Dear Members,
Your Board of Directors are pleased to present the 37th Annual General Meeting on the operations of the Company and the Audited Statement of accounts for the year ended 31st March 2024.
FINANCIAL SUMMARY
Rs. in Crores
The financial statements have been prepared in compliance with the Indian Accounting Standards.
PERFORMANCE.
Sugar, Alcohol and Power: During this period under review, the Company was not able to start cane crushing operation in all units as the company has not cleared the cane arrears relating to sugar season 2018-19 and the company was in CIRP Process.
RESERVES
Due to absence of profits in the current year no amount is proposed to be transferred to General Reserves account on account of loss during the year.
DIVIDEND
Due to absence of profits in the current year, the Board of Directors is unable to recommend any dividend for the year 2023-24.
BOARD MEETINGS
During the financial year 2023-24, Three Board Meetings were held on 12.04.2023, and 27.05.2023. Details of Attendance of each director furnished in the report on Corporate Governance in page No.39.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
• Re-appoint of Mrs Visalakshi Periasamy (DIN 00064517) who has crossed the age limit of 75 years, retires by rotation and being eligible offers herself.
• Re-appointment of Mr M Ramalingam (DIN 00278025), as Managing Director of the Company for a further period of five years from 01.04.2023 to 31.03.2028.
• Re-appointment of Dr Palani G Periasamy, (DIN 00081002) as Whole Time Director designated as Executive Chairman with effect from 25.06.2024 to 24.06.2029.
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors state that
In the preparation of the annual accounts, the applicable accounting standards have been followed:
• The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review.
• 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.
• The directors have prepared the annual accounts on a going concern basis.
• 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.
• 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.
DECLARATION OF INDEPENDENT DIRECTORS
The independent directors have submitted their declaration as per Sec. 149 (7) that they continue to meet the criteria of independence as provided in Sec.149 (6).
POLICY ON DIRECTOR APPOINTMENT & REMUNERATION POLICY
The Nomination & Remuneration Committee constituted as per Section 178 of the Companies Act, 2013 has formulated the policy for appointment of Directors, Senior Management etc., and this has been approved by the Board and posted on the Company's Website. The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters are given below.
I. For Executive Directors: The remuneration of the Whole Time/Executive Directors shall comprise of fixed component and a performance linked pay, as may be fixed by the Nomination and Remuneration Committee (NRC) and subsequently approved by the Board of Directors and Members. Performance Linked Pay shall be payable based on the performance of the individual and the Company during the year. Remuneration trend in the industry and in the region, academic background, qualifications, experience and contribution of the individual are to be considered in fixing the remuneration. These Directors are not eligible to receive sitting fees for attending the meetings of the Board and Committees.
II. For Non-Executive Directors: The Non-Executive Directors will be paid sitting fees for attending the Board and Committee Meetings as per the stipulations in the Act, and the Articles of Association of the Company and as recommended by the Nomination and Remuneration Committee. Different scales of sitting fee may be fixed for each category of the directors and type of meeting. However, the fees payable to the Independent Directors and Woman Directors shall not be lower than the fee payable to other categories of directors. In addition to this, the travel and other expenses incurred for attending the meetings are to be met by the Company. The Company shall have no other pecuniary relationship or transactions with any Non- Executive Director.
STATUTORY AUDITORS REPORT
M/s Srivatsan & Associates Chartered Accountants, Chennai (FRN No.014921S), appointed as Statutory Auditors of the Company in the 36th Annual General meeting for the year 2022-23 for a period of 5 years from 01.04.2023 as Statutory Auditors.
The following qualification was mentioned in the audit report as of 31st March 2023 by the statutory auditors.
The following qualification was mentioned in the audit report as of 31st March 2024 by the statutory auditors.
