Mar 31, 2022
Your Directors have pleasure in presenting this SEVENTY FIFTH ANNUAL REPORT along with the Audited Statement of Accounts for the year ending 31st March, 2022.
Financial Results: |
(Rupees in lakhs) |
|
Particulars |
This Year |
Last Year |
Sales |
121728.74 |
94972.12 |
Other Income |
3805.04 |
2519.80 |
125533.78 |
97491.92 |
|
Profit for the year |
27048.19 |
19420.43 |
Depreciation |
5714.06 |
5563.31 |
Profit after depreciation |
21334.13 |
13857.12 |
Add: Income Tax Refund received |
3.41 |
369.76 |
Excess Provision of last year Less: |
(3.75) |
(165.67) |
Provision for Current Tax |
5575.00 |
3745.00 |
Provision for Deferred Tax |
(403.69) |
(515.29) |
Profit after Tax |
16169.98 |
10209.39 |
Add: Balance brought forward from last year |
28015.02 |
27805.63 |
Profit available for utilisation |
44185.00 |
38015.02 |
DEDUCTIONS |
||
Equity Dividend for 2020-21 |
2710.71 |
-- |
Transfer to General Reserve |
10000.00 |
10000.00 |
Balance carried forward to next year |
31474.29 |
28015.02 |
TOTAL: |
44185.00 |
38015.02 |
PERFORMANCE:
Your Directors are glad to report that for the year 2021-22, your Company made a Profit of Rs.213.34 Crores (before tax) against a Profit of Rs. 138.57 Crores made last year, which reflect another year of consistent performance. The Net Profit (After Tax) was Rs.161.70Crores against Rs. 102.09 Crores made last year.
Your Directors are glad to recommend a Dividend of Rs. 4/- per Equity Share (Face Value of Rs.2/-) normal dividend Rs. 2/- (100%) and Diamond Jubilee dividend Rs. 2/- (100%) for the year 2021-22. With this Dividend, if approved, your Company would have the distinction of rewarding its Shareholders continuously for the past 6 decades. The outflow towards Dividend payment would be Rs. 54.21 Crores.
The url link of Dividend Distribution Policy is https://theandhrasugars.com/wp-content/uploads/didvidend-distribu-tion-policy.pdf
Authorised and Paid Up Capital:
As on 31.3.2022, the Authorised Capital of the Company is Rs.30.00 Crores and the Paid-up Capital is Rs. 27.11 Crores. 3
With the transfer of Rs. 100.00 Crores during the year under report, the total Reserves as on 31.3.2022 stands at Rs. 893.30 Crores against Rs. 793.30 Crores on 31.3.2021.
REVIEW OF OPERATIONS:SUGAR UNITS:
The Sugar Unit-II crushed in aggregate 278328.660 M.T. of cane during the 2021-22 season against 2,91,037.458 M.T. crushed last year. The crushing operations and cane price paid to cane suppliers for the 2021-22 Season are:
SUGAR UNIT - II TADUVAI |
||
Fin. Year 2021-22 |
Fin. Year 2020-21 |
|
(A) Crushing details: |
||
Total cane crushed (MT) |
278328.660 |
291037.458 |
Total No. of days crushed |
89 |
95 |
Total Sugar produced(MT) |
27773 |
29426 |
Average Recovery |
9.98% |
10.11% |
(B) Cane price: |
||
Fair & Remunerative price (per M.T.) |
2932 |
2870 |
Cane price paid (per M.T)1 |
3246.47 |
3121.53 |
Demand for Caustic Soda is on the rise. Our Major customers in Private and Public Sectors have been consistently lifting their commitments. As a part of ongoing market programme efforts are directed towards widening the customer base. Keeping this in mind, your Company is going for Expansion from existing 500 Tonnes per day to 600 Tonnes per day Membrane Cell Caustic Soda facility at Chemical Complex, Saggonda. This Expansion is based on the latest generation of Environment friendly and Energy-efficient Membrane Cell Technology supplied by M/s. Thyssenkrupp Industrial Solutions India Ltd., a renowned International organization having expertise and experience in establishing Chemical Plants. The Plant is based on the latest 6th Generation Membrane Technology. This process has the lower production cost, simple operations, Energy Efficient & Environmental friendly. Salt and Power constitute two main inputs for production of Caustic Soda. As your Company is already in the production of Caustic Soda, procurement of Salt can be sourced from the existing vendors. Power, another major input, can be availed from 33 MW Coal based Captive Power Plant in operation. Environmental Clearance and Consent for Establishment was obtained by the Company for a capacity of 800 TPD. The estimated Project Cost of Rs.100.00 Crores is being met by internal accruals. The Plant is expected to commence operations by December, 2022.
Sulphuric Acid is widely used in Pharmaceutical, Fertilizer and Water Treatment Industries causing the increase in demand of this product.
Your Company is setting up a 500 TPD Sulphuric Acid Plant at Chemical Complex, Saggonda with an estimated cost of Rs.100.00 Crores being met by internal accurals. Consent for Establishment is obtained. The Plant is expected to commence operations by December, 2022.
Your Company is setting up a Project at J.N. Pharmacity, Parawada, Visakhapatnam in non-SEZ area to manufacture 100 TPD Sodium Hypochlorite. Required statutory approvals are obtained for setting up the Plant. The estimated project cost was about Rs.17.00 Crores. The required raw materials viz., Sodium Hydroxide and Chlorine gas can be supplied from our Chemicals Division, Saggonda.
Sodium Hypochlorite has its applications in Bulk Drugs / Pharmaceuticals, Fine Chemicals, Water treatment and Sea Food Industries. Most of the Civil construction works are completed. All the bought-out components required for this project have already been procured. Fabrication of all the process equipments and main storage tanks are completed. Fabrication and erection of pipe racks / bridges are also completed. Equipment erection was done partly.
We have planned to utilize the site (42.28 acres) completely in a phased manner and we have also obtained CFE from APPCB for setting up a Chlor-alkali project.
Meanwhile, APIIC had issued cancellation orders for the allotted site of 42.28 acres, stating that your Company has not fulfilled the terms and conditions of the original tri-party agreement entered into between APIIC, RPCIL and ASL and the project was not implemented. Your Company has filed a writ petition in the Hon''ble High Court of Andhra Pradesh against APIIC to suspend the site cancellation orders given by APIIC. The High Court has ordered Status Quo and the matter is adjourned for final hearing in the month of October, 2022.
Under the present circumstances, your Company is not pursuing with the construction and commissioning activities of the Sodium Hypochlorite project till the disposal of the matter by the Hon''ble High Court.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2022 Equity Shares representing 54.17% of the Share Capital have been dematerialised. AUDITORS:
M/s K.S. Rao & Co., Chartered Accountants, Hyderabad, the present Auditors were appointed as Statutory Auditors at 70th Annual General Meeting held on 23.09.2017 for a term of five (5) years from the conclusion of the 70th Annual General Meeting till the conclusion of 75th Annual General Meeting. The Audit Committee and the Board at their meeting held on May 28, 2022 approved the appointment of M/s. Brahmayya & Co., Chartered Accountants as Statutory Auditors for a period of five 5 years i.e. from conclusion of the 75th Annual General Meeting till the conclusion of 80th Annual General Meeting. The necessary resolution(s) seeking your approval for their appointment as statutory auditors are included in the notice of the ensuing Annual General Meeting.
Their remuneration for the Financial Year 2022-23 for Rs. 19,00,000/- is being sought for your approval at the ensuing Annual General Meeting.
For the year 2021-2022 M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad were the Cost Auditors of the Company for the Products, which are subject to Cost Audit. For the year ended 2022-23, your Board of Directors have approved the appointment of M/s. Narasimha Murthy & Co., Hyderabad as Cost Auditors and recommended to Shareholders to ratify the remuneration of Rs. 6,00,000/- as fixed by the Board on the recommendation of Audit Committee.
As per the amended provisions of the SEBI Listing Regulations, a Report on Corporate Governance along with Management Discussion and Analysis forming part of the Directors'' Report is annexed.
As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requirement by top 1000 listed Companies based on the Market Capitalization, Business Responsibility Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges and the same is annexed to the Report of Directors.
Audit Committee comprises of Three Non-Whole time, Independent Directors and One Whole-time Director Dr. P Kotaiah, Sri V.S. Raju, Sri PA.Chowdary and Sri P Achuta Ramayya respectively. Dr. P Kotaiah is the Chairman of this Committee.
Sri P Venkateswara Rao is appointed as an Independent Director on 26.04.2021 for a period of five (5) years.
Directors Sri Mullapudi Thimmaraja and Sri P S.R.V.K. Ranga Rao retire by rotation at the ensuring 75th Annual General Meeting and being eligible, offer themselves for re-appointment.
Statements of declaration as per Section 149(6) of the Companies Act, 2013 have been given by the Independent Directors.
Sri P Narendranath Chowdary, Chairman and Managing Director and Sri P.V.S. Viswanadha Kumar, Vice President (Finance) & Addl. Secretary have been designated as Key Managerial Personnel.
COMPLIANCE UNDER COMPANIES ACT, 2013
Pursuant to Sec.134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, your company has complied with the compliance requirement the details of which are enumerated hereunder.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirements of Section 134(1) (c) of the Companies Act, 2013 and on the basis of explanation and compliance certificate given by the executives of the Company, and subject to disclosures in the Annual Accounts and also on the basis of discussions with the Statutory Auditors of the Company from time to time, we state as under:
a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;
b) that the directors selected such accounting policies and applied them consistently and made judgments and estimates that those 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 of the Company for that period;
c) that 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) that the Directors have got prepared the annual accounts on a going concern basis;
e) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
f) that the Directors got devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Board of Directors met 6 times during the financial year 2021-2022 on 26.04.2021,30.06.2021,11.08.2021, 13.11.2021,31.12.2021 and 12.02.2022.
INDEPENDENT DIRECTORS MEETING:
A Meeting of the Independent Directors was held on 25th March, 2022. The Independent Directors have evaluated the performance of the Non-independent Directors, the Board as a whole and Chairman of the Board. The Board was briefed by Lead Independent Director on the deliberations made at the Independent Directors Meeting.
Your Company through a Policy, has in place a familiarisation programme to all the Directors with a view to update them on the Company''s Policies and Procedures. Independent Directors make a periodical visit to plants to keep themselves abreast of the plant operations. Respective Plant Heads interact with the Independent Directors and explain to them about the various processes and operations.
FORMAL ANNUAL EVALUATION OF THE BOARD
The Board evaluated its own performance and that of its Committees and Directors in terms of:
Measured and appropriate contribution by the Directors to the discussions on the Agenda Items,
. Each Director exercising the responsibilities in a bonafide manner. Understanding of the Company''s business, strategic plans and other key issues.
. Special Skills and expertise of each Director contributing to the Board''s overall effectiveness.
. Respecting the confidentiality of the Company''s business information and Board''s deliberations.
. Satisfactory attendance and active participation of each Director at the meetings of the Board and Committee.
The Board members were of the opinion that the Board as a whole and the Directors have performed effectively as per the terms of the above parameters. The respective Committee performed as per its terms of reference.
As a part of Vigil Mechanism, a Whistle Blower Policy has been established and approved by the Board. This Policy envisages reporting of wrong doing or un-ethical activities observed by Employees at any level directly to the Chairman of the Audit Committee or to the Chairman and Managing Director. The matter whenever reported is investigated and if the wrong doer is found guilty, disciplinary action will be initiated depending upon the materiality of the un-ethical doings. During the year under report there has been no instances which required reporting.
NOMINATION AND REMUNERATION COMMITTEE:
As required by the Provisions of the Companies Act, 2013 and Listing Agreement, a Nomination and Remuneration Committee comprising of Independent Directors Sri V.S. Raju (Chairman), Sri PA. Chowdary and Dr. Manjulata was constituted by the Board.
This Nomination and Remuneration Committee has formulated Nomination and Remuneration Policy which has been approved by the Board. This Nomination & Remuneration Policy has laid down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration based on the Company''s size and financial position and trends and practices on remuneration prevailing in the industry. Appointment of Managing Director / Whole-time Director / KMP and Functional Heads are placed before Nomination and Remuneration Committee for its consideration and recommendation to the Board.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As required by the Provisions of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted by the Board of the Company with Sri PNarendranath Chowdary, Managing Director is Chairman of the Committee, Sri Mullapudi Thimmaraja, Joint Managing Director and Sri V.S. Raju, Independent Director are Members of the Committee. This Committee has formulated a CSR Policy which has been approved by the
Board. This Policy envisages CSR Activities to be taken up, amount of expenditure to be incurred and monitoring of CSR Activities from time to time.
This Policy aims to achieve the CSR objectives by undertaking one or more of the activities to be in alignment with Schedule VII of the Companies Act, 2013 either on own or through any Trust / Society or any other recognized implementary Agency.
As per the provisions of Section 135(5) of the Companies Act, 2013, company should spend in every Financial Year at least 2% of the average net profits of the company made during the three immediately preceding Financial Years. In pursuance of its Corporate Social Responsibility Policy, the company gives preference to the local area and areas around it, where it operates or any other permissible location for spending the amount earmarked for Corporate Social Responsibility activities.
Accordingly, for achieving its CSR objectives through implementation of meaningful and sustainable CSR programmes, your Company allocates at least 2% of its average Net Profits calculated as per Section 198 of the Companies Act, 2013, as its Annual CSR Budget in each Financial Year.
From the Annual CSR Budget allocation, a provision is made towards the expenditure to be incurred on identified areas, for undertaking CSR activities on a year to year basis.
Allocation of the Annual Budget for CSR activities in any given year would be as per the provisions of the Companies Act, 2013 and rules made thereunder as amended from time to time. Any unspent / unutilised CSR allocation of a particular year, will be carried forward to the next year, i.e., the CSR budget will be non-lapsable in nature.
As required by Rule 8 of the Companies (CSR Policy) Rules, 2013, a Report on CSR Activities and the amount of expenditure incurred are annexured to this Report.
As required by the Provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 the Board constituted Risk Management Committee on 30.06.2021.
1. Sri Mullapudi Narendranath - Member (Executive Director)
2. Sri P Achuta Ramayya - Member (Executive Director)
3. Sri P Venkateswara Rao - Chairman (Non-Executive and Independent Director)
4. Sri PS.R.V.K. Ranga Rao - Member (Executive Director)
This Risk Management Committee has formulated a Risk Management Policy which has been approved by the Board, which envisages the following
⢠Identification of areas of Risk
⢠Assessing the impact of Risks
⢠Steps taken to mitigate the Risk
The Major Segments of operations of the Company are Sugar and Chlor Alkali.
The major aspects of concern for the Sugar Sector are:
1) Lack of Harvesting Labour
2) Power to operate the irrigation requirements
3) Proper Cane Varieties that give good Cane and Sugar yield that are suitable for mechanical harvesting.
To get around the 1st aspect, the Company has embarked upon locating the right Cane Harvester suited to our Grower Farm sizes. The 2nd aspect is being taken care of by setting up a Solar Powered Pumping System at our R & D Farm so that our Growers could ultimately be provided the right guidance in this aspect. The 3rd aspect is being met by the Cane Breeding Programme undertaken by the Company.
Chlor Alkali segment is power intensive where Power constitute a major input cost. Restricted power supply and increased power cost have become a cause of concern. To mitigate this impact, a Solar Power Plant has been commissioned at Kovvur. At Saggonda a 33 MW Coal Based Captive Power Plant has been commissioned. This would improve the power availability to the Chemical Plants at Saggonda.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has duly complied with the Provisions of Section 186 of the Companies Act, 2013 with regard to Loans, Guarantees or Investments, the details of which, as applicable are provided in the Notes to Balance Sheet.
During the year the Credit Rating Agency ICRA has re-affirmed the credit rating for various facilities as detailed hereunder.
S.No. |
Nature of Facilities |
Rating Affirmed |
1. |
Fund Based Facilities on Long Term Scale (Rs.100 Crores) |
[ICRA] A (Stable) |
2. |
Non- Fund Based Facilities on Short Term Scale (Rs.60 Crores) |
[ICRA] A1 |
3. |
Fixed Deposits Programme (Rs.125 Crores) |
[ICRA] MAA- (Stable) |
The relations with employees continue to be cordial and harmonious during the year under report.
The relations with employees continue to be cordial and harmonious during the year under report. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY:
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act.) An Internal Compliance Committee (ICC) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this Policy. As on the date of this report, there were no complaints received by the ICC.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be accorded high priority.
As required by Section 92 of the Companies Act, 2013 and relevant rules, an Extract of Annual Return in MGT-7 is placed on the Company''s website. You can find the same on www.theandhrasugars.com
There is no transaction with Related Party which requires disclosure under Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014.
As required by Provisions of Companies Act, 2013, Secretarial Audit Report as provided by Nekkanti S R V V Satyanarayana & Co., Hyderabad, Company Secretaries in practice is annexured to this Report.
Information in accordance with the provisions of the Companies Act, 2013, read with the relevant Rules made thereunder, regarding employees is annexed as Annexure "A" forming part of this Report.
RATIO OF REMUNERATION OF EACH DIRECTOR:
Details of ratio of Remuneration of each Director to the median employee''s remuneration is enclosed.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern status of the Company :
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
Information pursuant to Section 134 of the Companies Act, 2013 read with relevant rules is given in Annexure "B" forming part of this Report.
As required by the Companies Act, 2013 the details of Fixed Deposits as on 31.3.2022 is given hereunder.
