
parts of the cane area and Sugar recovery had dropped due to adverse
cane quality. The cane price for sugar season 2009-10 was fixed higher
after negotiation with cane growers @ Rs.1,740 per MT besides,
subsidizing the full transport cost from cane growersà field to the
factory. This is higher than the FRP (Fair and Remunerative Price) of
Rs.1,298.40 per MT and SAP (State Advised Price) of Rs.1,537.40 per MT.
b. Co-generation
Your Company had operated Co-generation plant at Sathamangalam for a
longer period in 2009-10 by using coal and generated more power and
exported 71,761 MWH of power to the grid through a third party, M/s
Power Trading Corporation (PTC).
Total power exported at Kattur was 18,697 MWH during 2009-10 as against
11,455 MWH of power exported during 2008-09. At Sathamangalam, the
power exported was 1,05,755 MWH during 2009-10 as against 51,439 MWH of
power exported during 2008-09.
c. Distillery
Alcohol production during the year 2009-10 was 10,618 KL as against
15,695 KL in 2008-09. The Molasses price being very high, the
production of Rectified Spirit using the old equipment was not viable.
The Distillery operations commenced only in Feb 2010 instead of Dec
2009 and the plant was operated at minimum capacity (50%) till Mar
2010, so that the costlier molasses was retained for consumption in the
new distillation plant for better conversion efficiency and
profitability.
Our Company has modernised the Distillery plant. A distillation plant
of 60 KLPD capacity with MPR Technology has replaced the old
atmospheric distillation plant. With this technology, the Company will
produce superior quality of Alcohol with lesser energy consumption and
losses. The Company will have the flexibility of producing either
Rectified Spirit (RS) or Extra Neutral Alcohol (ENA) in any ratio
depending on the market situation.
Awards
Your Company has been awarded the prestigious ÃNational Energy
Conservation Awardà for the year 2009 in the Sugar sector from the
Ministry of Power. It is noteworthy that your company is the only sugar
company in the country which has been selected for this coveted award.
The company has also received the best co-generation award during 2009
from South Indian Sugar Cane and Sugar Technologists Associations for
the year 2007 - 2008.
Dividend
The Directors do not recommend dividend for this year.
Directors
Dr.P.S.Mani Sundaram, Director is retiring by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-appointment.
Directorsà Responsibility Statement
The Directors confirm:
(i) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) that they have selected such accounting policies and applied them
consistently and made judgements and estimates that are 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 profit of the company
for that period;
(iii) that they 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) that they have prepared the Annual Accounts on a going concern
basis.
Corporate Governance
The reports of the Corporate Governance together with the AuditorÃs
Certificate are attached hereto as an Annexure.
Public Deposits
The Company has not accepted any public deposit during the year and
there was no outstanding public deposit any time during the year.
Re-appointment of Auditors
M/s.R.Subramanian and Company, Chartered Accountants, Chennai, retire
at the forthcoming Annual General Meeting and are eligible for
re-appointment. As required under section 224 of the Companies Act,
1956, the company has obtained from them a confirmation to the effect
that their re-appointment, if made, would be in conformity with the
limits prescribed in the said section.
Cost Auditor
Pursuant to section 233B of the Companies Act, 1956,
Mr.K.Suryanarayanan, a Practising Cost Accountant, was appointed as
Cost Auditor with the approval of Central Government to conduct Cost
Audit of the accounts in respect of the product ÃSugarà for the
financial year 2009-2010.
Disclosure under Section 217(2A) and 217(1)(e) of the Companies Act,
1956
As required under the provision of sub-section (2A) of the Section 217
of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended, particulars of employees are
required to be set out in the annexure to the Directorsà Report.
However, as per provision of Section 219(1)(b)(iv) of the Companies
Act, 1956, the report and the accounts are being sent to all the
shareholders excluding the aforesaid information. Any shareholder
desirous of obtaining the same may write to the Company Secretary.
Information required under Section 217(1)(e) of the Companies Act, 1956
is appended.
Subsidiary Companies
Pursuant to the approval letter No.47/509/2010-CL-III dated 09 June
2010, issued by the Ministry of Corporate Affairs, New Delhi, attaching
the Balance Sheet of the subsidiary company Kothari International
Trading Limited is exempted.
The Annual Accounts of Kothari International Trading Limited,
subsidiary of your company is kept at registered office for inspection
of members during working hours and the same is available in Kothari
Sugars & Chemicals Limited, website.
Acknowledgement
Your Directors thank the Banks, Customers, Debenture Holders, Farmers,
Financial Institutions, Government Authorities, Suppliers and
Shareholders for their continued support. Your Directors also place on
record their appreciation for the committed services by the employees
of the Company.
On Behalf of the Board
for Kothari Sugars & Chemicals Limited
Place : Chennai
Date: August 11, 2010 B.H.Kothari
Chairman and Managing Director