Statement on impact of Audit Qualifications (for Audit Report with modified opinion submitted) along with Audited Financial Results - (Standalone)
Statement on impact of Audit Qualifications for the Financial year ended March 31, 2024 (See Regulation 33/52 of the SEBI (LODR) (Amendment) Regulation, 2016)
II Audit Qualification (each audit qualification)
SECRETARIAL AUDIT
In view of the above and the Company was under the control of the IRP/RP during the CIRP period from 29.07.2021 to 09.05.2024, the Company could not comply with certain reporting as given below.
During the CIRP period, the board/committee meetings of the listed entity were held, The IRP/RP was duly informed about the board/committee meetings. IRP/RP has attended the board/audit committee meetings.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following Observations:
a. As per Regulation 13(3) of SEBI (LODR), The company has not filed the quarterly statement of investor complaints for the quarter ended 30.09.2023 with Stock Exchanges.
b. As per Regulation 13(3) of SEBI (LODR), The Company has not filed the quarterly statement of investor complaints for the quarter ended 31.12.2023 with Stock Exchanges.
c. As per Regulation 31(1) of SEBI (LODR), The Company has not submitted the shareholding pattern for the quarter ended 30.06.2023 to the Stock Exchanges.
d. As per Regulation 31(1) of SEBI (LODR), The Company has not submitted the shareholding pattern for the quarter ended 30.09.2023 to the Stock Exchanges.
e. As per Regulation 31(1) of SEBI (LODR), The Company has not submitted the shareholding pattern for the quarter ended 31.12.2023 to the Stock Exchanges.
f. As per Regulation 27(2) of SEBI (LODR), The Company has not submitted the report on Corporate Governance for the quarter ended 30.09.2023 to the Stock Exchanges.
g. As per Regulation 27(2) of SEBI (LODR), The Company has not submitted the report on Corporate Governance for the quarter ended 31.12.2023 to the Stock Exchanges
h. As per Regulation 30 read with Schedule III Part B Clause 16 of SEBI LODR, The Company has disclosed to the Stock Exchanges, the outcome of meeting of board of directors dated 22.07.2024 in which the financial results were approved for the quarter ended 30.06.2023, 30.09.2023 & 31.12.2023 with delay.
i. As per Regulation 33(3)(a) of SEBI (LODR), The Company has submitted the quarterly financial results for the quarter ended 30.06.2023 to the Stock Exchanges with some delay.
j. As per Regulation 33(3)(a) of SEBI (LODR), The Company has submitted the quarterly financial results for the quarter ended 30.09.2023 to the Stock Exchanges with some delay.
k. As per Regulation 33(3)(a) of SEBI (LODR), The Company has submitted the quarterly financial results for the quarter ended 31.12.2023 to the Stock Exchanges with some delay.
l. As per Regulation 76 of the Depositories Act, 1996, The Company has not submitted the reconciliation of share capital audit report for the quarter ended 30.06.2023 to the Stock Exchanges.
m. As per Regulation 76 of the Depositories Act, 1996, The Company has not submitted the reconciliation of share capital audit report for the quarter ended 30.09.2023 to the Stock Exchanges.
n. As per Regulation 76 of the Depositories Act, 1996, The Company has not submitted the reconciliation of share capital audit report for the quarter ended 31.12.2023 to the Stock Exchanges.
o. As per Regulation 30 read with Schedule III Part B Clause 16 of SEBI LODR, The Company has disclosed to the Stock Exchanges, the outcome of meeting of board of directors dated 22.07.2024 in which the financial results were approved for the quarter ended 30.06.2023, 30.09.2023 & 31.12.2023 with delay
p. The trading window were not closed for the approval of Financial results for the Quarter ended 30.06.2023, 30.09.2023 and 31.12.2023 in the Board Meeting held on 22.07.2024 as required under SEBI (Prohibition of Insider Trading) Regulations, 2015.
q. The Company has not complied with Regulation 3(5) & 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015 with respect to Structured Digital Database.
r. The Annual General Meeting of the Company for the FY ended 31.03.2023 was not held as required u/s 96 of the companies Act during the audit period.