2021-2022 |
2020-21 |
||
(a) |
Accepted during the year. |
NIL |
NIL |
(b) |
Remained unpaid or unclaimed as at the end of the year. |
25,00,000 |
33,75,000 |
(c) |
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved. |
NO |
NO |
i) |
at the beginning of the year |
NOT APPLICABLE |
NOT APPLICABLE |
ii) |
maximum during the year |
-do- |
-do- |
iii) |
at the end of the year |
-do- |
-do- |
(d) |
Details of deposits which are not in compliance with the requirements of Chapter V of the Act. |
NIL |
NIL |
During the year 11,604 no. of shares of 47 Shareholders have been transferred to I.E.P.F Authority. Unclaimed dividend amounting to Rs 13,26,225/- of 1115 Shareholders for the year 2013-14 has been transferred to I.E.P.F Account.
In accordance with the Accounting standards, consolidated financial statements of the Company and its Subsidiaries form part of the Report and Accounts. These consolidated statements have been prepared on the basis of Audited Results received from the Subsidiary Companies as approved by their respective Boards.
The Accounts of the Subsidiary Companies for the year 2021-22 have not been attached to the Company''s Accounts. However, Shareholders desirous of obtaining the Annual Accounts of the Subsidiaries may obtain them upon request. The Annual Report and the Accounts of the Subsidiary Companies will be kept for inspection at the Company''s Registered Office as well as at the offices of our Subsidiary Companies.
SUBSIDIARIES AND ASSOCIATE:JOCIL LIMITED:
For the Financial Year ending 31.3.2022 your subsidiary Company, JOCIL Ltd., posted a profit of Rs. 957.85 lakhs (before taxation) against Rs. 1542.87 lakhs (before taxation) last year. The Board of Directors of this Company has recommended a Dividend of Rs. 2/- per Share to Shareholders for the Financial Year 2021-22.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
The Company earned a loss of Rs. 5,617/- (before tax) against the profit of Rs. 37.00 lakhs last year. HINDUSTAN ALLIED CHEMICALS LIMITED:
Directors are on the look out for the suitable projects to be taken.
THE ANDHRA PETROCHEMICALS LIMITED:
The Company achieved sales of Rs. 96538.01 lakhs against Rs. 56606.74 lakhs last year and earned profit (before Tax) of Rs. 30107.98 lakhs against Rs. 11794.48 lakhs last year. The Board of Directors of this Company has recommended an Interim Dividend of Rs.1.50/- per Share to Shareholders for the Financial Year 2021-2022.
Your Company conducts a periodical review of the financial and operating controls of the various Units. The Internal Control System of your Company is commensurate with its size and nature of business. The Board has also laid down a policy on Internal Financial Control as required by the provisions of the Companies Act, 2013. The same has been posted on Company''s Website www.theandhrasugars.com
Company''s Equity Shares are listed on National Stock Exchange and Annual Listing Fee for the Financial Year 2022-23 has been paid.
Your Directors wish to place on record their appreciation for the co-operation extended by the State & Central Government authorities, Banks, Farmers and all the concerned associated with the Company in its Business process. They also express their appreciation to the employees at all levels for the successful working of the Company.
For and on behalf of the Board
TANUKU P NARENDRANATH CHOWDARY
28.05.2022 Chairman and Managing Director
Includes Transport Subsidy.
⢠Crushing Operations for the Season 2021-22 have been lower compared to Season 2020-21 due to non-availability of Cane.
⢠Operations of Sugar Unit-I and Sugar Unit-III were suspended for the Crushing Season 2021-22.
⢠To encourage farmers to plant cane, your Company opted to pay a cane price higher than the Fair Remunerative Price fixed by the Government.
During the year under report the Co-generation Unit at Taduvai generated 1,56,88,300 Units of Power. PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the performance of Caustic Soda Division at Saggonda was good. Turnover of Rs.680.80 Crores was achieved, Profit after depreciation achieved this year was Rs. 185.27 Crores against Rs. 86.91 Crores in the last year.
Sulphuric Acid divisions at Kovvur and Saggonda performed impressively by posting a Profit of Rs.46.82 Crores as against 27.84 Crores in the last year.
POWER UNITS:
The Net Power generated at Ramagiri Wind Mills during this year is 12,90,142 Units KWH.
The Net Power generation at the Tamil Nadu Wind Mills during the year under report is 2,77,86,281 Units. This Power is being fed into the Tamil Nadu State Electricity Board grid.
The Power generated by 33 MW Coal Based Captive Power Plant put up by the Company at Saggonda during this year is 17,62,93,000 KWH. The entire Power is being used at our Chemical Plants at Saggonda.
Being 100% captive, operations of 33MW Coal Based Power Plant have been grouped into Chlor-Alkali segment in Segment Reporting.
Mar 31, 2017
To
The Shareholders
Your Directors have pleasure in presenting this SEVENTIETH ANNUAL REPORT along with the audited Statement of Accounts for the year ending 31st March, 2017.
Financial Results:
(Rupees in lakhs)
This Year |
Last Year |
|
Sales |
||
Other Income |
97199.98 |
93098.30 |
2167.05 |
2222.22 |
|
99367.03 |
95320.52 |
|
Profit for the year |
20385.84 |
12149.50 |
Depreciation |
4420.43 |
4789.47 |
Profit after depreciation |
15965.41 |
7360.03 |
Add: Excess provision of Income-tax credited back |
- |
-- |
Add: Income Tax Refund received |
4.54 |
90.41 |
Less: Short/(excess) Provision of Income Tax Less: Exceptional Item (Electricity FSA charges relating to earlier years) |
(187.97) |
|
Provision for Current Tax |
3337.99 |
2750.00 |
Provision for Deferred Tax |
2134.39 |
248.66 |
MAT Credit |
(1553.48) |
-- |
Profit after Tax |
12051.05 |
4639.75 |
Add: Balance brought forward from last year |
16297.63 |
13302.47 |
Less: Other Comprehensive Income |
(888.30) |
1786.38 |
Profit available for appropriation |
27460.38 |
19728.60 |
APPROPRIATIONS |
||
Interim Equity Dividend |
1355.35 |
|
Final Equity Dividend |
813.21 |
|
Tax on Distributed Profits |
262.41 |
|
Transfer to General Reserve |
2000.00 |
1000.00 |
Balance carried forward to next year |
25460.38 |
16297.63 |
PERFORMANCE:
Your Directors are glad to report that for the year 2016-17 your Company made a Profit of Rs. 159.65 Crores (before tax) against a Profit of Rs. 73.60 Crores made last year, which reflect impressive performance. The Net Profit (After Tax) was Rs. 120.51 Crores against Rs. 46.40 Crores made last year. This year has been the most significant one in the annuals of your Company''s history in view of the profit achieved being highest since inception.
DIVIDENDS:
Your Directors recommend a Dividend of Rs. 10 /- per Equity Share i.e., 100% (Face Value Rs.10/-) for the year 2016-17. The outflow towards Dividend payment (including tax on distributable profits) would be Rs.32.33 Crores.
CAPITAL & RESERVES:
Authorized and Paid Up Capital:
As on 31.3.2017, the Authorised Capital of the Company is Rs.30.00 Crores and the Paid-up Capital is Rs. 27.11 Crores.
Reserves:
With the transfer of Rs. 20.00 Crores during the year under report, the total Reserves as on 31.3.2017 stands at Rs.409.48 Crores against Rs. 389.48 Crores on 31.3.2016.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The Sugar Units II and III crushed in aggregate 4,13,655 M.T. of cane during the 2016-17 season against 565781 M.T. crushed by Two Units last year. The crushing operations and cane price paid to cane suppliers for the 201617 Season are:
SUGAR UNIT - II TADUVAI |
SUGAR UNIT - III BHIMADOLE |
|||
Fin. Year 2016-17 |
Fin. Year 2015-16 |
Fin. Year 2016-17 |
Fin. Year 2015-16 |
|
(A) Crushing details: |
||||
Total cane crushed (MT) |
262759 |
362979 |
150896 |
246600 |
Total No. of days crushed |
89 |
110 |
50 |
85 |
Total Sugar produced(MT) |
27190 |
38440.69 |
14438 |
23683.34 |
Average Recovery |
10.50% |
10.59% |
9.70% |
9.60% |
(B) Cane price: |
||||
Fair & Remunerative price (per M.T.) |
2563.78 |
2542.00 |
2324.20 |
2300.00 |
Cane price paid (per M.T)1 |
2896.18 |
2602.00 |
2894.56 |
2360.00 |
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai generated 1,23,92,800 Units of Power. PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the Caustic Soda Division at Saggonda achieved turnover of Rs.429.95 Crores. The Profit after depreciation achieved this year was higher at Rs.122.53 Crores against Rs. 77.56 Crores last year. Aspirin Division also made a profit of Rs.9.09 Crores as against 4.04 Crores.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during this year is Units 20,25,074.
The Power generation at the Tamil Nadu Wind Mills during the year under report is 3,33,85,481 Units. This Power is being fed into the Tamil Nadu State Electricity Board grid.
PROJECTS:
During the Year under report, your Company commissioned a 33 MW Coal Based Captive Generation Plant at Saggonda. Power generated will be utilized by the Chemical Plants located at Saggonda.
Your Company is operating a 400 TPD Caustic Soda Plant at Saggonda. Keeping in view the increasing requirement of the end user industry, a 100 TPD Caustic Soda Plant is being set up at Saggonda. The proposed 100 TPD Plant is based on the latest 6th Generation Membrane Technology. This process has the lower production cost, simple operations, Energy Efficient & Environmental friendly.
Salt and Power constitute two main inputs for production of Caustic Soda. The Salt requirement will be sourced from the existing vendors. Power needed will be available from the 33 MW Captive Power Plant that has been set up on site at Saggonda. The total cost of this Plant is estimated to be Rs.80.00 Crores which will be met by Internal Accruals. With this expansion, the total capacity of Caustic Soda Plant would be 500 TPD.
The existing 300 TPD Hydrochloric Acid Plant is being expanded to 800 TPD in order to utilize Chlorine that will become available from the Caustic Soda Plant.
A 100 TPD Sodium Hypochlorite Plant is being set up at Jawaharlal Nehru Pharmacity at Parawada near Visakhapatnam. The two major Raw Materials, Sodium Hydroxide and Chlorine gas required for the production of this product will be sourced from our Plants at Saggonda. Bought out components have been procured. Major Civil works, Fabrication of process equipment and main storage tanks, main Process Plant & MCC Office Building, Chlorine Cylinders shed, DG Chilling Unit and Stores and maintenance shed, Fabrication and Erection of Pipe racks have been completed. Erection of Process Equipment is in process. This Project is expected to be commissioned during the current Financial Year.
To meet the International clients requirement, capacity of Aspirin Plant has been expanded to 2000 TPA.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2017 Equity Shares representing 45.18% of the Share Capital have been dematerialised.
AUDITORS:
The existing Statutory Auditors M/s Brahmayya & Co., Chartered Accountants, Vijayawada, will retire upon conclusion of the ensuing 70th Annual General Meeting, in compliance with the provisions relating to mandatory rotation of Auditors under the Act.
Based on the recommendations of the Audit Committee and subject to the approval of the Members at the ensuing 70th Annual General Meeting, the Board of Directors have approved the appointment of M/s. K.S.Rao & Co., Chartered Accountants, Hyderabad (Firm Registration No.003109S) as the Statutory Auditor of the Company to hold office from the conclusion of the ensuing 70th Annual General Meeting until the conclusion of the 75th Annual General Meeting.
COST AUDITORS:
For the 2016-17 M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad were the Cost Auditors of the Company for the products, which are subject to Cost Audit. For the year ended 2017-18, your Board of Directors have approved the appointment of Ms. Narasimha Murthy & Co., Hyderabad as Cost Auditors and recommend to Shareholders to ratify the remuneration of Rs.5,00,000/- as fixed by the Board.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on Corporate Governance along with Management Discussion and Analysis forming part of the Directors'' Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges and the same is annexed to the Report of Directors.
AUDIT COMMITTEE:
Audit Committee comprises of 3 non Whole-time, Independent Directors, Sri A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is the Chairman of this Committee.
DIRECTORS AND KMP:
Appointment of Sri Mullapudi Narendranath, Sri Mullapudi Thimmaraja and Sri P. Achuta Ramayya as Joint Managing Directors for a further period of 5 years with effect from 1.1.2018 is being placed for the approval of Shareholders at the ensuing 70th Annual General Meeting.
Directors Sri Mullapudi Narendranath and Sri P. Achuta Ramayya retire by rotation at the ensuring 70th Annual General Meeting and being eligible offer themselves for re-appointment.
Statements of declaration as per Section 149(6) of the Companies Act, 2013 have been given by the Independent Directors.
Dr. B.B. Ramaiah, Chairman & Managing Director, Sri M. Palachandra, Company Secretary and Sri P.V.S. Viswanadha Kumar, General Manager (Finance) & Dy. Secretary has been designated as Key Managerial Personnel.
Compliance under Companies Act, 2013
Pursuant to Sec.134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, your company has complied with the compliance requirement the details of which are enumerated hereunder.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirements of Section 134(1)(c) of the Companies Act, 2013 and on the basis of explanation and compliance certificate given by the executives of the Company, and subject to disclosures in the Annual Accounts and also on the basis of discussions with the Statutory Auditors of the Company from time to time, we state as under :
a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure;
b) that the directors selected such accounting policies and applied them consistently and made judgments and estimates that they 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 of the Company for that period;
c) that 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) that the Directors have got prepared the annual accounts on a going concern basis;
e) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
f) that the Directors got devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
BOARD MEETINGS:
The Board of Directors met 6 times during the financial year 2016-17 on 6-4-2016, 30-5-2016, 27-7-2016, 10-82016, 7-11 -2016 and 4-2-2017.
INDEPENDENT DIRECTORS MEETING:
A Meeting of Independent Directors was held on 22nd May, 2017. The Independent Directors have evaluated the performance of the Non-independent Directors, the Board as a whole and Chairman of the Board. The Board was briefed by Lead Independent Director on the deliberations made at the Independent Directors Meeting.
FAMILARISATION PROGRAMME:
Your Company through a Policy, has in place a familiarization programme to all the Directors with a view to update them on the Company''s Policies and Procedures. Independent Directors make a periodical visit to plants to keep themselves abrest of the plant operations. Respective Plant Heads interact with the Independent Directors and explain to them about the various processes and operations.
FORMAL ANNUAL EVALUATION OF THE BOARD
The Board evaluated its own performance and that of its Committees and Directors in terms of :
Measured and appropriate contribution by the Directors to the discussions on the Agenda Items,
- Each Director exercising the responsibilities in a bonafide manner.
- Understanding of the Company''s business, strategic plans and other key issues.
- Special Skills and expertise of each Director contributing to the Board''s overall effectiveness.
- Respecting the confidentiality of the Company''s business information and Board''s deliberations.
- Satisfactory attendance and active participation of each Director at the meetings of the Board and Committee.
The Board members were of the opinion that the Board as a whole and the Directors have performed effectively as per the terms of the above parameters. The respective Committee performed as per its terms of reference.
VIGIL MECHANISM:
As a part of Vigil Mechanism, a Whistle Blower Policy has been established and approved by the Board. This Policy envisages reporting of wrong doing or un-ethical activities observed by Employees at any level directly to the Chairman of the Audit Committee or to the Chairman & Managing Director. The matter reported is investigated and if the wrong doer is found guilty, disciplinary action will be initiated depending upon the materiality of the un-ethical doings. During the year under report there has been no instances which required reporting.
NOMINATION AND REMUNERATION COMMITTEE :
As required by the Provisions of the Companies Act, 2013 and listing Agreement, a Nomination and Remuneration Committee comprising of Independent Directors Sri V.S. Raju (Chairman), Sri PA.Chowdary and Sri A. Ranga Rao was constituted by the Board.
This Nomination and Remuneration Committee has formulated Nomination and Remuneration Policy which has been approved by the Board. This Nomination & Remuneration Policy has laid down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration based on the Company''s size and financial position and trends and practices on remuneration prevailing in the industry. Appointment of Managing Director / Whole-time Director / KMP and Functional Heads are placed before Nomination and Remuneration Committee for its consideration and recommendation to the Board.
CORPORATE SOCIAL RESPONSIBILITY (CSR) :
As required by the Provisions of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted by the Board of the Company with Dr. B.B.Ramaih, Chairman & Managing Director, Sri PNarendranath Chowdary, Managing Director, Sri Mullapudi Thimmaraja, Joint Managing Director and Sri V.S. Raju, Independent Director as members of the Committee. This Committee has formulated a CSR Policy which has been approved by the Board. This Policy envisages CSR Activities to be taken up, amount of expenditure to be incurred and monitoring of CSR Activities from time to time.
This Policy aims to achieve the CSR objectives by undertaking one or more of the activities to be in alignment with Schedule VII of the Companies Act, 2013 either on a own or through any Trust / Society or any other recognized Agency.
As per the provisions of Section 135(5) of the Companies Act, 2013, company should spend in every Financial Year at least 2% of the average net profits of the company made during the three immediately preceding Financial Years. In pursuance of its Corporate Social Responsibility Policy, the company gives preference to the local area and areas around it, where it operates or any other permissible location for spending the amount earmarked for Corporate Social Responsibility activities.
Accordingly, for achieving its CSR objectives through implementation of meaningful and sustainable CSR programmes, your Company would allocate at least 2% of its average Net Profits calculated as per Section 198 of the Companies Act, 2013, as its Annual CSR Budget in each Financial Year.
From the Annual CSR Budget allocation, a provision is made towards the expenditure to be incurred on identified areas, for undertaking CSR activities on a year to year basis.
