Directors' Report Dear Shareholders, The Board of Directors is pleased to present the Nineteenth Annual Report of your Company together with the audited financial statements for the financial year ended March 31, 2015. OPERATING HIGHLIGHTS: The Company achieved a turnover of Rs. 57,481 Million for the year ended March 31, 2015 as against Rs. 65,771 Million for the previous year. The EBITDA for the year under review stood at Rs. 1,802 Million as compared to Rs. 1,947 Million for the previous year, while the Net Loss stood at Rs. 2,951 Million as compared to Net Loss of Rs. 4,661 Million for the previous year. Analysis of operating performance is covered under Management Discussion and Analysis which forms part of this Report. DIVIDEND: As the Company has incurred loss during the year under review, your Directors have not recommended any dividend for the financial year ended March 31, 2015. TRANSFER TO RESERVES: Debenture Redemption Reserve is created to the extent of 25% of the Non Convertible Debentures (NCDs) equally over the period till maturity of the NCDs, as per the requirements of the applicable laws. During the year the Company has reversed Debenture Redemption Reserve created in the earlier years of Rs. 275 Million on redemption of Rs. 1,100 Million NCDs and created Rs. 125 Million of Debenture Redemption Reserve on outstanding amount of NCDs. The Company has also reversed Rs. 3,166 Million from General Reserve created in the earlier years. FIXED DEPOSITS: Your Company has not accepted any deposits from public / shareholders in accordance with the Sections 73 and 74 of the Companies Act, 2013. DEBENTURES: The Company has not raised long term funds through issuance of Non Convertible Debentures (NCDs) during the period under review, while NCDs aggregating to Rs. 1,100 Million were redeemed. MANAGEMENT DISCUSSION AND ANALYSIS REPORT: The Management Discussion and Analysis Report on the business and operations of the Company is attached to this Report. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS: In accordance with the Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India on Consolidated Financial Statements, attached are the Consolidated Financial Statements, which form part of this Annual Report. These Consolidated Financial Statements provide financial information about your Company and its subsidiaries after elimination of minority interest, as a single entity. A summary of the financial performance of each of the Subsidiary, Associate and Joint Venture companies in the prescribed Form AOC-1 is provided in the Financial Statements. The Company's Policy for Determining Material Subsidiaries may be accessed on the Company's website at the link http:// www.renukasugars.com/en/corporate-governance.html. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and accounts of each of the subsidiaries of the Company are available on the website of the Company www.renukasugars.com. These documents will be made available to the Members for inspection at the Registered Office of the Company on all working days except Saturdays, Sundays and public holidays, between 11.00 a.m. to 1.00 p.m. upto the date of the ensuing Annual General Meeting. The Company will make available the documents of the subsidiaries upon request by any Member of the Company interested in obtaining the same. SHARE CAPITAL: Consequent to the Members' approval, the Board at its meeting held on May 27, 2014 allotted 257,491,592 equity shares to M/s. Wilmar Sugar Holdings Pte. Ltd., a wholly owned subsidiary of Wilmar International Ltd., a part of the Wilmar Group, on preferential basis at a price of Rs. 20.08 per share. Accordingly, the paid-up Share Capital of the Company has increased to Rs. 928,811,242. DIRECTORS & KEY MANAGERIAL PERSONNEL: In accordance with the provisions of Section 152 of the Companies Act, 2013 (the Act), Mr. Vijendra Singh, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. Pursuant to the provisions of Sections 149, 152 & other applicable provisions of the Act & the Listing Agreement, the Board of Directors has re-appointed Mr. Robert Taylor and appointed Mr. Ashit Mallick as Independent Directors of the Company, to hold office for the tenure mentioned in the Notice of the Annual General Meeting of the Company, subject to approval of the Members. Pursuant to the terms of the Joint Venture (JV) Agreement with Wilmar Sugar Holdings Pte Ltd., (WSH) dated February 20, 2014, WSH nominated directorship of Mr. Jean-Luc Bohbot and Mr. Atul Chaturvedi on the Board of Directors of the Company. In view of the same, the Board of Directors has also appointed Mr. Jean-Luc Bohbot and Mr. Atul Chaturvedi, as Additional Directors of the Company to hold office upto the ensuing Annual General Meeting. The Company has received requisite notices from members proposing the appointment of aforesaid Directors. The Company has also received the declarations from the Independent Directors confirming that they satisfy the criteria of independence as prescribed under Section 149(6) of the Act and Clause 49 of the Listing Agreement (Clause 49). The Board recommends the appointment / re-appointment of the aforesaid Directors for members' approval. Brief resume of the Directors seeking appointment / re-appointment, as stipulated under Clause 49 are given in the section on Corporate Governance, which forms part of this Annual Report. Pursuant to the provisions of the Act and Clause 49, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees. The details of programs for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link http://www.renukasugars.com/ en/corporate-governance.html. The policy of the Company on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act and Clause 49 adopted by the Board is appended as Annexure 1 to the Directors' Report. We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company. Mr. Naveen Manghani has been appointed as the Company Secretary and Compliance Officer of the Company w.e.f. August 14, 2015, consequent to the resignation of Mr. D. V. Iyer, the erstwhile Company Secretary. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134(5) of the Companies Act 2013, your Directors state that: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with no material departures; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit/loss of the Company for the year ended on that date; (c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Directors have prepared the annual accounts on a 'going concern' basis; (e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. AUDITORS AND AUDITORS' REPORT: M/s. Ashok Kumar, Prabhashankar and Co., Chartered Accountants, Bangalore, Statutory Auditors (Registration No. 004982S) of the Company hold office until the conclusion of the ensuing Annual General Meeting and are recommended by the Board of Directors for re-appointment. Certificate from the said Auditors has been obtained to the effect that their re-appointment, if made, would be within the limits specified under Section 139 read with Section 141 of the Companies Act, 2013. The Auditors' Report to the Members on the Accounts of the Company for the year ended March 31, 2015 does not contain any qualification. COST AUDITORS: The Board has appointed M/s. B. M. Sharma & Co., Cost Accountants as the Cost Auditors (Registration No. 00219) of the Company to conduct the Cost Audit for the financial year 2014-15, the Cost Audit Report for which will be submitted to the Central Government before the due date. SECRETARIAL AUDITOR: The Board has appointed M/s. Sanjay Dholakia & Associates, Practicing Company Secretary (Membership No. 2655), to conduct the Secretarial Audit for the financial year 2014- 15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith at Annexure 2 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Information as per the Companies Act, 2013 and the rules framed thereunder relating to conservation of energy, technology absorption, foreign exchange earnings and outgo forms part of this Report and is annexed hereto at Annexure 3. CORPORATE GOVERNANCE: Your Company complies with all mandatory requirements as stipulated under Clause 49 of the Listing Agreement. The Report on Corporate Governance along with the Auditors' Certificate on its compliance, and details of memberships of various committees viz., Audit Committee, Nomination & Remuneration / Compensation Committee, CSR Committee etc. forms part of this Report and is annexed hereto. MEETINGS OF THE BOARD: During the year, five meetings of the Board of Directors were held, the details of which are given in the report on Corporate Governance. CEO/CFO CERTIFICATION: As required under Clause 49 of the Listing Agreement, the CEO/CFO Certification is attached with the Annual Report. PARTICULARS OF EMPLOYEES: Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure 4 to this Report. EMPLOYEE STOCK OPTION SCHEME: Your Company has formulated and designed various Employees Stock Option Schemes for employees. During the year, the Company has not granted any fresh stock options to the employees. Disclosure in terms of the SEBI Guidelines, is given in Annexure 5 to the Directors Report. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES: During the year, the Company had not entered into any contract, arrangement or transaction with related parties which could be considered material related party transaction under the provisions of the Companies Act, 2013 or the Listing Agreement. All transactions with related parties were in the ordinary course of business and on an arm's length basis. The Company's Policy on Related Party Transactions may be accessed on the Company's website at the link http:// www.renukasugars.com/en/corporate-governance.html. The details of related party transactions are set out in the notes to the financial statements. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Particulars of loans, guarantees given, securities provided and investments made are provided in the notes to the standalone financial statements. CORPORATE SOCIAL RESPONSIBILITY: Your Company is committed to Corporate Social Responsibility (CSR) by catering to the needs of the weaker sections of the society. Pursuant to the provisions of the Section 135 of the Companies Act, 2013 (the Act), your Company has constituted a CSR Committee of the Board of Directors to monitor the CSR activities of the Company. The details relating to the CSR Committee are described in the Corporate Governance Report forming part of Annual Report. CSR Committee formulated and recommended to the Board, the CSR Policy of the Company and it has been approved by the Board of Directors of the Company. The CSR Policy of the Company may be accessed on the Company's website at the link http://www.renukasugars. com/en/corporate-governance.html. The report on the CSR activities is provided at Annexure 6 to the Directors' Report. EXTRACT OF ANNUAL RETURN: Extract of Annual Return of the Company is annexed herewith as Annexure 7 to this Report. RISK MANAGEMENT & INTERNAL FINANCIAL CONTROLS: The Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to recognise and reduce exposure to risks wherever possible. The Company's risk management policies are based on the philosophy of achieving substantial growth while mitigating and managing risks involved. The Company's internal control systems with reference to the financial statements are adequate and commensurate with the nature of its business and the size and complexity of its operations. Periodic audits and checks are conducted and the controls to prevent, detect and correct any irregularities in the operations have been laid down by the Company. WHISTLEBLOWER POLICY: The Company has in place a Whistleblower Policy / Vigil Mechanism to deal with unethical behavior, victimisation, fraud and other grievances or concerns, if any. The Whistleblower Policy can be accessed on the Company's website http://www.renukasugars.com/en/ corporate-governance.html. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE: As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made thereunder, your Company has constituted Internal Complaints Committees. During the year, there were no complaints received by the Company under the Act. HUMAN RESOURCES (HR): The Company's HR policies and procedures are designed to recruit and retain the best talent to support the operations of your Company and to align the interest of employees with the long term organisational goals. OTHER DISCLOSURES/REPORTING: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. APPRECIATION & ACKNOWLEDGEMENTS: The Board wishes to place on record its gratitude for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors, and cane growers and finally to all its members for the trust and confidence reposed on the Company. The Board further wishes to record its sincere appreciation for the significant contributions made by employees at all levels for their competence, dedication and contribution towards the operations of the Company. For and on behalf of the Board, Vidya Murkumbi Executive Chairperson Mumbai August 24, 2015 |