Standards, etc. mentioned above subject to the Section 204 (1) of the Companies Act, 2013 requires that the Secretarial Audit Report is to be attached to the Board's Report. M.Damodaran & Associates LLP Practicing Company Secretaries, Chennai have conducted and submitted the Secretarial Audit Report for the period from 1st April 2023 to 31st March 2024. The Report was placed.
LOANS, GUARANTEES OR INVESTMENTS.
Your Company has not given any loans or provided any guarantees or acquired securities as defined in Section 186 of the Companies Act, 2013.
CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1).
All transactions entered into by the Company with Related Parties were in the Ordinary Course of Business and at arm's Length pricing basis. The Audit Committee granted Omni bus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. There were no materially significant transactions with Related Parties during the financial year 2023-24 which were in conflict with the interest of the Company or which requires the approval of shareholders. Suitable disclosures as required under IND AS-24 have been made in Note. 47 of the Notes to the financial statements. Details of the transactions are provided in Form AOC-2 which is attached as Annexure-III to this Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of the report. All the Banks/Financial Institutions had declared our accounts as nonperforming assets and issued notice to recall the loans.
AUDIT COMMITTEE
The Audit committee consists of the following Directors.
The Audit Committee met TWO times on 12.04.2023 and 27.05.2023. Further meetings could not be held as Liquidation Order was passed on 28.06.2023.
Details of Attendance of each director is furnished in the report on Corporate Governance in Page No. 39.
There were no instances where the Board has not accepted the recommendations of the Audit Committee.
FOREIGN EXCHANGE EARNINGS AND OUT-GO, CONSERVATION OF ENERGY & TECHNOLOGY ABOSORPTION
The details of measures taken for Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in the Annexure.
SUBSIDIARY COMPANIES
The Company does not have any subsidiary or any Associate Company.
RISK MANAGEMENT POLICY
The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) of the Companies Act, 2013 details of the Policy are disclosed in the Company's Website.
At present the Company has not identified any element of risk which may threaten the existence of the Company.
SIGNIFICANT AND MATERIAL ORDERS
1. The Hon'ble National Company Law Tribunal ("NCLT"), Chennai Bench, admitted the Corporate Insolvency Resolution Process ("CIRP") application filed by a financial creditor of the Company and appointed an Interim Resolution Professional ("IRP"), in terms of the Insolvency and Bankruptcy Code, 2016 ("the Code") to manage the affairs of the Company vide order dated July 29, 2021 received by the Company on July 31, 2021.
2. Further as per the e-voting results dated 22nd September 2022, CoC approved the appointment of Mr. Mahalingam Suresh Kumar, Insolvency Professional as Resolution Professional. The appointment was confirmed by Hon'ble NCLT, Chennai vide order IA/1248(CHE)/2022 in IA/976/2019 dated 18th November 2022.
3. The Hon'ble NCLT had passed a liquidation order dated 28th June 2023.
4. Meanwhile, the following lenders (Consortium Banks) viz., Indian Bank, State Bank of India, Central Bank of India, IDBI Limited, The South Indian Bank Ltd, The Federal Bank Ltd, ICICI Bank, Bank of India, Union Bank of India and Indian Overseas Bank had assigned there loan to National Asset Reconstruction Company Limited ("NARCL") vide Joint Assignment Agreement dated 30th September 2023.
5. Considering the settlement arrived between the Promoter and the majority lenders of the Company, the Hon'ble Supreme set aside the Liquidation Process vide its order dated 28117/2023 dated 7thAugust 2023. Further the Hon'ble Supreme Court vide its order 150612/2023 dated 18th March 2024, remanded back to The Hon'ble National Company Law Tribunal (NCLT), Chennai Bench for consideration of withdrawal of IBC process initiated against the Company in terms of Section 12A of IBC, 2016 read with Regulation 30A of the IBBI(CIRP) Regulations., 2016.
6. Based on the settlement proposal submitted by the Promoter U/s 12 A of IBC 2016, the CoC and NCLT has approved the proposal and ordered the withdrawal of the CIRP process and restored the powers of the Board vide its order No. IA (IBC)/825/ CHE/2024 in IBA/976/2019 dated 9th May 2024.