Allocation of the Annual Budget for CSR activities in any given year would be as per the provisions of the Companies Act, 2013 and rules made there under as amended from time to time. Any unspent / unutilized CSR allocation of a particular year, will be carried forward to the next year, i.e., the CSR budget will be non-lapsable in nature.
As required by Rule 8 of the Companies (CSR Policy) Rules, 2013, a Report on CSR Activities and the amount of expenditure incurred are annexure to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :
The Company has duly complied with the Provisions of Section 186 of the Companies Act, 2013 with regard to Loans, Guarantees or Investments, the details of which, as applicable are provided in the Notes to Balance Sheet.
RISK MANAGEMENT POLICY:
The company has framed a Risk Management Policy which envisages the following
- Identification of areas of Risk
- Assessing the impact of Risks
- Steps taken to mitigating the Risk
The Major Segments of operations of the Company are Sugar and Chlor Alkali.
The major aspects of concern for the Sugar Sector are:
1) Lack of Harvesting Labour
2) Power to operate the irrigation requirements
3) Proper Cane Varieties that give good Cane and Sugar yield and that are suitable for mechanical harvesting.
To get around the 1st aspect, the Company has embarked upon locating the right Cane Harvester suited to our Grower Farm sizes. The 2nd aspect is being taken care of by setting up a Solar Powered Pumping System at our R & D Farm so that our Growers could ultimately be provided the right guidance in this aspect. The 3rd aspect is being met by the Cane Breeding Programme undertaken by the Company.
Chlor Alkali segment is power intensive where Power constitute a major input cost. Restricted power supply and increased power cost have become a cause of concern. To mitigate this impact, a Solar Power Plant has been commissioned at Kovvur. At Saggonda a 33 MW Coal Based Power Plant has been commissioned. This would improve the power availability to the Chemical Plants at Saggonda.
INDUSTRIAL RELATIONS:
The relations with your Company''s employees continue to be cordial and harmonious during the year under report. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY:
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act.) An Internal Compliance Committee (ICC) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this Policy. As on the date of this report, there were no complaints received by the ICC.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be accorded high priority.
EXTRACT OF ANNUAL RETURN :
As required by Section 92 (3) of the Companies Act, 2013 and relevant rules, an Extract of Annual Return in MGT9 is annexured as a part of this Annual Report.
RELATED PARTY TRANSACTIONS:
There is no transaction with Related Party which requires disclosure under Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014.
SECRETARIAL AUDIT REPORT :
As required by Provisions of Companies Act, 2013, Secretarial Audit Report has provided by Nekkanti SRVV Satyanarayana & Co., Hyderabad, Company Secretaries in practice is annexured to this Report.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of the Companies Act, 2013, read with the relevant Rules made there under, regarding employees is annexed as Annexure "A" forming part of this Report.
RATIO OF REMUNERATION OF EACH DIRECTOR :
Details of ratio of Remuneration of each Director to the median employees remuneration is enclosed.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern status of the Company
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
Information pursuant to Section 134 of the Companies Act, 2013 read with relevant rules is given in Annexure "B" forming part of this Report.
FIXED DEPOSITS:
As required by the Companies Act, 2013 the details of Fixed Deposits as on 31.3.2017 is given hereunder.
2016-17 |
2015-16 |
||
(a) |
Accepted during the year. |
21,69,20,000 |
39,55,65,000 |
(b) |
Remained unpaid or unclaimed as at the end of the year. |
48,60,000 |
52,95,000 |
(c) |
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved. |
NO |
NO |
i) |
at the beginning of the year |
NOT APPLICABLE |
NOT APPLICABLE |
ii) |
maximum during the year |
-do- |
-do- |
iii) |
at the end of the year |
-do- |
-do- |
(d) |
Details of deposits which are not in compliance with the requirements of Chapter V of the Act. |
NIL |
NIL |
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting standards, consolidated financial statements of the Company and its Subsidiaries form part of the Report and Accounts. These consolidated statements have been prepared on the basis of audited results received from the Subsidiary Companies as approved by their respective Boards.
The Accounts of the Subsidiary Companies for the year 2016-17 have not been attached to the Company''s Accounts. However, Shareholders desirous of obtaining the Annual Accounts of the Subsidiaries may obtain them upon request. The Annual Report and the Accounts of the Subsidiary Companies will be kept for inspection at the Company''s Registered Office as well as at the offices of your Subsidiary Companies.
SUBSIDIARIES AND ASSOCIATE:
JOCIL LIMITED:
For the Financial Year ending 31.3.2017 your subsidiary Company, JOCIL Ltd., posted a profit of Rs.1018.61 lakhs (before taxation) against Rs. 2729.72 lakhs (before taxation) last year. Board of Directors of this Company has recommended a Dividend of Rs.3/- per Share to Shareholders for the Financial Year 2016-17.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
The Company incurred a loss (before Tax) of Rs.71.46 lakhs against the loss of Rs. 59.90 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the lookout for a suitable project to be taken up by the Company.
THE ANDHRA PETROCHEMICALS LIMITED:
The Company achieved sales of Rs.37043.04 lakhs against Rs. 37580.83 lakhs and incurred a loss (before Tax) of Rs. 1090.47 lakhs against the loss of Rs. 2630.43 lakhs last year.
INTERNAL CONTROL SYSTEM:
Your Company conducts a review of the financial and operating controls of the various Units. The Internal Control System of your Company is commensurate with its size and nature of business. The Board has also laid down a policy on Internal Financial Control as required by the provisions of the Companies Act, 2013. The same has been posted on Company''s Website.
LISTING ON STOCK EXCHANGE:
Company''s Equity Shares are listed on National Stock Exchange and Annual Listing Fee for the Financial Year 2016-17 has been paid.
AWARD
Your Directors are happy to inform that The Institute of Cost Accountants of India (ICMA) has conferred " FIRST PRIZE " to " The Andhra Sugars Limited for Excellence in Cost Management " for the Year 2016 under Private
- Manufacturing - Medium Category.
Your Company has received Certificate of Appreciation from Commissioner of Central Excise and Service Tax in recognition of the best practices and contribution in revenue to the ex-chequer during the year 2016.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the co-operation extended by the State and Central Government authorities, Financial Institutions and Banks. They also express their appreciation to the employees at all levels for the successful working of the Company.
For and on behalf of the Board
TANUKU Dr. B.B.RAMAIAH
28.07.2017 Chairman & Managing Director
Mar 31, 2016
To
The Shareholders
The Directors have pleasure in presenting this SIXTY NINETH ANNUAL REPORT along with the Audited Statement of Accounts for the year ending 31st March, 2016.
Financial Results:
(Rupees in lakhs)
This Year |
Last Year |
|
Sales |
86932.29 |
77853.95 |
Other Income |
1750.68 |
1065.83 |
88682.97 |
78919.78 |
|
Profit for the year |
12082.14 |
4332.59 |
Depreciation |
4310.65 |
3569.06 |
Profit after depreciation |
7771.49 |
763.53 |
Add: Excess provision of Income-tax credited back |
187.97 |
(12.00) |
Add: Income Tax Refund received |
90.41 |
-- |
Less: Short Provision of Income Tax |
- |
-- |
Less: Exceptional Item (Electricity FSA charges relating to earlier years) |
- |
-- |
8049.87 |
775.53 |
|
Provision for Current Tax |
2643.66 |
110.00 |
Provision for Deferred Tax |
(175.76) |
434.27 |
MAT Credit |
106.34 |
(106.34) |
Profit after Tax |
5475.63 |
337.60 |
Add: Balance brought forward from last year |
12373.45 |
13264.87 |
Profit available for appropriation |
17849.08 |
13602.47 |
APPROPRIATIONS |
||
Transfer to General Reserve |
1000.00 |
300.00 |
Interim Dividend on Equity Shares at Rs.5 /-per share |
1355.35 |
813.21 |
Tax on distributable profits |
146.60 |
115.81 |
Balance brought forward to next year |
15347.13 |
12373.45 |
17849.08 |
13602.47 |
DIVIDENDS:
A Dividend of Rs. 3/- per Equity Share was paid for the year 2014-15. An Interim Dividend of Rs.5/- per share was paid on 28th March, 2016 involving an outflow of Rs.15.02 Crores (including Tax on Distributable Profits). Your Directors now recommend this Interim Dividend as Final Dividend for the Financial Year 2015-16.
CAPITAL & RESERVES:
Authorised and Paid Up Capital:
As on 31.3.2016, the Authorized Capital of the Company is Rs.30.00 Crores and the Paid-up Capital is Rs. 27.11 Crores.
Reserves:
With the transfer of Rs. 10.00 Crores during the year under report, the total Reserves as on 31.3.2016 stands at Rs.402.53 Crores against Rs. 392.53 Crores on 31.3.2015.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The Sugar Units II and III crushed in aggregate 609579 M.T. of cane during the 2015-16 season against 565781 M.T. crushed by three Units last year. The crushing operations and cane price paid to cane suppliers for the 2014-15 Season are:
SUGAR UNIT - I TANUKU |
SUGAR UNIT - II TADUVAI |
SUGAR U BHIMA |
NIT - III DOLE |
|||
Fin. Year 2015-16 |
Fin. Year 2014-15 |
Fin. Year 2015-16 |
Fin. Year 2014-15 |
Fin. Year 2015-16 |
Fin. Year 2014-15 |
|
(A) Crushing details: |
||||||
Total cane crushed (MT) |
-- |
140761 |
362979 |
291534 |
246600 |
133486 |
Total No. of days crushed |
- |
69 |
110 |
88 |
85 |
66 |
Total Sugar produced(MT) |
-- |
12952.50 |
38440.69 |
30946 |
23683.34 |
12562.50 |
Average Recovery |
% |
8.70% |
10.59% |
10.50% |
9.60% |
8.70% |
(B) Cane price: |
||||||
Fair & Remunerative price (per M.T.) |
-- |
2200.00 |
2542.00 |
2469.12 |
2300.00 |
2200.00 |
Cane price paid (per M.T)1 |
-- |
2350.00 |
2602.00 |
2530.00 |
2360.00 |
2350.00 |
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai generated 2,01,14,150 Units of Power against 1,31,30,300 Units generated last year.
PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the Caustic Soda Division at Saggonda achieved a turnover of Rs.376.50 Crores compared to Rs. 370.11 Crores achieved last year. The Profit after depreciation achieved this year was higher at Rs.77.47 Crores against Rs. 62.12 Crores last year.
Aspirin Division also made a profit of Rs.440.80 lakhs due to export activites.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during the year is Units 18,28,182 against 22,86,500 Units generated last year.
The Power generation at the Tamil Nadu Wind Mills during the year under report is 1,84,29,228 Units against 2,31,02,512 Units of last year. This Power is being fed into the Tamil Nadu State Electricity Board grid.
PROJECTS:
Your Company continues to focus its strategy on expansion and diversification programme.
Your company is setting up a project at J.N.Pharmacity, Parawada, Visakhapatnam in Non-Sez area to manufacture 100 TPD Sodium Hypochlorite. The estimated project cost is about Rs.10 crores. The important raw materials required are Sodium Hydroxide and Chlorine gas, which can be supplied from our Chemicals Division, Saggonda. Most of the civil construction works are completed. All the bought-out components required for this project have already been procured. Fabrication of all the process equipments and main storage tanks are completed. Construction of main process plant building, office building, chlorine cylinder shed, MCC building, D.G. set shed, Chilling unit shed and Stores & Maintenance shed are completed. Fabrication and erection of pipe racks / bridges are also completed. Fabrication and erection of storage tanks in tank farm area and main process plant equipment are in progress.
It is expected to complete the project by the end of October, 2016.
An Energy Efficient Caustic Soda plant is in operation at Saggonda.
Power is an essential input for your Company''s Chlor Alkali Plants. To ensure required Power for operations, your Company is implementing a 33 MW Coal Based Power Plant at Saggonda. Erection of Boiler, Electro Static Precipitation, Coal Handling Plant, Air Cooled condensers and other works are in progress. Around 70% of Civil Works have been completed. 132 KV Switchyards and Transmission works have been received and its erection work is in progress. 33 MW Steam Turbine has arrived at the site and its erection work is expected to commence. Overall progress is above 40%. The Project cost has been estimated at Rs.200.00 Crores. A Term Loan of Rs.140.00 Crores has been tied up with Andhra Bank (Rs.100.00 Crores) and Axis Bank (Rs.40.00 Crores) and balance Rs.60.00 Crores is being met from internal generation. Barring unforeseen circumstances the commercial operation is expected to commence during the last Quarter of Financial Year 2016-17.
The Power generated from this Power Plant will be utilized for the Chemical Plants located at Saggonda.
During the year under report a Solar Power Plant based on Photovoltaic Technology was in operation. The Power generated by this plant is being utilized in house at Kovvuru.
DEMATERIALISATION OF EQUITY SHARES:
As of 31 st March, 2016 Equity Shares representing 44.63% of the Share Capital have been dematerialized.
AUDITORS:
M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present Auditors were appointed at 67th Annual General Meeting for a period of 3 Financial Years i.e., 2014-15, 2015-16 and 2016-17.
They retire at this Annual General Meeting and offer themselves for re-appointment. Their remuneration for the current Financial Year 2016-17 requires your approval.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed by your Board of Directors, as Cost Auditors of the Company for the products, which are subject to Cost Audit, for the year ended 31-3-2016. The remuneration proposed to be paid to them is being placed for your ratification at the ensuing 69th Annual General Meeting. Cost Auditors Report in respect of Financial Year 2014-15 has been filed with the Ministry of Corporate Affairs within the stipulated due date.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on Corporate Governance along with Management Discussion and Analysis forming part of the Directors'' Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges and the same is annexed to the Report of Directors.
AUDIT COMMITTEE:
Audit Committee comprises of 3 non Whole-time, Independent Directors, Sri A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is the Chairman of this Committee.
DIRECTORS AND KMP:
Appointment of Dr. B. B. Ramaiah as Managing Director (overall Incharge) for a further period of 5 years with effect from 1.11.2016 is being placed for the approval of Shareholders at the ensuing 69th Annual General Meeting.
Directors Sri Mullapudi Thimmaraja and Sri P. S.R.V.K. Ranga Rao retire by rotation at the ensuing 69th Annual General Meeting and being eligible offer themselves for re-appointment.
Independent Directors have given a statement of declaration as per Section 149(6) of the Companies Act, 2013. Dr. B.B. Ramaiah, Chairman & Managing Director, Sri M. Palachandra, Company Secretary and Sri P.V.S. Viswanadha Kumar, General Manager (Finance) & Asst. Secretary had been designated as Key Managerial Personnel.
Compliance under Companies Act, 2013
Pursuant to Sec.134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, your company complied with the compliance requirement the details of which are enumerated hereunder.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirements of Section 134(1)(c) of the Companies Act, 2013 and on the basis of explanation and compliance certificate given by the executives of the Company, and subject to disclosures in the Annual Accounts and also on the basis of discussions with the Statutory Auditors of the Company from time to time, we state as under :
a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;
b) that 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 of the Company for that period;
c) that the directors had 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) that the directors had prepared the annual accounts on a going concern basis;
e) that 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) that 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.
BOARD MEETINGS:
The Board of Directors met 6 times during the financial year 2015-16 on 26-05-2015, 28-07-2015, 8-09-2015, 31-10-2015, 6-02-2016 and 14-03-2016.
INDEPENDENT DIRECTORS MEETING:
A Meeting of Independent Directors was held on 19th April, 2016. The Independent Directors have evaluated the performance of the Non-independent Directors, the Board as a whole and Chairman of the Board. The Board was briefed on the deliberations made at the Independent Directors Meeting.
FAMILARISATION PROGRAMME:
Your Company through a Policy has in place a familiarization programme to all the Directors with a view to update them on the Company''s Policies and Procedures. Independent Directors make a periodical visit to plants to keep themselves barest of the plant operations. Respective Plant Heads interact with the Independent Directors and explain to them about the various process operations.
FORMAL ANNUAL EVALUATION OF THE BOARD
The Board evaluated its own performance and that of its Committees and Directors in terms of :
Measured and appropriate contribution by the Directors to the discussions on the Agenda Items,
- Each Director exercising the responsibilities in a bonafide manner.
- Understanding of the Company''s business, strategic plans and other key issues.
- Special Skills and expertise of each Director contributing to the Board''s overall effectiveness.
- Respecting the confidentiality of the Company''s business information and Board''s deliberations.
- Satisfactory attendance and active participation of each Director at the meetings of the Board and Committee.
The Board members were of the opinion that the Board as a whole and Directors have performed effectively as per the terms of the above parameters. The respective Committee performed as per its terms of reference.
VIGIL MECHANISM:
As a part of Vigil Mechanism, a Whistle Blower Policy has been established and approved by the Board. This Policy envisages reporting of wrong doing or non-ethical activities observed by Employees at any level directly to the Chiarman of the Audit Committee or to the Chairman & Managing Director. The matter reported will be investigated and if the wrong doer is found guilty, a disciplinary action will be initiated depending upon the materiality of the non-ethical doings. During the year under report there has been no such instances which required reporting.
NOMINATION AND REMUNERATION COMMITTEE :
As required by the Provisions of the Companies Act, 2013 and listing Agreement, a Nomination and Remuneration Committee comprising of Independent Directors Sri V.S. Raju (Chairman), Sri P.A.Chowdary and Sri A. Ranga Rao has been constituted by the Board.
This Nomination and Remuneration Committee has formulated Nomination and Remuneration Policy which has been approved by the Board. This Nomination & Remuneration Policy has laid down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration based on the Company''s size and financial position and trends and practices on remuneration prevailing in the industry.