7. A Master Restructuring Agreement (MRA) was entered into between NARCL and India Debt Resolution Limited (IDRSL) - acting a Trustee on behalf of NARCL on 24th May 2024.
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 scope and authority of the Internal Audit function is defined by this Audit Committee. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairman of the Company. the Internal Audit Department monitors and evaluates the efficiency and adequacy of internal financial 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 internal auditor Company undertakes corrective action in their respective areas and thereby strengthens the financial controls. Significant audit observations, if any, and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
DEPOSITS
During the financial year 2023-24 the Company has not accepted deposits as defined in Section 73 and 74 of Chapter V of the Companies Act, 2013. Your Company has complied with the provisions of Section 73 &74 and the rules prescribed there under. Your Company has no unpaid deposits which were due or repayable as on 31st March 2024. Your Company has not defaulted in repayment of the deposits on the due dates. As on the date of this report, there are no deposits and unclaimed deposits.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As per Section 135 of the Companies Act, a Corporate Social Responsibility (CSR) Committee has been formed. CSR policy has been framed and is available on the Website. Members of the Committee are:
However, as the average of the net profits for the last 3 years is negative, no CSR expenditure has been earmarked on this account.
BOARD EVALUATION.
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees as also the Independent Directors.
Criteria for evaluation of the performance of the Independent Directors:
The criteria for evaluation of the performance of Independent Directors include their qualification, experience, competency, knowledge, understanding of respective roles (as Independent Director and as a member of the Committees of which they are Members/ Chairpersons), adherence to Codes and ethics, conduct, attendance and participation in the meetings, etc.
VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
Pursuant to Section 177(9) and 177(10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Obligation and Disclosure Requirement Regulations 2015, the Board of Directors had approved a Policy on Vigil Mechanism/ Whistle Blower and the same is hosted on the website of the Company. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ Employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.
CORPORATE GOVERNANCE
Your Company is in compliance with the Corporate Governance regulations as laid out in SEBI (Listing Obligation and Disclosure Requirement) Regulations
2015. A report on Corporate Governance in line with SEBI prescribed format incorporated in the Listing Obligations and Requirement Regulations, is attached herewith. A certificate from the Practicing Company Secretary on compliance of conditions of Corporate Governance has been obtained and copy enclosed to this report.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employee in the course of day to day business operations of the Company. The Code has been posted on the Company's website www.dharanisugars.com
The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.
PREVENTION OF SEXUAL HARASSMENT
The Company has in place an Anti-Sexual harassment policy in line with the requirements of the Section 4 of the Sexual harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received about sexual harassment. All employees are covered under this policy. Details have been displayed prominently in the work place and also in the Company's Website. No complaints were received during the year 2023-2024.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Annexure attached to the Board's Report
PROHIBITION OF INSIDER TRADING
The Company has adopted a Code of disclosures & a Code of Conduct for Prohibition 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.
Directors of the Board and the designated employees have confirmed compliance with the Code.
ACKNOWLEDGEMENTS
The Board of Directors places on record its appreciation of the support, assistance and co-operation received from the Central Government, Government of Tamil Nadu, various governmental agencies, ICICI Bank Limited, IREDA, the Company's bankers, Indian Bank, State Bank of India, The South Indian Bank Limited, Bank of India, Central Bank of India, The Federal Bank Limited, Union Bank of India, IDBI Bank Ltd and Indian Overseas Bank.
The Board of Directors also wishes to place on record its appreciation for the cane growers, without whose help and support it could not have achieved the progress that has been made so far. With our encouragement and their initiative, we hope for improved cane availability for the ensuing years.
Your Directors are thankful to the employees of the Company for their wholehearted co-operation and unstinted dedication to duty leading to cordial industrial relations during the year under review.
The Board is thankful and grateful for the continuing cooperation to the management from the shareholder's family since inception and is confident that this partnership will sustain forever.