CORPORATE SOCIAL RESPONSIBILITY (CSR) :
As required by the Provisions of the Companies Act, 2015, a Corporate Social Responsibility (CSR) Committee has been constituted by the Board of the Company with Dr. B.B.Ramaih, Chairman & Managing Director, Sri PNarendranath Chowdary, Managing Director, Sri Mullapudi Thimmaraja, Joint Managing Director and Sri V.S. Raju, Independent Director as members of the Committee. This Committee has formulated a CSR Policy which has been approved by the Board. This Policy envisages CSR Activities to be taken up, amount of expenditure to be incurred and monitoring of CSR Activities from time to time.
This Policy aims towards the achievement of CSR objectives by undertaking any one or more of the activities to be in alignment with Schedule VII of the Companies Act, 2015 either on a own or through any Trust / Society or any other recognized Agency.
As per the provisions of Section 135(5) of the Companies Act, 2013, company should spend in every Financial Year at least 2% of the average net profits of the company made during the three immediately preceding Financial Years. In pursuance of its Corporate Social Responsibility Policy, the company gives preference to the local area and areas around it where it operates or any other permissible location for spending the amount earmarked for Corporate Social Responsibility activities.
Accordingly, for achieving its CSR objectives through implementation of meaningful and sustainable CSR programmes, ASL shall allocate at least 2% of its average Net Profits calculated as per Section 198 of the Companies Act, 2013, as its Annual CSR Budget in each Financial Year.
From the Annual CSR Budget allocation, a provision will be made towards the expenditure to be incurred on identified areas, for undertaking CSR activities on a year on year basis.
Allocation of the Annual Budget for CSR activities in any given year shall be as per the provisions of the Companies Act, 2013 and rules made there under as amended from time to time. Any unspent / unutilized CSR allocation of a particular year, will be carried forward to the next year, i.e., the CSR budget will be non-lapsable in nature.
As required by Rule 8 of the Companies (CSR Policy) Rules, 2013, a Report on CSR Activities and the amount of expenditure incurred are annexure to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :
The Company has duly complied with the Provisions of Section 186 of the Companies Act, 2013 with regard to Loans, Guarantees or Investments, the details of which, as applicable are provided in the Notes to Balance Sheet.
RISK MANAGEMENT POLICY:
The company has framed a Risk Management Policy which envisages the following
- Identification of areas of Risk
- Assessing the impact of Risks
- Steps taken to mitigating the Risk
The Major Segments of operations of the Company are Sugar and Chlor Alkali.
The major aspects of concern for the Sugar Sector are:
1) Harvesting Labour
2) Power to operate the irrigation requirements
3) Proper Cane Varieties that give good Cane and Sugar yield and that are suitable for mechanical harvesting.
To get around the 1st aspect, the Company has embarked upon locating the right Cane Harvester suited to our Grower Farm sizes. The 2nd aspect is being taken care of by setting up a Solar Powered Pumping System at our R & D Farm so that our Growers could ultimately be provided the right guidance in this aspect. The 3rd aspect is being met by the Cane Breeding Programme undertaken by the Company.
Chlor Alkali segment is power intensive where Power constitute a major input cost. Restricted power supply and increased power cost have become a cause of concern. To mitigate this impact, a Solar Power Plant has been commissioned at Kovvur. At Saggonda location a coal based Power Plant is being set up. This would improve the power availability to the Chemical Plants.
INDUSTRIAL RELATIONS:
The relations with your Company''s employees continue to be cordial and harmonious during the year under report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY:
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act.) An Internal Compliance Committee (ICC) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this Policy. As on the date of this report, there were no complaints received by the ICC.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be accorded high priority.
EXTRACT OF ANNUAL RETURN :
As required by Section 92 (3) of the Companies Act, 2013 and relevant rules, an Extract of Annual Return in MGT9 is annexure as a part of this Annual Report.
RELATED PARTY TRANSACTIONS:
There is no transaction with Related Party which requires disclosure under Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014.
SECRETARIAL AUDIT REPORT :
As required by Provisions of Companies Act, 2013, Secretarial Audit Report has been provided by Nekkanti SRVV Satyanarayana & Co., Hyderabad, Company Secretaries in practice is annexure to this Report.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of the Companies Act, 2013, read with the relevant Rules made there under, regarding employees is annexed as Annexure "II A" forming part of this Report.
RATIO OF REMUNERATION OF EACH DIRECTOR :
Details of ratio of Remuneration of each Director to the median employees remuneration is enclosed.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern status of the Company
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
Information pursuant to Section 134 of the Companies Act, 2013 read with relevant rules is given in Annexure "II B" forming part of this Report.
FIXED DEPOSITS:
As required by the Companies Act, 2013 the details of Fixed Deposits as on 31.3.2016 is given hereunder.
2015-16 |
2014-15 |
||
(a) |
Accepted during the year. |
39,55,65,000 |
35,79,35,000 |
(b) |
Remained unpaid or unclaimed as at the end of the year. |
52,95,000 |
41,20,000 |
(c) |
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved. |
NO |
NO |
i) ii) iii) |
at the beginning of the year maximum during the year at the end of the year |
NOT APPLICABLE -do--do- |
NOT APPLICABLE -do--do- |
(d) |
Details of deposits which are not in compliance with the requirements of Chapter V of the Act. |
NIL |
NIL |
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting standards, consolidated financial statements of the Company and its Subsidiaries form part of the Report and Accounts. These consolidated statements have been prepared on the basis of audited results received from the Subsidiary Companies as approved by their respective Boards.
The Accounts of the Subsidiary Companies for the year 2015-16 have not been attached to the Company''s Accounts. However, Shareholders desirous of obtaining the Annual Accounts of the Subsidiaries may obtain them upon request. The Annual Report and the Accounts of the Subsidiary Companies will be kept for inspection at the Company''s Registered Office as well as at the offices of your Subsidiary Companies.
SUBSIDIARIES AND ASSOCIATE:
JOCIL LIMITED:
For the Financial Year ending 31.3.2016 your subsidiary Company, JOCIL Ltd., posted a profit of Rs..2713.91 lakhs (before taxation) against Rs. 1967.91 lakhs (before taxation) last year. This Subsidiary Company paid an Interim Dividend of Rs.7/- per Share which is being recommend to the Shareholders as Final Dividend for the Financial Year 2015-16.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
The Company achieved a sales of Rs.92.04 lakhs against Rs. 99.00 lakhs and incurred a loss (before Tax) of Rs.59.90 lakhs against the loss of Rs. 51.11 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the lookout for a suitable project to be taken up by the Company.
THE ANDHRA PETROCHEMICALS LIMITED:
The Company achieved a sales of Rs.33565.83 lakhs against Rs. 14026.17 lakhs and incurred a loss (before Tax) of Rs. 2693.37 lakhs against the loss of Rs. 4749.04 lakhs last year. During the year under report the Plant was shut down over a prolonged period due to non-remunerative selling prices of the product. Hence the company incurred loss.
INTERNAL CONTROL SYSTEM:
Your Company conducts a review of the financial and operating controls of the various Units. The Internal Control System of your Company is commensurate with its size and nature of business. The Board has also laid down a policy on Internal Financial Control as required by the provisions of the Companies Act, 2013. The same has been posted on Company''s Website.
LISTING ON STOCK EXCHANGE:
Company''s Equity Shares are listed on National Stock Exchange and Annual Listing Fee for the Financial Year 2015-16 has been paid.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the co-operation extended by the State and Central Government authorities, Financial Institutions and Banks. They also express their appreciation to the employees at all levels for the successful working of the Company.
For and on behalf of the Board
TANUKU Dr. B.B.RAMAIAH
27.07.2016 Chairman & Managing Director
Mar 31, 2015
The Directors have pleasure in presenting this SIXTY EIGHTH ANNUAL
REPORT along with the Audited Statement of Accounts for the year ending
31st March, 2015.
Financial Results:
(Rupees in lakhs)
This Year Last Year
Sales 77853.95 72616.57
Other Income 1065.83 1300.88
78919.78 73917.45
Profit for the year 4332.59 11948.39
Depreciation 3569.06 4325.93
Profit after depreciation 763.53 7622.46
Add: Excess provision of Income-tax
credited back 12.00 85.30
Add: Income Tax Refund received - 86.96
775.53 7794.72
Provision for Current Tax 110.00 2645.00
Provision for Deferred Tax 434.27 (304.56)
M AT Credit (106.34) -
Profit after Tax 337.60 5454.28
Add: Balance brought forward from last year 13264.87 9836.45
Profit available for appropriation 13602.47 15290.73
APPROPRIATIONS
Transfer to General Reserve 300.00 490.00
Proposed Dividend on Equity Shares at
Rs.3 /-per share 813.21 1355.35
Tax on distributable profits 115.81 180.51
Balance brought forward to next year 12373.45 13264.87
13602.47 15290.73
The Andhra Sugars Limited
DIVIDENDS:
A Dividend of Rs. 5/- per Equity Share was paid for the year 2013-14.
Your Directors recommend a Dividend of Rs.3/- per Equity Share (Rs.10/-
paid up Equity Share) for the year 2014-15. The outflow towards
Dividend payment (including tax on distributable profits) would be
Rs.9.29 Crores. This Dividend, if approved by the Shareholders, will be
paid to all the eligible Shareholders.
CAPITAL & RESERVES:
Authorised and Paid Up Capital:
As on 31.3.2015, the Authorised Capital of the Company is Rs. 30.00
Crores and the Paid-up Capital is Rs. 27.11 Crores.
Reserves:
With the transfer of Rs. 3.00 Crores during the year under report, the
total Reserves as on 31.3.2015 stands at Rs. 528.01 Crores against Rs.
536.52 Crores on 31.3.2014.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The three Sugar Units together crushed 5,65,781 M.T. of cane during the
2014-15 season against 5,71,449 M.T. crushed last year. The crushing
operations and cane price paid to cane suppliers for the 2014-15 season
are:
SUGAR UNIT-I SUGAR UNIT-II SUGAR UNIT-III
TANUKU TADUVAI BHIMADOLE
Fin.
Year Fin.
Year Fin.
Year Fin.
Year Fin.
Year Fin.
Year
2014
-15
2013
-14 2014
-15 2013
-14 2014
-15 2013
-14
(A) Crushing
details:
Total cane
crushed (MT) 140761 152986 291534 264395 133486 154068
Total No. of
days crushed 69 71 88 89 66 72
Total Sugar
produced(MT) 12952.50 14102 30946 28806 12562.50 15012
Average
Recovery 8.70% 9.12% 10.50% 10.66% 8.70% 9.27%
(B) Cane
price:
Fair & Remun
erative
price (per
M.T.) 2200.00 2100.00 2469.12 2323.21 2200.00 2100.00
Cane price
paid (per M.
T)* 2350.00 2250.00 2530.00 2385.00 2350.00 2250.00
- inclusive of an Incentive of Rs.60/- per M.T.
- Cane crush at sugar units I & III was lower compared to the last
season due to lower availability of cane and lower number of days of
cane crush. Cane crushed at Sugar Unit II was higher.
- Recovery achieved at Sugar Unit II was higher compared to Units I and
III.
- Unfavourable weather conditions affected the cane yield per acre
thereby reducing the quantity of cane crush. This also affected the
recovery.
- Due to non availability of harvesting labour and increase in the cost
of hiring the labour, farmers opted for cultivation of other crops.
- To encourage farmers to plant cane, your Company opted to pay a cane
price higher than the "Fair Remunerative Price" fixed by the
Government.
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai
generated 1,31,30,300 Units of Power against 1,50,63,200 Units
generated last year.
PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the Caustic Soda Division at Saggonda made
a turnover of Rs.370.11 Crores compared to Rs. 410.45 Crores made last
year. Profit after depreciation made by this Division this year was
Rs.62.12 Crores against Rs. 82.95 Crores made last year. During the
year under report Power supply from Andhra Pradesh Gas Power
Corporation Limited (APGPCL), a Gas based Power Generating Company, of
which your company is a shareholder, was restricted due to
non-availability of Gas to meet their Power Generating Capacity. This
impacted the performance of Chemical Units as there was a need to
purchase additional Power from Power Exchanges and from State
Electricity Board at a higher tariff.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during the year is Units
22,86,500 against 25,40,290 Units generated last year.
The Power generation at the Tamil Nadu Wind Mills during the year under
report is 2,31,02,512 Units against 2,69,55,509 Units of last year.
This Power is being fed into the Tamil Nadu State Electricity Board
grid.
PROJECTS:
Your Company continues to focus its strategy on expansion and
diversification programme.
An Energy Efficient Caustic Soda plant is in operation at Saggonda.
At the Jawaharlal Nehru Pharmacity, at Parawada, Visakhapatnam, a
Sodium Hypochlorite Plant is being set up. Sodium Hydroxide and
Chlorine Gas are the main raw material for this plant. Sodium Hydroxide
and Chlorine Gas will be sourced internally from our Saggonda plants.
Site development and civil foundation works are in progress. Bought out
components required for this project have been initiated. Fabrication
of all the process equipment and storage tanks has been completed.
Fabrication of the structures for the main process plant is in
progress. Erection of Process Equipment in the main building is
expected to commence shortly.
Sodium Hypochlorite is used in the drug and pharmaceutical industries,
water treatment, paper and chemical industries. Since the plant is
being put up at the Pharmacity, it will have the advantage of catering
to the requirements of user Industries in and around Jawaharlal Nehru
Pharmacity. This project is expected to be commissioned by the end of
2015.
As Power is an essential input for your Company's Chlor Alkali
operations, a 33 MW Coal Based Power Project is being set up at the
Chemical Complex at Saggonda. Required land has been procured.
Foundation Stone has been laid. Public Hearing has been conducted by
the Public Authorities and State Level Impact Assessment authority has
recommended to the Appropriate Authority to issue Environmental
Clearance. Industrial Entrepreneur Memorandum filed has been
acknowledged by the Ministry of Commerce. Orders have been placed for
Boilers, Turbine and Air Cooler Condenser. After thorough deliberations
it was felt to go in for a 33 MW with a view to operate at the optimum
level considering the present demand and availability of power for
captive requirement. Erection and Procurement orders for all works have
been issued. The total cost of the Project has been estimated at
Rs.200.00 Crores. Discussions are on with various Banks to firm up the
available funding for the Project.
The Power generated from this Power Plant will be utilized for the
Chemical Plants located at Saggonda.
During the year under report a Solar Power Plant based on Photovoltaic
Technology has been commissioned. The Power generated by this plant is
being utilized in house at Kovvuru.
After a review of market conditions and considering the implementation
activities of Power project undertaken, setting up of Hydrogen Peroxide
and Chlorinated Paraffins Plants is put on hold for the time being.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2015 Equity Shares representing 44.63% of the Share
Capital have been dematerialised.
AUDITORS:
M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present
Auditors were appointed at the 67th Annual General Meeting for a period
of 3 Financial Years i.e., 2014-15, 2015-16 and 2016-17.
They retire at this Annual General Meeting and offer themselves for
re-appointment which requires ratification of Shareholders. Their
remuneration for the current Financial Year 2015-16 also requires your
approval.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed
by your Board of Directors, as Cost Auditors of the Company for the
products, which are subject to Cost Audit, for the year ended
31-3-2015. Cost Auditors Report and Compliance Report in respect of
Financial Year 2013-14 has been filed with the Ministry of Corporate
Affairs on 25.9.2014 and 24.9.2014 respectively i.e. within the
stipulated due date of 27.9.2014. Their remuneration is being placed
for your ratification at the ensuing 68th Annual General Meeting.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on
Corporate Governance along with Management Discussion and Analysis
forming part of the Directors' Report is annexed. Annexure-I
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied
with the conditions of Corporate Governance as stipulated in the
Listing Agreement with the Stock Exchanges and the same is annexed to
the Report of Directors.
AUDIT COMMITTEE:
Audit Committee comprises of 3 non Whole-time, Independent Directors,
Sri A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is
the Chairman of this Committee.
DIRECTORS AND KMP:
Directors Sri M.Narendranath and Sri P. Achuta Ramayya retire by
rotation at the ensuring 68th Annual General Meeting and being eligible
offer themselves for re-appointment.
As required by the Provisions of the Companies Act, 2013, Sri A. Ranga
Rao, Dr. P.Kotaiah, Sri V.S.Raju, Dr.A.V. Rama Rao, Sri P.A. Chowdary
and Dr. D. Manjulata were appointed as Independent Directors by the
Shareholders at the 67th Annual General Meeting for a period of 5 years
with effect from the conclusion of the 67th Annual General Meeting
i.e., 10-09-2014.
Dr. D. Manjulata was appointed as Director at the 67th Annual General
Meeting on the Board in compliance with the Provisions of the Companies
Act, 2013 and Listing Agreement with regard to the appointment of Woman
Director on the Board.
Independent Directors have given a statement of declaration as per
Section 149(7) of the Companies Act, 2013.
To be in line with provisions of the companies Act, 2013 Dr. B.B.
Ramaiah, Chairman & Managing Director, Sri M. Palachandra, Company
Secretary and Sri P.V.S. Viswanadha Kumar, G.M. (Finance) & Asst.
Secretary has been designated as Key Managerial Personnel.
COMPLIANCE UNDER COMPANIES ACT, 2013:
(Pursuant to Sec.134 of the Companies Act, 2013 read with Companies
(Accounts) Rules, 2014), your company complied with the compliance
requirement the details of which are enumerated hereunder.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirements of Section 134(1)(c) of the Companies Act,
2013 and subject to disclosures in the Annual Accounts and also on the
basis of discussions with the Statutory Auditors of the Company from
time to time, we state as under :
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relating to material departure;
b) that 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 of
the Company for that period;
c) that the directors had 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) that the directors had prepared the annual accounts on a going
concern basis;
e) that 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) that 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.
BOARD MEETINGS:
The Board of Directors met 5 times during the financial year 2014-15 on
26-05-2014, 28-07-2014, 23-08-2014, 01-11-2014 and 31-01-2015.
INDEPENDENT DIRECTORS MEETING:
A Meeting of Independent Directors was held on 26th March, 2015. The
Independent Directors have evaluated the performance of the
Non-independent Directors, the Board as a whole and Chairman of the
Board. The Board was briefed on the deliberations made at the
Independent Directors Meeting.
FAMILARISATION PROGRAMME:
Your Company through a Policy has in place a familiarisation programme
to all the Directors with a view to update them on the Company's
Policies and Procedures. Independent Directors make a periodical visit
to plants to keep themselves abreast of the plant operations.
Respective Plant Heads interact with the Independent Directors and
explain to them about the various process operations. The same has been
posted on Company's website www.theandhrasugars.com
FORMAL ANNUAL EVALUATION OF THE BOARD
The Board evaluated its own performance and that of its Committees and
Directors in terms of :
- Measured and appropriate contribution by the Directors to the
discussions on the Agenda Items,
- Each Director exercising the responsibilities in a bonafide manner.
- Understanding of the Company's business, strategic plans and other
key issues. -Special Skills and expertise of each Director
contributing to the Board's overall effectiveness. -Respecting the
confidentiality of the Company's business information and Board's
deliberations.
- Satisfactory attendance and active participation of each Director at
the meetings of the Board and Committee.
The Board members were of the opinion that the Board as a whole and
Directors have performed effectively as per the terms of the above
parameters. The respective Committee performed as per its terms of
reference.
VIGIL MECHANISM:
As a part of Vigil Mechanism, a Whistle Blower Policy has been
established and approved by the Board. This Policy envisages reporting
of wrong doing or non-ethical activities observed by Employees at any
level directly to the Chiarman of the Audit Committee or to the
Chairman & Managing Director. The matter reported will be investigated
and if the wrong doer is found guilty, a disciplinary action will be
initiated depending upon the materiality of the non-ethical doings.
During the year under report there has been no instances which required
reporting. The same has been posted on Company's website
www.theandhrasugars.com
NOMINATION AND REMUNERATION COMMITTEE :
As required by the Provisions of the Companies Act, 2013 and listing
Agreement, a Nomination and Remuneration Committee has been constituted
by the Board comprising of Independent Directors Sri V.S. Raju
(Chairman), Sri P.A.Chowdary and Sri A. Ranga Rao.
This Nomination and Remuneration Committee has formulated Nomination
and Remuneration Policy which has been approved by the Board. This
Nomination & Remuneration Policy has laid down criteria and terms and
conditions with regard to identifying the persons who are qualified to
become Directors (Executive and Non-Execu- tive) and persons who may be
appointed in Senior Management and Key Managerial positions and to
determine their remuneration based on the Company's size and financial
position and trends and practices on remuneration prevailing in the
industry. The same has been posted on Company's website
www.theandhrasugars.com
CORPORATE SOCIAL RESPONSIBILITY (CSR) :
As required by the Provisions of the Companies Act, 2015, a Corporate
Social Responsibility (CSR) Committee has been constituted by the Board
of the Company with Dr. B.B.Ramaih, Chairman & Managing Director
(Chairman of the Committee), Sri P.Narendranath Chowdary, Managing
Director, Sri M. Thimmaraja, Joint Managing Director and Sri V.S. Raju,
Independent Director as members of the Committee. This Committee has
formulated a CSR Policy which has been approved by the Board. This
Policy envisages CSR Activities to be taken up, amount of expenditure
to be incurred and monitoring of CSR Activities from time to time. The
same has been posted on Company's website www.theandhrasugars.com
This Policy aims towards the achievement of CSR objectives by
undertaking any one or more of the activities to be in alignment with
Schedule VII of the Companies Act, 2015 either on own or through any
Trust / Society or any other recognized Agency.
As per the provisions of Section 135(5) of the Companies Act, 2013,
company should spend in every Financial Year at least 2% of the average
net profits of the company made during the three immediately preceding
Financial Years. In pursuance of its Corporate Social Responsibility
Policy, the company gives preference to the local area and areas around
it where it operates or any other permissible location for spending the
amount earmarked for Corporate Social Responsibility activities.
As required by Rule 8 of the Companies (CSR Policy) Rules, 2013 a
Report on CSR Activities and the amount of expenditure incurred are
annexed to this Report. -Annexure-VI
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :
The Company has duly complied with the Provisions of Section 186 of the
Companies Act, 2013 with regard to Loans, Guarantees or Investments,
the details of which, as applicable, are provided in the Notes to
Balance Sheet.
RISK MANAGEMENT POLICY:
The company has framed a Risk Management Policy which envisages the
following
- Identification of areas of Risk
- Assessing the impact of Risks
- Steps taken to mitigating the Risk
The Major Segments of operations of the Company are Sugar and Chlor
Alkali. The major aspects of concern for the Sugar Sector are:
1) Harvesting Labour
2) Power to operate the irrigation requirements
3) Proper Cane Varieties that give good Cane and Sugar yield and that
are suitable for mechanical harvesting.
To get around the 1st aspect, the Company has embarked upon locating
the right Cane Harvester suited to our Grower Farm sizes. The 2nd
aspect is being taken care of by setting up a Solar Powered Pumping
System at our R & D Farm so that our Growers could ultimately be
provided the right guidance in this aspect. The 3rd aspect is being met
by the Cane Breeding Programme undertaken by the Company.
Chlor Alkali segment is power intensive where Power constitute a major
input cost. Restricted power supply and increased power cost have
become a cause of concern. To mitigate this impact, a Solar Power Plant
has been commissioned at Kovvur. At Saggonda location a 33MW coal based
Power Plant is being set up. This would improve the power availability
to the Chemical Plants.
The above policy has been posted on Company's website
www.theandhrasugars.com
INDUSTRIAL RELATIONS:
The relations with your Company's employees continue to be cordial and
harmonious during the year under report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY:
To be in line with the requirements of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act.)
an Internal Compliance Committee (ICC) has been set up to redress the
com- plaints received regarding sexual harassment. All employees are
covered under this Policy. As on the date of this report, there were no
complaints received by the ICC.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be
accorded high priority.
EXTRACT OF ANNUAL RETURN :
As required by Section 92 (3) of the Companies Act, 2013 and relevant
rules, an Extract of Annual Return in MGT9 is annexured as a part of
this Annual Report. -Annexure-III
RELATED PARTY TRANSACTIONS:
As per the provisions of Clause 49 of Listing Agreement, your Company
has established a policy on materiality of Related Part Transactions
and on dealing with Related Parties.
The policy on Related Party Transactions as approved by the Board of
Directors is available on the website of the Company
www.theandhrasugars.com
All transactions entered with Related Parties for the year under review
were on Arm's length basis and in the ordinary course of Business.
All Related Party Transactions are placed before the Audit Committee
and the Board for approval. Omnibus approval was granted by the Audit
Committee on yearly basis for transactions which are repetative nature.
A statement giving details of all Related Party Transactions are placed
before the Audit Committee and the Board for review and ratification on
quarterly basis.
SECRETARIAL AUDIT REPORT :
As required by the Provisions of the Companies Act, 2013, Secretarial
Audit Report provided by Nekkanti SRVV Satyanarayana & Co., Hyderabad,
Company Secretaries in practice is annexed to this Report. Annexure-IV
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions the Companies Act, 2013,
read with the relevant rules made thereunder, regarding employee is
given hereunder.
Name : P. Narendranath
Chowdary Relationship with
other Directors : Brother of P.Achuta
Ramayya
Desig
nation : Managing
Director Type of Employment : Regular
Qualifi
cation : B.Sc., Particulars of last
Age : 67 Employment : 2 1/2 years as Director
Experi
ence
(Years): 48 The Andhra Sugars Ltd.,
Date of
Commen- 12.01.1976
cement
of
Employ
ment :
Gross
Remune
ration : Rs. 63,75,809/-
RATIO OF REMUNERATION OF EACH DIRECTOR :
Details of ratio of Remuneration of each Director to the median
employees remuneration is enclosed. Annexure-V
Significant and Material Orders Passed by the Regulators or Courts or
Tribunals impacting the Going Concern status of the Company
There are no significant and material orders passed by the Regulators
or Courts or Tribunals which would impact the going concern status of
the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
Information pursuant to Section 134 of the Companies Act, 2013 read
with relevant rules forming part of this Report is given in Annexure-II
FIXED DEPOSITS:
As required by the Companies Act, 2013 the details of Fixed Deposits as
on 31.3.2015 is given hereunder.
2014-15 2013-14
(a) Accepted during the year. 502905000 357935000
(b) Remained unpaid or unclaimed as at the
end of the year. 2645000 4120000
(c) Whether there has been any default in
repayment of deposits or payment of interest
thereon during the year NO NO
and if so, number of such cases and the
total amount involved.
i) at the beginning of the year NOT
APPLICABLE NOT
APPLICABLE
ii) maximum during the year -do- -do-
iii) at the end of the year -do- -do-
(d) Details of deposits which are not
in compliance
with the requirements of Chapter V of the Act. NIL NIL
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting Standards, consolidated financial
statements of the Company and its Subsidiaries form part of the Report
and Accounts. These consolidated statements have been prepared on the
basis of audited results received from the Subsidiary Companies as
approved by their respective Boards.
The Accounts of the Subsidiary Companies for the year 2014-15 have not
been attached to the Company's Accounts. However, Shareholders desirous
of obtaining the Annual Accounts of the Subsidiaries may obtain them
upon request. The Annual Report and the Accounts of the Subsidiary
Companies will be kept for inspection at the Company's Registered
Office as well as at the offices of your Subsidiary Companies and are
also placed on Company's website www.theandhrasugars.com
SUBSIDIARIES AND ASSOCIATE:
JOCIL LIMITED:
For the Financial Year ending 31.3.2015, your subsidiary Company, JOCIL
Ltd., posted a profit of Rs. 1967.91 lakhs (before taxation) against
Rs. 1630.46 lakhs (before taxation) last year. The Board of this
Subsidiary recommended a Dividend of Rs.6/- per share on the Capital of
88,81,150 Equity Shares. Dividend paid last year was Rs.5/- per share.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
The Company achieved a sales of Rs. 99.00 lakhs against Rs. 159.98
lakhs and incurred a loss (before Tax) of Rs.51.11 lakhs against the
loss of Rs. 79.42 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the look out for a suitable project to be taken up
by the Company.
THE ANDHRA PETROCHEMICALS LIMITED: (ASSOCIATE)
The Company achieved a sales of Rs.14026.17 lakhs against Rs. 25929.25
lakhs and incurred a loss (before Tax) of Rs.4749.04 lakhs against the
loss of Rs.3023.99 lakhs last year. During the year under report the
Plant was shut down over a prolonged period due to non-remunerative
selling prices of the product and HUD-HUD cyclone. Hence the company
incurred loss.
INTERNAL CONTROL SYSTEM:
Your Company conducts a review of the financial and operating controls
of the various Units. The Internal Control System of your Company is
commensurate with its size and nature of business. The Board has also
laid down a policy on Internal Financial Control as required by the
provisions of the Companies Act, 2013. The same has been posted on
Company's Website www.theandhrasugars.com
LISTING ON STOCK EXCHANGE:
Company's Equity Shares are listed on National Stock Exchange and
Annual Listing Fee for the Financial Year 2014-15 has been paid.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation extended by the State and Central Government authorities,
Financial Institutions and Banks. They also express their appreciation
to the employees at all levels for the successful working of the
Company.
For and on behalf of the Board
TANUKU Dr. B.B.RAMAIAH
28.07.2015 Chairman & Managing Director
Mar 31, 2014
The Shareholders
The Directors have pleasure in presenting this SIXTY SEVENTH ANNUAL
REPORT along with the Audited Statement of Accounts for the year ending
31st March, 2014.
Financial Results:
(Rupees in lakhs)
This Year Last Year
Sales 72616.57 83200.31
Other Income 1300.88 1373.57
73917.45 84573.88
Profit for the year 11948.39 17820.52
Depreciation 4325.93 4119.29
Profit after depreciation 7622.46 13701.23
Add: Excess provision of
Income Tax credited back 85.30 -
Add: Income Tax Refund received 86.96 7.61
Less: Short Provision
of Income Tax - 72.42
Less: Exceptional Item
(Electricity FSA charges
relating to - 1764.15
earlier years)
7794.72 11872.27
Provision for Current Tax 2645.00 3800.00
Provision for Deferred Tax (304.56) 587.35
Profit after Tax 5454.28 7484.92
Add: Balance brought forward
from last year 9836.45 9212.84
Profit available for
appropriation 15290.73 16697.76
APPROPRIATIONS :
Transfer to General Reserve 490.00 5000.00
Proposed Dividend on Equity
Shares at Rs.5/- per share 1355.35 1626.42
Tax on distributable profits 180.51 234.89
Balance brought forward
to next year 13264.87 9836.45
15290.73 16697.76
PERFORMANCE:
For the year 2013-14 your Company achieved a Profit of Rs. 76.22 Crores
(before tax) against a Profit of Rs.137.01 Crores achieved last year.
Net Profit (after tax) declined to Rs. 54.54 Crores from Rs. 74.84
Crores mainly due to depressed selling price of Sugar and increase in
Power Tariff.
DIVIDENDS:
A Dividend of Rs. 6.00 per Equity Share was paid for the year 2012-13.
Your Directors recommend a Dividend of Rs. 5/- per Equity Share
(Rs.10/- Paid-up Equity Share) for the year 2013-14. The outflow
towards Dividend payment (including tax on distributable profits) would
be Rs. 1535.86 Crores. This Dividend, if approved by the Shareholders,
will be paid to all the eligible Shareholders.
CAPITAL & RESERVES:
Authorised and Paid-up Capital:
As on 31.3.2014, the Authorised Capital of the Company is Rs.30 Crores
and the Paid-up Share Capital is Rs. 27.11 Crores.
Reserves:
With the transfer of Rs. 4.90 Crores during the year under report, the
total Reserves as on 31.3.2014 stands at Rs. 536.52 Crores against Rs.
497.34 Crores on 31.3.2013.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The three Sugar Units together crushed 5, 71,449 MTs of cane during the
2013-14 season against 6,38,641 MTs crushed last year. The crushing
operations and cane price paid to cane suppliers for the 2013-14 season
are:
· inclusive of an Incentive of Rs.60/- per MT.
· Cane crush at all the three sugar units was lower compared to the
last season due to lower availability of cane and lower number of days
of cane crush.
· Recovery achieved at Sugar Unit II was higher compared to Units I and
III.
· Unfavourable weather conditions affected the cane yield per acre
thereby reducing the quantity of cane crush. This also affected
recovery.
· Due to non-availability of harvesting labour and increase in the cost
of hiring the labour, farmers opted for cultivation of other crops.
· To encourage farmers to plant cane, your Company opted to pay a cane
price higher than the Fair Remunerative Price fixed by the Government.
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai
generated 1,50,63,200 Units of Power against 2,10,04,360 Units
generated last year.
PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the Caustic Soda Division at Saggonda
achieved a turnover of Rs. 410.45 Crores compared to Rs. 371.99 Crores
achieved last year. Profit after depreciation achieved by this Division
this year was Rs. 82.95 Crores against Rs. 82.29 Crores achieved last
year. If it was not for substantial increase in "Power Tariff" and
"purchase of Additional Power" from "Power Exchanges" at a higher rate
in view of the restricted supply from State Electricity Distributing
Companies, the performance of the Chemical Units would have been
better.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during the year is Units
25,40,290 against 24,15,000 Units gener- ated last year.
The Power generation at the Tamil Nadu Wind Mills during the year under
report is 2,69,55,509 Units against 3,55,15,616 Units of last year.
This Power is being fed into the Tamil Nadu State Electricity Board
grid.
PROJECTS:
Your Company continues to focus its strategy on expansion and
diversification programme.
An Energy Efficient Caustic Soda Plant was commissioned at Saggonda.
At the Jawaharlal Nehru Pharmacity, at Parawada, Visakhapatnam, a
Sodium Hypochlorite Plant is being set up. Sodium Hydroxide and
Chlorine Gas are the main raw material for this Plant, which will be
sourced internally from our Saggonda Plants. Site development and civil
foundation works are in progress. Procurement of bought out components
required for this project have been initiated. Fabrication of all the
process equipment and storage tanks has been completed. Fabrication of
the structures for the main process Plant is in progress.
Sodium Hypochlorite is used in the drug and pharmaceutical industries,
water treatment, paper and chemical industries. Since the Plant is
being put up at the Pharmacity, it will have the advantage of catering
to the require- ments of user industries in and around Jawaharlal Nehru
Pharmacity. This project is expected to be commis- sioned around the
end of 2014.
A Hydrogen Peroxide Plant is being set up at Saggonda. This project
would have the locational advantage as Hydrogen which is the main raw
material, will be sourced in-house from our Caustic Soda Plant at
Saggonda. This product is widely used for Bleaching, Water and
Effluent Treatment Plant, Chemical synthesis and allied applications.
For the effective utilisation of Chlorine, which is a bye product at
the Caustic Soda Plant, a Chlorinated Paraffins Plant is being set up
at Saggonda. Chlorinated Paraffins are mainly used as a Plasticiser.
Required steps for implementation have been initiated.
As Power is an essential input for your Company''s Chlor Alkali
operations, a Coal Based Power Project is being set up at the Chemical
Complex at Saggonda. 40 acres of land have been procured. Details for
the Power Project have been prepared. The total capital cost of the
project has been estimated at Rs. 193.50 Crores. Technical evaluation
of Turbine package has been completed and final offers are awaited from
vendors. Techni- cal evaluation of Equipment offers are under progress
and expected to be completed shortly. A public hearing by the Andhra
Pradesh Pollution Control Board is yet to take place, after which
purchase orders will be released.
The Power generated from this Power Plant will be utilised for the
Chemical Plants located at Saggonda.
A Solar Power Plant, based on Photovoltaic Technology, is being set up
at Kovvur at a total cost of Rs.21.20 Crores. Execution of this Project
has been entrusted to Tata Solar Power on Engineering, Procurement and
Construction basis. The Power generated by this Plant will be utilised
in-house at Kovvur. Installation of a Supervisory Control and Data
Acquisition (SCADA) system at Solar Power Plant has been completed.
Pre- commissioning checks are in progress.
At Sugar Unit-III, Boiler upgradation, installtion of a new
Sulphitation system, Sugar and Begasse handling system, 50 Ton Vaccum
Pan were taken up and have been commissioned. Consent for expansion to
6000 TCD and installation of a 31 MW Power Plant have been cleared by
Andhra Pradesh Pollution Control Board. Consent For Operation for
expanded capacity without Power Plant has also been issued.
These Projects are expected to strengthen your Company''s Product range
and improve revenue generation.
CERTIFICATION :
Your Directors are happy to inform:
Aspirin Division at Tanuku has been certified by DET NORSKE VERITAS
(DNV) for Quality Manage- ment System Standard (ISO 9001:2008);
Environmental Management System Standard (ISO 14001:2004); and
Occupational Health & Safety Management System Standard (OHSAS
18001:2007).
Chemicals & Fertilisers Division at Saggonda has been certified by DNV
for ISO 9001:2008, ISO 140001:2004 and OHSAS 18001:2007 Management
System Standards.
Chemicals & Fertilisers Division at Saggonda has been granted Licence
by Bureau of Indian Standards, New Delhi 15573:2005 for Manufacture and
Supply of 10% Medium Basicity & 10% High Basicity of Poly Aluminium
Chloride (PAC 10 MB).
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2014, Equity Shares representing 43.90% of the Share
Capital have been dematerialised.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Your Directors confirm:
i. That in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed.
ii. That the Directors 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 ended 31st
March, 2014 and of the profit of the Company for that year;
iii. That the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. That the Directors have prepared the Annual Accounts on a going
concern basis.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on
Corporate Governance along with Management Discussion and Analysis
forming part of the Directors'' Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied
with the conditions of Corporate Gover- nance as stipulated in the
Listing Agreement with the Stock Exchanges and the same is annexed to
the Report of Directors.
DIRECTORS:
Your Directors express profound grief over the sad demise of Directors
Dr. Anumolu Ramakrishna and Dr. Alapaty Appa Rao. Your Directors place
on record appreciation of their valuable guidance during their tenure
as Directors of the Company.
Justice G. Ramanujam (Retd.) retired as Director of the Company at the
66th Annual General Meeting. Your Directors place on record
appreciation of the valuable guidance rendered by him during his tenure
as Director of the Company.
In terms of Article 111 of the Articles of Association of the Company,
Directors, Sri M. Thimmaraja and Sri P.S.R.V.K. Ranga Rao retire by
rotation at the 67th Annual General Meeting and being eligible, offer
themselves for re-appointment.
As per the provisions of the Companies Act, 2013 Independent Directors
are required to be appointed by the Shareholders. As such, the
appointment of Directors Sri A. Ranga Rao, Dr. P. Kotaiah, Sri V.S.
Raju, Dr. A.V. Rama Rao and Sri P.A. Chowdary as Independent Directors
is being placed for the approval of Shareholders at the ensuing 67th
Annual General Meeting,
AUDIT COMMITTEE:
Audit Committee comprises 3 Non Whole-time, Independent Directors, Sri
A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is the
Chairman of this Committee.
OTHER COMMITTEES :
- To be in line with the Provisions of the Companies Act, 2013, the
following committes have been constituted by the Board.
- Corporate Social Responsibility Committee : Comprises 4 Directors Dr.
B.B. Ramaiah, Sri P. Narendranath Chowdary, Sri M. Thimmaraja and Sri
V.S. Raju (Independent Director).
- Nomination & Remuneration Committee : Comprises 3 Independent
Directors, Sri A. Ranga Rao, Sri V.S. Raju and Sri P.A. Chowdary.
- Stakeholders Relationship Committee : Comprises 3 Directors Sri P.
Narendranath Chowdary, Sri M. Thimmaraja, Independent Director Sri
P.A. Chowdary, who is the Chairman of the Committee.
INDUSTRIAL RELATIONS:
The relations with your Company''s employees continue to be cordial and
harmonious during the year under report.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be
accorded high priority.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company is dedicated to the betterment of the Rural Masses in the
areas of our operations. Way back in the 1950s, well before there was
the thought of "Corporate Social Responsibility" your Company took up
these activities. Realising that Health and Education are vital for the
improvement of the quality of human life your Company helped build a
Medical College at Kakinada to produce the Doctors needed for rural
healthcare and followed this up with helping in setting up a modern
Hospital at Tanuku providing Cardiac, Opthalmic, Orthopedic,
Obstetrics, Gynaecological and Dental Care. Your Company helped to
provide education by helping in setting up two Schools and a
Polytechnic and helped in setting up a modern Library and a Cultural
Centre with a 1000 seat Indoor Auditorium and an Outdoor Auditorium.
As required by the provisions of Companies Act, 2013, a Corporate
Social Responsibility (CSR) Committee has been constituted by the Board
of the Company with Dr. B.B. Ramaiah, Chairman & Managing Director; Sri
P. Narendranath Chowdary, Managing Director; Sri M. Thimmaraja, Joint
Managing Director and Sri V.S. Raju, Independent Director as members of
the Committee. This Committee will frame the Corporate Social
Responsibility activities policy as specified by the CSR Rules provided
under the Companies Act, 2013 and recommend to the Board for its
consideration and implementation.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended by Companies (Particulars of Employees)
Amendment Rules, 2011 regarding employees is given in Annexure "A"
forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
Information pursuant to 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 given in Annexure "B" forming part
of this Report.
FIXED DEPOSITS:
Fixed Deposits aggregating to Rs 41.20 lakhs held by 88 depositors had
fallen due for payment but remained unclaimed as on 31.3.2014.
Unclaimed deposits aggregating to Rs. 12.75 lakhs held by 20 depositors
have since been renewed/repaid. Still, deposits aggregating to Rs.28.45
lakhs held by 68 depositors remained unclaimed as on date.
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting Standards, consolidated financial
statements of the Company and its subsidiaries and Associate form part
of the Report and Accounts. These consolidated statements have been
prepared on the basis of audited results received from the Subsidiary
and Associate companies as approved by their respective Boards.
In view of the general exemption granted by the Ministry of Corporate
Affairs, the Accounts of the subsidiary companies for the year 2013-14
have not been attached to the Company''s Accounts. However, Shareholders
desirous of obtaining the Annual Accounts of the subsidiaries may
obtain them upon request. The Annual Report and the Accounts of the
subsidiary companies will be kept for inspection at the Company''s
Registered Office as well as at the offices of your subsidiary
companies.
SUBSIDIARY COMPANIES:
JOCIL LIMITED:
For the Financial Year ending 31.3.2014, your subsidiary company, JOCIL
Ltd., posted a profit of Rs. 1630.45 lakhs (before taxation) against
Rs. 2294.46 lakhs (before taxation) last year. The Board of this
subsidiary recommended a Dividend of Rs. 5/- per share on the Capital
of 88,81,150 Equity Shares. Dividend paid last year was Rs. 6/- per
share.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
The company achieved a sales of Rs. 159.98 lakhs against Rs. 636.78
lakhs and incurred a loss (before tax) of Rs. 79.42 lakhs against the
loss of Rs. 46.87 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the look out for a suitable project to be taken up
by the company.
AUDITORS:
M/s Brahmayya & Co. Chartered Accountants, Vijayawada, the present
Auditors, retire at the 67th Annual General Meeting and are eligible
for re-appointment.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed
as Cost Auditors of the Company for the products, which are subject to
Cost Audit, for the year ended 31.3.2014. Cost Auditors Report and
Compliance Report in respect of Financial Year 2012-13 have been filed
with the Ministry of Corporate Affairs on 24.9.2013 and 23.09.2013
respectively i.e., within the stipulated due date of 27.9.2013.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation extended by the State and Central Government authorities,
Financial Institutions, Banks and Shareholders. They also express their
appreciation to the employees at all levels for the successful working
of the Company.
Venkatarayapuram For and on behalf of the Board
TANUKU Â 534 215 Dr. B.B. RAMAIAH
26-05-2014 Chairman and Managing Director
Mar 31, 2013
To The Shareholders
The Directors have pleasure in presenting this SIXTY SIXTH ANNUAL
REPORT along with the audited Statement of Accounts for the year ending
31st March, 2013.
Financial Results:
(Rupees in lakhs)
This Year Last Year
Sales 83200.31 75804.61
Other Income 1373.57 1323.27
84573.88 77127.88
Profit for the year 17820.52 17716.47
Depreciation 4119.29 3932.37
Profit after depreciation 13701.23 13784.10
Add: Excess provision of
Income-tax credited back 12.21
Add: Income Tax Refund received 7.61
Less: Short Provision of Income Tax 72.42
Less: Exceptional Item (Electricity
FSA charges relating to 1764.15
earlier years)
11872.27 13796.31
Provision for Current Tax 3800.00 4150.00
Provision for Deferred Tax 587.35 304.04
Profit after Tax 7484.92 9342.27
Add: Balance brought
forward from last year 9212.84 7044.18
Profit available for appropriation 16697.76 16386.45
APPROPRIATIONS :
Transfer to General Reserve 5000.00 5000.00
Proposed Dividend on Equity
Shares at Rs.6 /-per share 1626.42 1897.50
(Last Year Dividend on Equity
Shares at Rs.7/- per share)
Tax on distributable profits 234.89 276.11
Balance brought forward to next year 9836.45 9212.84
16697.76 16386.45
PERFORMANCE:
For the year 2012-13 your Company achieved a Profit of Rs. 137.01
Crores (before tax) against a Profit of Rs. 137.84 Crores achieved last
year. However Net Profit (after tax) declined to Rs. 74.84 Crores from
Rs. 93.42 Crores mainly due to making of provision of Rs. 17.64 Crores
as Exceptional Item towards Fuel Surcharge Adjustment (FSA) liability
payable to State Electricity Board. On the whole, the performance of
your Company has been satisfactory.
DIVIDENDS:
A Dividend of Rs. 7/- per Equity Share was paid for the year 2011-12.
Your Directors recommend a Dividend of Rs.6/- per Equity Share (Rs.10/-
paid-up Equity Share) for the year 2012-13. The outflow towards
Dividend payment (including tax on distributable profits) would be
Rs.18.61 Crores. This Dividend, if approved by the Shareholders, will
be paid to all the eligible Shareholders.
CAPITAL& RESERVES:
Authorised and Paid Up Capital:
As on 31.3.2013, the Authorised Capital of the Company is Rs.30 Crores
and the Paid-up Capital is Rs. 27.11
Crores.
Reserves:
With the transfer of Rs. 50.00 Crores during the year under report, the
total Reserves as on 31.3.2013 stands at Rs. 497.34 Crores against Rs.
441.10 Crores on 31.3.2012.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The three Sugar Units in aggregate crushed 6,38,641MTs of cane during
the 2012-13 season against 8,78,167 MTs crushed last year. The crushing
operations and cane price paid to cane suppliers for the 2012-13 season
are:
SUGAR UNIT Â I SUGAR UNIT Â II SUGAR UNIT - III
TANUKU TADUVAI BHIMADOLE
Fin.
Year Fin.
Year Fin.
Year Fin.
Year Fin.
Year Fin.
Year
2012-13 2011-12 2012-13 2011-12 2012-13 2011-12
(A) Crushing
details:
Total cane
crushed (MT) 178035 220481 272811 391839 187795 265847
Total No. of
days crushed 77 90 97 114 80 96
Total Sugar
produced (MT) 16639 20003 28627 43805 17689 25514
Average Recovery 9.28% 9.22% 10.51% 11.26% 9.27% 9.70%
(B) Cane price:
Fair & Remunerative
price (per MT) 1700.00 1450.00 2016.00 1636.66 1735.80 1462.24
Cane price paid
(per MT)* 2200.00 2000.00 2276.00 2000.00 2200.00 2000.00
· inclusive of Purchase Tax Incentive of Rs.60/- per MT.
· Cane crush at all the three sugar units was lower compared to the
last season due to lower availability of cane and lower number of days
of cane crush.
· Recovery achieved at Sugar Unit-I was marginally higher and at Sugar
Units II and III was lower compared to last season.
· Unfavourable weather conditions affected the cane yield per acre
thereby reducing the quantity of cane crush. This also affected
recovery.
· Due to non-availability of harvesting labour and increase in the cost
of hiring the labour, farmers opted for cultivation of other
alternative crops for getting better price.
· To have the cane farmers continue to plant cane, your Company opted
to pay a cane price higher than the Fair Remunerative Price fixed by
the Government.
· Sugar sales realisation of all the three Units has been better
compared to last year.
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai
generated 2,10,04,360 Units of Power against 1,80,64,480 Units
generated last year.
PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the Caustic Soda Division at Saggonda
achieved a turnover of Rs. 336.46 Crores compared to Rs. 326.16 Crores
achieved last year. Profit after depreciation achieved by this Division
this year was Rs. 82.29 Crores against Rs. 105.47 Crores achieved last
year. The performance of Chemical Division was affected mainly on
account of cost of production going up due to substantial increase in
"Power Tariff" and "Purchase Of Additional Power" from "Power
Exchanges" at a higher rate in view of the restricted supply from State
Electricity Distributing Companies.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during the year is 24,15,000
Units against 23,05,361 Units generated last year.
The Power generation at the Tamil Nadu Wind Mill operations during the
year under report is 3,55,15,616 Units against 2,14,15,482 Units of
last year. This Power is being fed into the Tamil Nadu State
Electricity Board grid.
PROJECTS:
Your Company continues to focus its strategy on expansion and
diversification programme.
A 80 TPD Energy Efficient Caustic Soda Flaking Plant has been put up at
Saggonda. Caustic Soda Lye requirement for this Plant is sourced
inhouse. This Plant came into operation during the year under report.
Your Company owns Ac. 42.28 of land in Jawaharlal Nehru Pharma City
Non-SEZ area. At this site a 100 TPD Sodium Hypochlorite Plant is being
set up. Sodium Hydroxide and Chlorine gas, the main raw materials will
be sourced inhouse. Site development and civil foundation works are in
progress. Some of the required components have arrived at the site.
Fabrication of process equipment and storage vessels is in progress at
our workshop at Tanuku. This product finds application in the Pharma
and Water Treatment industries. This Plant is expected to be in
operation during the current financial year.
A 40 TPD Hydrogen Peroxide Plant is being set up at Saggonda. This
project would have locational advantage as Hydrogen, the main raw
material, will be sourced inhouse from our Chlorine Plant at Saggonda.
This product is environmental-friendly and is widely used for
Bleaching, Water/Waste and Effluent Treatment Plant, Chemical synthesis
and allied applications.
For effective utilisation of Chlorine, a by-product of Caustic Soda,
Chlorinated Paraffins Plant of 20 TPD capacity is being set up at
Saggonda. Chlorinated Paraffins are mainly used as Plasticisers.
Preliminary steps have been initiated in this regard.
In order to ensure self sufficiency in Power, setting up of a 36 MW
Coal based Power Plant at Saggonda is being actively considered.
At Sugar Unit-III, Bhimadole, upgradation of 40 TPH Thermax Boiler and
installation of new Sulphitation system, Sugar and Bagasse handling
systems, 50 Ton Vacuum pan and various Steam economy measures viz.
conversion of Quad as Quintuple Evaporator set, Seed Melters,
Condensate Flash System, Tubular Heaters using V3 for syrup and
scalding juice were taken up and have been commissioned successfully.
These Projects are expected to strengthen your CompanyÂs product range
and improve revenue generation.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2013, Equity Shares representing 41.85% of the Share
Capital have been dematerialised.
DIRECTORSÂ RESPONSIBILITY STATEMENT:
Your Directors confirm:
i. that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed, in the opinion of the Board of
Directors;
ii. that the Directors 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 ended 31st
March, 2013 and of the profit of the Company for that year;
iii. that the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that the Directors have prepared the Annual Accounts on a going
concern basis.
CORPORATE GOVERNANCE:
As per the provisions of the Listing Agreement, a Report on Corporate
Governance along with Management Discussion and Analysis forming part
of the Directors Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied
with the conditions of Corporate Governance as stipulated in the
Listing Agreement with the Stock Exchanges and the same is annexed to
the Report of Directors.
DIRECTORS:
In terms of Article 111 of the Articles of Association of the Company,
Directors, Dr. A.V.Rama Rao, Dr.P.Kotaiah and Sri P.A.Chowdary retire
by rotation at the 66th Annual General Meeting and being eligible,
offer themselves for re-appointment. Justice G.Ramanujam (Retd.) who
also retires by rotation has not offered himself for re- appointment.
Re-appointment of Sri P.S.R.V.K.Ranga Rao as Executive Director for a
period of 5 years with effect from 1.5.2014 is being placed before the
shareholders at the ensuing 66th Annual General Meeting for their
approval.
AUDIT COMMITTEE:
Audit Committee comprises 3 Non Whole-time Independent Directors Sri A.
Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is the
Chairman of the Committee.
INDUSTRIAL RELATIONS:
The relations with the employees continues to be cordial and harmonious
during the year under report.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continues to be
accorded high priority.
CORPORATE SOCIAL RESPONSIBILITY :
Way back in the 1950s, well before there was the idea of having the
Corporate Sector look at " Corporate Social Responsibility ", your
Company took up these activities.
We at The Andhra Sugars Limited are dedicated to the betterment of our
Rural Areas. We realised that Education and Health are vital for the
improvement of life in the Rural Areas.
Due to the need to provide Quality Basic Education to the younger
generation around us we helped to build Elementary and High Schools at
Tanuku and Dommeru.
With Industrialisation in the surrounding areas and the need for
qualified Technical Staff we helped to build at Tanuku a Quality
Polytechnic with Hostel Facility.
Due to the need for Doctors to provide the much needed Health Care in
the Rural Areas we helped to build a Medical College at Kakinada.
Due to the need for providing the Rural Population around us the much
needed Modern Special Medical Care only available in distant cities we
helped to build a Modern Hospital at Tanuku with most of the
Specialised Medical Care needed.
We also helped to build a Library and Cultural Centre at Tanuku with a
1000 Seater Auditorium.
These are some of the Projects your Company took up till now and will
continue to take up other activities in the days to come.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended by Companies (Particulars of Employees)
Amendment Rules, 2011 regarding employees is given in Annexure "A"
forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
Information pursuant to 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 given in Annexure "B" forming part
of this Report.
FIXED DEPOSITS:
Fixed Deposits aggregating to Rs 36.85 lakhs held by 85 depositors had
fallen due for payment but remained unclaimed as on 31.3.2013.
Unclaimed deposits aggregating to Rs. 14.50 lakhs held by 23 depositors
have since been renewed/repaid. Still, deposits aggregating to Rs.22.35
lakhs held by 62 depositors remained unclaimed as on date.
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting standards, consolidated financial
statements of the Company and its Subsidiaries form part of the Report
and Accounts. These consolidated statements have been prepared on the
basis of audited results received from the Subsidiary Companies as
approved by their respective Boards.
In view of the general exemption granted by Ministry of Corporate
Affairs, the Accounts of the Subsidiary Companies for the year 2012-13
have not been attached to the CompanyÂs Accounts. However, Shareholders
desirous of obtaining the Annual Accounts of the Subsidiaries may
obtain the same upon request. The Annual Report and the Accounts of the
Subsidiary Companies will be kept for inspection at the CompanyÂs
Registered Office as well as at the offices of your Subsidiary
Companies.
SUBSIDIARY COMPANIES:
JOCIL LIMITED:
For the Financial Year ending 31.3.2013, your subsidiary Company, JOCIL
Ltd., posted a profit of Rs. 2294.46 lakhs (before taxation) against
Rs. 1860.42 lakhs (before taxation) last year. The Board of this
Subsidiary has recommended a Dividend of Rs.6/- per share on the
Capital of 88,81,150 Equity Shares. Dividend paid last year was Rs.5/-
per share.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
The Company achieved a sales of Rs.636.79 lakhs against Rs. 606.20
lakhs and incurred a loss (before Tax) of Rs.57.37 lakhs against the
loss of Rs. 33.56 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the look out for a suitable project to be taken up
by the Company.
AUDITORS:
M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present
Auditors, retire at the 66th Annual General Meeting and are eligible
for re-appointment.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed
as Cost Auditors of the Company for the products, which are subject to
Cost Audit, for the year ended 31-3-2013. Cost Auditors Report in
respect of Financial Year 2011-12 has been filed with the Ministry of
Corporate Affairs on 19.01.2013 i.e., within the stipulated due date of
31st January, 2013.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation extended by the State and Central Government authorities,
Financial Institutions and Banks. They also express their appreciation
to the employees at all levels for the successful working of the
Company.
Venkatarayapuram For and on behalf of the Board
TANUKU Â 534 215 Dr. B.B. RAMAIAH
27-05-2013 Chairman and Managing Director
Mar 31, 2012
The Directors have pleasure in presenting this SIXTY FIFTH ANNUAL
REPORT along with the audited Statement of Accounts for the year ending
31st March, 2012.
FINANCIAL RESULTS :
(Rupees in lakhs)
This Year Last Year
Sales 75759.55 50499.92
Other Income 1368.32 1487.14
77127.87 51987.06
Profit for the year 17716.47 8959.42
Depreciation 3932.37 3804.75
Profit after depreciation 13784.10 5154.67
Add: Excess provision of Income
Tax credited back 12.21 Ã
13796.31 5154.67
Provision for Current Tax 4150.00 1250.00
Provision for Deferred Tax 304.04 283.77
Profit after Tax 9342.27 3620.90
Add: Balance brought forward
from last year 7044.20 10124.37
Profit available for appropriation 16386.47 13745.27
APPROPRIATIONS:
Transfer to General Reserve 5000.00 5000.00
Proposed Dividend on Equity
Shares at Rs.7.00 per share 1897.50 1490.89
(Last Year Dividend on Equity
Shares at Rs. 5.50 per share)
Tax on distributable profits 276.11 210.18
Balance carried forward
to next year 9212.86 7044.20
16386.47 13745.27
PERFORMANCE:
2011-12 has been a significant year for your Company. Profit of Rs.
137.84 crores (after depreciation) has been the highest in the history
of the Company. Profit after tax is Rs. 93.42 crores against Rs. 36.21
crores of last year. Sales increased to Rs. 757.59 crores against Rs.
505.00 crores of last year. The overall performance of your Company has
been impressive.
DIVIDENDS:
A Dividend of Rs. 5.50 per Equity Share was paid for the year 2010-11.
Your Directors recommend a Dividend of Rs.7/- per Equity Share (Rs.10/-
paid-up Equity Share) for the year 2011-12. The outflow towards
Dividend payment including tax on distributable profits would be
Rs.21.74 crores. This Dividend, if approved by the Shareholders, will
be paid to all the eligible Shareholders.
CAPITAL & RESERVES:
Authorised and Paid-up Capital:
As on 31-3-2012, the Authorised Capital of the Company is Rs.30 crores
and the Paid-up Capital is Rs. 27.11 crores.
Reserves:
With the transfer of Rs. 50 crores during the year under report, the
total Reserves as on 31-3-2012 stands at Rs. 441.10 crores against Rs.
369.42 crores on 31-3-2011.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The three Sugar Units in aggregate crushed 8,78,167 MTs of cane during
the 2011-12 season against 7,54,635 MTs crushed last year. The crushing
operations and cane price paid to cane suppliers for the 2011-12 season
are:
SUGAR UNIT Ã I SUGAR UNIT Ã II SUGAR UNIT - III
TANUKU TADUVAI BHIMADOLE
Fin. Year Fin.
Year Fin.Year Fin.
Year Fin. Year Fin.
Year
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
(A) Crushing
details:
Total cane
crushed (MT) 220481 226653 391839 330730 265847 197252
Total No. of
days crushed 90 95 114 112 96 88
Total Sugar
produced (MT) 20003 22235 43805 35448 25514 19046
Average Recovery 9.22% 9.45% 11.26% 10.72% 9.70% 9.58%
(B) Cane price:
Fair &
Remunerative
price (per
M.T.) 1450.00 1391.20 1636.66 1537.20 1462.24 1405.80
Cane price
paid (per
M.T)* 2000.00 1900.00 2000.00 1900.00 2000.00 1900.00
* inclusive of purchase tax incentive price @ Rs. 60/- per MT.
' Cane crush at Sugar Unit-I was marginally less compared to last year
as the number of days of crush were lower than last year.
' Sugar Units II & III crushed for more number of days compared to last
year consequently crushing a quantity higher than last year.
' Recovery achieved and sugar produced were marginally lower at Sugar
Unit-I while it was higher at Sugar Units II & III compared to last
year.
' To have the cane farmers continue to plant cane, your Company opted
to pay a cane price higher than the Fair & Remunerative Price fixed by
the Government.
' Sugar sales realisation has been better compared to last year.
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai
generated 1,80,64,480 Units of Power against 1,67,65,420 Units
generated last year.
PERFORMANCE OF CHEMICAL DIVISION:
During the year under report the Chemical Divisions put up in an
impressive performance. The Caustic Soda Division at Saggonda achieved
a turnover of Rs.354.93 crores compared to Rs.263.69 crores achieved
last year. Profit after depreciation achieved by this division this
year was Rs.105.47 crores against Rs.45.46 crores achieved last year.
Performance of the Sulphuric Acid and Superphosphate plants is also
better compared to last year.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during the year is 22,90,800
Units against 19,24,800 Units generated last year.
The Power generation at the Tamil Nadu Wind Mill operations during the
year under report is 2,15,13,009 Units against 2,52,48,980 Units of
last year. This Power is being fed into Tamil Nadu State Electricity
Board grid.
PROJECTS:
Due to the advantage of economy of scale and diversification, your
Company continues to focus its strategy on Expansion and
Diversification Programmes.
A 400 TPD Caustic Soda Plant using Energy Efficient Technology is in
operation at Saggonda. This Plant produces Caustic Soda which is
converted into Caustic Soda Flakes and Lye as per the market
requirement. At present a 60 TPD Caustic Soda Flaking Plant is in
operation which is unable to fully meet the increased demand. Keeping
this in view, a new 70 TPD Caustic Soda Flaking Plant is proposed to be
set up at Saggonda. The new Plant will use an Energy Efficient design
which would consume lesser energy. Orders for equipment have been
placed and the Plant is expected to be in operation during the current
Financial Year.
Your Company owns 42.28 acres of land in Jawaharlal Nehru Pharmacity
Non SEZ area, Parawada, Visakhapatnam. A 100 TPD Hypochlorite Plant is
being set up at this site. Site development works, material procurement
and equipment fabrication are in progress. The main raw materials,
Caustic Soda and Chlorine required for this product will be sourced
internally from our Plant at Saggonda. Barring unforeseen circumstances
this Plant is expected to be commissioned during the current Financial
Year.
As domestic market for Aspirin is not encouraging, your Company focus
is to widen the International market base. Keeping this in view the
present 1000 TPA Aspirin Plant is being expanded to 2000 TPA. The
Committee of AP State Pollution Control Board has conveyed it's
preliminary approval of our application. Formal approval is awaited
after which necessary steps will be taken to obtain other approvals
required.
In addition to Wind Mills established at Kundadam, Annaikulam,
Kurichampatti and Surandai in Tamil Nadu and Ramagiri in Andhra
Pradesh, 5 MW Wind Turbine Generators at four locations at Palladam in
Coimbatore district have been established. These new Turbine Generators
have been commissioned during the year under report.
These Projects are expected to strengthen your Company's product range
and improve revenue generation.
AWARD:
Your Directors are happy to inform that in appreciation of the
achievements in Energy Conservation in the Chlor- Alkali Sector for the
year 2011, Government of India, Ministry of Power, was pleased to award
the First Prize to your Company's Chemicals & Fertilizers Division at
Saggonda.
CERTIFICATION:
Your Directors are glad to inform that your Company's Chemicals &
Fertilisers Division at Saggonda has received ISO 14001:2004 and ISO
9001L:2008 Certification pertaining to Manufacture and Sale of Caustic
Soda Lye and Flakes, Chlorine, Hydrochloric Acid, Sodium Hypochlorite,
Hydrogen Gas, Poly Aluminum Chloride and Sulphuric Acid at this
Division.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2012, Equity Shares representing 41.5% of the Share
Capital have been dematerialised.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors confirm:
i. that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed, in the opinion of the Board of
Directors.
ii. that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
responsible 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 ended 31st
March, 2012 and of the profit of the Company for that year;
iii. that the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that the Directors have prepared the Annual Accounts on a going
concern basis.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on
Corporate Governance along with Management Discussion and Analysis
forming part of the Directors' Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied
with the conditions of Corporate Governance as stipulated in the
Listing Agreement with the Stock Exchanges and the same is annexed to
the Report of Directors.
DIRECTORS:
Your Directors report with profound grief the sad demise, on 3-9-2011,
of erstwhile Chairman and Managing Director, Dr. Mullapudi Harischandra
Prasad, one of the founders of your Company. His demise has been an
irreparable loss to the Company. Your Directors place on record the
warm appreciation of his invaluable contribution to the growth and
prosperity of the Company since inception. We at the Company will keep
the lamp he lit glowing and held high.
In terms of Article 116 of the Articles of Association of the Company,
Directors Sri V.S.Raju, Dr. Alapaty Appa Rao, Sri M.Narendranath and
Sri P. Achuta Ramayya retire by rotation at the 65th Annual General
Meeting and being eligible, offer themselves for re-appointment.
Dr. B. B. Ramaiah was appointed as Chairman and Managing Director with
effect from 1-11-2011. Sri P. Narendranath Chowdary and Sri P. Achuta
Ramayya were re-designated as Managing Director and Joint Managing
Director respectively with effect from 1-4-2012. Necessary Resolution
is being placed for the approval of the shareholders at the ensuing
65th Annual General Meeting.
Re-appointment of Sri M. Narendranath, Sri M. Thimmaraja and Sri P.
Achuta Ramayya as Joint Managing Directors for a period of 5 years with
effect from 1-1-2013 is being placed before the shareholders at the
ensuing 65th Annual General Meeting for their approval.
AUDIT COMMITTEE:
Audit Committee comprises 3 non Whole-time Independent Directors, Sri
A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is the
Chairman of the Committee.
INDUSTRIAL RELATIONS:
The relations with the employees continue to be cordial and harmonious
during the year under report.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be
accorded high priority.
Your Directors are happy to inform that the Company's Chemicals &
Fertilizers Division at Saggonda conforms to the Occupational Health
and Safety Management System Standard and has received OHSAS 18001:2007
certification pertaining to Manufacture and Sale of Caustic Soda Lye
and Flakes, Chlorine, Hydrochloric Acid, Sodium Hypochlorite, Hydrogen
Gas, Poly Aluminum Chloride and Sulphuric Acid at this Division.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended by Companies (Particulars of Employees)
Amendment Rules, 2011 regarding employees is given in Annexure "A"
forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
Information pursuant to 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 given in Annexure "B" forming part
of this Report.
FIXED DEPOSITS:
Fixed Deposits aggregating to Rs. 48.10 lakhs held by 72 depositors had
fallen due for payment but remained unclaimed as on 31-3-2012.
Unclaimed deposits aggregating to Rs. 32.80 lakhs held by 30 depositors
have since been renewed/repaid. Still, deposits aggregating to Rs.
15.30 lakhs held by 42 depositors remained unclaimed as on date.
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting Standards, consolidated financial
statements of the Company and its Subsidiaries form part of the
Report and Accounts. These consolidated statements have been prepared
on the basis of audited results received from the Subsidiary Companies
as approved by their respective Boards.
In view of the general exemption granted by Ministry of Corporate
Affairs, the Accounts of the Subsidiary Com- panies have not been
attached to the Company's Accounts. However, Shareholders desirous of
obtaining the Annual Accounts of the Subsidiaries may obtain the same
upon request. The Annual Report and the Accounts of the Subsidiary
Companies will be kept for inspection at the Company's Registered
Office as well as at the offices of your Subsidiary Companies.
SUBSIDIARY COMPANIES:
JOCIL LIMITED:
For the Financial Year ending 31-3-2012, your subsidiary Company, JOCIL
Ltd., posted a profit of Rs. 1860.42 lakhs (before taxation) against
Rs. 2845.33 lakhs (before taxation) last year. The Board of this
Subsidiary has recommended a Dividend of Rs.5/- per share on the
Enhanced Capital of 88,81,150 Equity Shares resulting out of the
allotment of Bonus Shares in the ratio 1:1 during the year. Dividend
paid last year was Rs.8/- per share on 44,40,575 Equity Shares.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
During the year under report 81 MTs of Hydrazine Hydrate was produced
against 87 MTs last year. The Company achieved a sales of Rs. 606.20
lakhs against Rs. 725.75 lakhs and incurred a loss of Rs.33.56 lakhs
against the loss of Rs. 47.63 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the look out for a suitable project to be taken up
by the Company.
AUDITORS:
M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present
Auditors, retire at the 65th Annual General Meeting and are eligible
for re-appointment.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed
as Cost Auditors of the Company for the products which are subject to
Cost Audit, for the year ended 31-3-2012. Cost Auditors' Report in
respect of Financial Year 2010-11 has been filed with the Ministry of
Corporate Affairs on 31-08-2011, i.e., within the stipulated due date
of 30-9-2011.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation extended by the State and Central Government authorities,
Financial Institutions and Banks. They also express their appreciation
to the employees at all levels for the successful working of the
Company.
Venkatarayapuram For and on behalf of the Board
TANUKU Ã 534 215 Dr. B.B. RAMAIAH
28-07-2012 Chairman & Managing Director
Mar 31, 2011
The Directors have pleasure in presenting this SIXTY FOURTH ANNUAL
REPORT along with the audited Statement of Accounts for the year ended
31st March, 2011.
FINANCIAL RESULTS :
(Rupees in lakhs)
This Year Previous Year
Sales 50254.97 58203.08
Other Income 5157.36 2943.39
------- -------
55412.33 61146.47
------- -------
Profit for the year 8963.42 13481.84
Depreciation 3804.75 3490.74
------- -------
Profit after depreciation 5158.67 9991.10
Add: Income Tax refund received -- 2.67
Excess provision of Income-tax
credited back -- 18.97
---- -----
5158.67 10012.74
Provision for Current Tax 1250.00 2700.00
Provision for Deferred Tax 283.77 633.09
Provision for Wealth Tax 4.00 4.00
------- -------
Profit after Tax 3620.90 6675.65
Add: Balance brought forward from
last year 10124.37 5658.61
------- -------
Profit available for appropriation 13745.27 12334.26
------- -------
APPROPRIATIONS:
Transfer to General Reserve 5000.00 670.00
Proposed Dividend on Equity Shares
at Rs.5.50 per share 1490.89 1355.35
(Last Year Dividend on Equity Shares
at Rs.5/- per share)
Tax on distributable profits 210.18 184.54
Balance carried forward to next year 7044.20 10124.37
------- -------
13745.27 12334.26
------- -------
PERFORMANCE:
For the year ended 31st March, 2011 sales is Rs.502.55 Crores against
Rs.582.03 Crores last year. Profit after depreciation is Rs.51.59
Crores against a Profit of Rs.99.91 Crores last year. Profit after tax
is Rs.36.21 Crores against Rs.66.76 Crores achieved last year.
Decline in Profit is mainly due to depressed sale price of Sugar and
Caustic Soda.
DIVIDENDS:
For 2009-10 a Dividend of Rs.5/- per Equity Share was paid. Your
Directors recommend a Dividend of Rs.5.50 per Equity Share (Rs.10/-
paid-up Equity Share) for the year 2010-11. The outflow towards
Dividend payment including tax on distributable profits is Rs.17.01
Crores. This Dividend, if approved by the Shareholders, will be paid to
all the eligible Shareholders.
CAPITAL & RESERVES:
Authorised and Paid-up Capital:
As on 31.3.2011, the Authorised Capital of the Company is Rs.30 Crores
and the Paid-up Capital is Rs.27.11 Crores.
Reserves:
With the transfer of Rs.50 Crores during the year under report, the
total Reserves as on 31.3.2011 stood at Rs.369.42 Crores against Rs.
350.22 Crores as on 31.3.2010.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The three Sugar Units in aggregate crushed 7,54,635 MTs of cane during
the 2010-11 season against 3,35,585 MTs crushed last year. The crushing
operations and cane price paid to cane suppliers for the 2010-11 season
are:
SUGAR UNIT Ã I SUGAR UNIT Ã II
TANUKU TADUVAI
Fin. Year Fin. Year Fin. Year Fin. Year
2010-11 2009-10 2010-11 2009-10
(A) Crushing
details:
Total cane
crushed (MT) 2,26,653 1,26,565 3,30,730 1,34,153
Total No. of
days crushed 95 47 108 42
Total Sugar
produced (MT) 22,235 11,634 35,448 14,464
Average Recovery 9.45% 8.83% 10.72% 10.52%
(B) Cane price:
Fair &
Remunerative
price (per MT)
Rs. 1391.20 1394.30 1537.20 1490.20
Cane price paid
(per MT)* Rs. 1900.00 1980.00 1900.00 1980.00
SUGAR UNIT -III
BHIMADOLE
Fin. Year Fin. Year
2010-11 2009-10
(A) Crushing
details:
Total cane
crushed (MT) 1,97,252 74,867
Total No. of
days crushed 88 43
Total Sugar
produced (MT) 19,046 7,930
Average Recovery 9.58% 9.61%
(B) Cane price:
Fair &
Remunerative
price (per MT)
Rs. 1405.80 1421.17
Cane price paid
(per MT)* Rs. 1900.00 1980.00
* inclusive of Incentive Cane Price of Rs.80/- per MT
The Andhra Sugars Limited
÷ Increase in cane crush compared to previous year in view of more
number of days crushed.
÷ Increase in Sugar production compared to previous year.
÷ Recovery achieved at Sugar Unit - I and II was higher compared to
last year and at Sugar Unit - III, the recovery was marginally lower
compared to last year.
÷ In view of the need to have the cane farmers continue to plant cane,
your Company opted to pay a cane price higher than the "Fair
Remunerative Price" fixed by the Government.
÷ Sugar sales realisation was lower compared to last year due to
depressed selling price.
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai
generated 1,67,65,420 Units of Power against 72,91,780 Units generated
last year.
PERFORMANCE OF CHEMICAL DIVISION:
Performance of the Chemical Division was affected due to steep rise in
Power prices. Turnover of Caustic Soda Division at Saggonda increased
to Rs.263.69 Crores from Rs.233.05 Crores. However decline in selling
prices and steep increase in Power tariff affected the profitability of
the Division. Caustic Soda Unit at Saggonda achieved a profit of Rs.
45.46 Crores (after depreciation) against Rs.78.16 Crores (after
depreciation) achieved last year. Performance of Sulphuric Acid and
Superphosphate Divisions were good compared to that of last year.
WIND POWER UNITS:
The Power generated at Ramagiri Wind Mills during the year was
19,24,800 Units against 24,35,100 Units generated last year.
The Power generated at TamilNadu Wind Mills during the year was
2,52,48,980 Units against 1,97,96,480 Units generated last year.
PROJECTS:
Due to the advantage of economy of scale and diversification, your
Company continues to focus its strategy on expansion and
diversification programmes.
During the year under report, 100 TPD Caustic Soda Plant was converted
into energy efficient upgraded Technology. With this conversion, the
entire 400 TPD Plant at Saggonda operates using energy efficient
Technology.
Consent for Establishment of Poly Aluminium Chloride Plant has been
received from the A.P. Pollution Control Board and the Plant commenced
production on June 3, 2011. Chlorine, which is the main raw material
for this Plant, will be internally sourced to produce this product.
Poly Aluminium Chloride is extensively used in water treatment.
During the year under report, the Potassium Carbonate Plant at Tanuku
commenced commercial production. Consent for Operation has been
received. Potassium Hydroxide Lye, the main raw material for this Plant
is being sourced internally from our Plant at Kovvur. This product has
been approved by major customers. It finds applications in bulk drugs /
pharma industry.
Your Company has received environmental clearance for its planned
expansion of the Caustic Potash Plant, Hydrochloric Acid Plant, Sodium
Hypo Plant, Mono Chloro Acetic Acid Plant and Single Super phosphate
Plant. Necessary application has been made to A.P. State Pollution
Control Board for obtaining Consent for Establishment of these
products.
Your Company purchased land at the Jawaharlal Nehru Pharmacity,
Visakhapatnam for the production of pharmaceuticals. After completion
of registration formalities possession of land has been taken over.
Feasibility studies are under progress to identify and take a decision
for production of a suitable Pharma product at this site.
Wind Energy is classified as clean energy. Your Company has established
two more Wind Mills at Kundadam village in TamilNadu in addition to
the Wind Mills at Ramgiri in Ananthapur District of Andhra Pradesh and
at the villages of Annaikulam and Kurichampatti and Surandai in
Tirunelveli District of Tamil Nadu. The Tirunelveli Wind Mills Project
has been registered as a CDM Project with the United Nations Framework
for Climatic Change Control (UNFCC). Necessary steps have been
initiated to get CDM benefit. An application has been made for
obtaining endorsement of Ministry of Environment and Forests for the
two new Wind Mills installed at Kundadam village. Thereafter steps
will be initiated to avail the CDM benefits for these units also.
Your Company's Chemical Plants at Kovvur and Saggonda are Power
intensive. Keeping this in view your Company proposes to set up a Gas
based Power Plant at Saggonda to meet the Power requirements for
captive use. Necessary application has been made to the concerned
authorities for clearances of preliminary approvals in order to get
allotment of Natural Gas.
Consent for Operation has been received from the State Pollution
Control Board for operating 6000 TCD and 9 MW captive Power Plant at
Sugar Unit III, Bhimadole. This Plant will be expanded to operate at
6000 TCD in phases.
These Projects are expected to strengthen your Company's product range,
accelerate growth and improve revenue generation.
CURRENT YEAR OUTLOOK :
For the first quarter of 2011-12 the profit (after tax) was Rs.1859.41
lakhs compared to profit of (after tax) Rs.510.40 lakhs achieved
during the corresponding period in the previous year. Increase in
profit has been mainly due to higher Sales realisation from Sulphuric
Acid & Caustic Soda and its by-products. Barring unforeseen
circumstances Company's performance in the current year is expected to
be good.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2011 Equity Shares representing 40.31% of the Share
Capital have been dematerialised.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors confirm:
i. that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed, in the opinion of the Board of
Directors;
ii. that the Directors have selected such Accounting Policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the Financial Year ended 31
March, 2011 and of the profit of the Company for that year;
iii. that the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that the Directors have prepared the Annual Accounts on a going
concern basis.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on
Corporate Governance along with Management Discussion and Analysis
forming part of the Directors' Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied
with the conditions of Corporate Governance as stipulated in the
Listing Agreement with the Stock Exchanges and the same is annexed to
the Report of Directors.
DIRECTORS:
In terms of Article 123 of the Articles of Association of the Company,
Directors Sri A. Ranga Rao, Dr. Anumolu Ramakrishna, Sri P.S.R.V.K.
Ranga Rao and Sri Justice G. Ramanujam (Retd.) retire by rotation at
the 64th Annual General Meeting and being eligible, offer themselves
for re-appointment.
AUDIT COMMITTEE:
Audit Committee comprises of 3 non Whole-time Independent Directors,
Sri A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is
the Chairman of the Committee.
INDUSTRIAL RELATIONS:
The relations with the employees continue to be cordial and harmonious
during the year under report.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be
accorded high priority.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended by Companies (Particulars of Employees)
Amendment Rules, 2011 regarding employees is given in Annexure "A"
forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
Information pursuant to 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 given in Annexure "B" forming part
of this Report.
FIXED DEPOSITS:
Fixed Deposits aggregating to Rs.48.10 lakhs held by 72 depositors had
fallen due for payment but remain unclaimed as on 31.3.2011. Unclaimed
deposits aggregating to Rs.32.80 lakhs held by 30 depositors have
since been renewed/repaid. Still, deposits aggregating to Rs.15.30
lakhs held by 42 depositors remain unclaimed as on date.
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting standards, consolidated financial
statements of the Company and its Subsidiaries form part of the Report
and Accounts. These consolidated statements have been prepared on the
basis of audited results received from the Subsidiary Companies as
approved by their respective Boards.
In view of the general exemption granted by Ministry of Corporate
Affairs, the Accounts of the Subsidiary Companies have not been
attached to the Company's Accounts. However, Shareholders desirous of
obtaining the Annual Accounts of the Subsidiaries may obtain the same
upon request. The Annual Report and the Accounts of the Subsidiary
Companies will be kept for inspection at the Company's Registered
Office as well as at the offices of your Subsidiary Companies.
SUBSIDIARY COMPANIES:
JOCIL LIMITED:
For the Financial Year ended 31.3.2011, your subsidiary Company, JOCIL
Ltd., recorded a profit of Rs.2845.33 lakhs (before taxation) against
Rs.3207.01 lakhs (before taxation) last year. The Board of this
Subsidiary has recommended a Dividend of Rs.8/- per Equity Share (Rs.
10/- each paid-up) against a Dividend of Rs.10/- per share paid last
year.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
During the year under report 87 MTs of Hydrazine Hydrate was produced
against 68 MTs last year. The Company achieved a sales of Rs.212.36
lakhs against Rs.191.44 lakhs and incurred a loss of Rs.47.63 lakhs
against the loss of Rs.14.80 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the lookout for a suitable project to be taken up
by the Company.
AUDITORS:
M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present
Auditors, retire at the 64th Annual General Meeting and are eligible
for re-appointment.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed
as Cost Auditors of the Company for the products, which are subject to
Cost Audit, for the year 2010-11. Cost Auditors Report in respect of
Financial Year 2009-10 has been filed with the Ministry of Corporate
Affairs on 27.09.2010 i.e., within the stipulated date of 30th
September, 2010.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation of the
co-operation extended by the State and Central Government authorities,
Financial Institutions and Banks. They also express their appreciation
to the employees at all levels for the successful working of the
Company.
Venkatarayapuram For and on behalf of the Board
TANUKU Ã 534 215 Dr. MULLAPUDI HARISCHANDRA PRASAD
28-07-2011 Chairman & Managing Director
Mar 31, 2010
The Directors have pleasure in presenting this SIXTY THIRD ANNUAL
REPORT along with the audited Statement of Accounts for the year ending
31st March, 2010.
FINANCIAL RESULTS :
(Rupees in lakhs)
This Year Previous Year
Sales 58203.08 62330.14
Other Income 2943.39 3173.08
61146.47 65503.22
Profit for the year 13481.84 10156.59
Depreciation 3490.74 3341.71
Profit after depreciation 9991.10 6814.88
Add: Income Tax refund received 2.67 1.65
Excess provision of
Income-tax credited back 18.97 12.37
10012.74 6828.90
Provision for Current Tax 2700.00 1900.00
Provision for Fringe Benefit Tax --- 20.00
Provision for Deferred Tax 633.09 377.33
Provision for Wealth Tax 4.00 4.00
Profit after Tax 6675.65 4527.57
Add: Balance brought
forward from last year 5658.61 3460.66
Profit available for appropriation 12334.26 7988.23
APPROPRIATIONS:
Transfer to General Reserve 670.00 460.00
Proposed Dividend on Equity
Shares at Rs 5/- per share 1355.35 1626.43
(Last Year Dividend on
Equity Shares at Rs. 6/- per share)
Tax on distributable profits 184.54 243.19
Balance carried forward to next year 10124.37 5658.61
12334.26 7988.23
PERFORMANCE:
For the year ended 31st March, 2010 sales is Rs. 582.03 Crores against
Rs. 623.30 Crores last year. Profit after depreciation is Rs. 99.91
Crores against a Profit of Rs. 68.15 Crores last year. Profit after tax
is Rs. 66.76 Crores against Rs. 45.28 Crores achieved last year.
Overall improved performance resulted in an increase in profit.
DIVIDENDS:
For 2008-09 a Dividend of Rs. 6/- per Equity Share was paid. Your
Directors recommend a Dividend of Rs. 5/- per Equity Share (on
2,71,07,078 Equity Shares of Rs. 10/- each) for the year 2009-10. The
out-flow towards Dividend payment including tax on distributable
profits would be Rs. 15.40 Crores. This Dividend, if approved by the
Shareholders, will be paid to all the eligible Shareholders.
CAPITAL & RESERVES:
Authorised and Paid-up Capital:
As on 31.3.2010, the Authorised Capital of the Company is Rs.30 Crores
and the Paid-up Capital is Rs. 27.11 Crores.
Reserves:
wITH THE TRANSFER OF rS.6.70 cRORES DURING THE YEAR UNDER REPORT, THE
TOTAL rESERVES AS ON 31.3.2010 STOOD AT Rs. 350.22 Crores against Rs.
298.86 Crores on 31.3.2009.
REVIEW OF OPERATIONS:
SUGAR UNITS:
The three Sugar Units in aggregate crushed 3,15,163 MT of cane during
the 2009-10 season against 4,41,469 MT crushed last year. The crushing
operations and cane price paid to cane suppliers for the 2009-10 season
are:
SUGAR UNIT - I S UGAR UNIT - II
TANUKU TADUVAI
Fin. Year Fin. Year Fin. Year Fin. Year
2009-10 2008-09 2009-10 2008-09
(A) Crushing details:
Total cane crushed (MT) 1,26,565 2,02,194 1,16,870 1,34,305
Total No. of days
crushed 47 80 42 72
Total Sugar
produced (MT) 11,634 20,790 14,464 14,752
Average Recovery 8.83% 10.22% 10.52% 10.94%
(B) Cane price:
Fair & Remunerative
price (per MT) Rs. 1394.30 955.80 1490.20 1036.80
Cane price paid
(per MT)* Rs. 1980.00 1500.00 1980.00 1500.00
SUGAR UNIT-III BHIMADOLE
Fin. Year Fin. Year
2009-10 2008-09
(A) Crushing details:
Total cane crushed (MT) 71,728 1,04,970
Total No. of dayscrushed 43 68
Total Sugar produced (MT) 7,930 10,877
Average Recovery 9.61% 10.35%
(B) Cane price:
Fair & Remunerative 1421.17 982.80
price (per MT) Rs.
Cane price paid 1980.00 1500.00
(per MT)* Rs.
* inclusive of Purchase Tax of Rs.60/- per MT
- The decrease in cane crush is mainly due to farmers shifting to other
crops and due to severe harvesting labour shortage.
- Recovery achieved was lower compared to recovery achieved last
season.
- In view of the need to have the cane farmers continue to plant cane,
your Company opted to pay a cane price higher than the Fair &
Remunerative Price fixed by the Government.
- Sugar sales realisation was better compared to last year.
POWER GENERATION :
During the year under report the Co-generation Unit at Taduvai
generated 72,91,780 Units of power against 94,15,660 Units generated
last year. The Power generated through Co-generation is comparatively
lower than last year due to lower quantity of cane crushed.
PERFORMANCE OF CHEMICAL DIVISION:
Performance of the Chemical Division continues to be impressive with
satisfactory capacity utilisation being achieved. The Caustic Soda Unit
at Saggonda achieved a profit of Rs. 78.16 Crores (after depreciation)
against Rs. 51.85 Crores (after depreciation) achieved last year.
Performance of other Chemicals has also been good.
WIND POWER UNITS:
The Power generated at the Ramagiri Wind Farm during the year was
24,35,100 Units against 21,96,500 Units generated last year.
The Power generation at the Tamil Nadu Wind Farms during the year under
report is 1,97,96,480 Units against 1,78,93,350 Units of last year.
PROJECTS:
Due to the advantage of economy of scale and diversification, your
Company continues to focus its strategy on an expansion and
diversification programmes.
A 400 TPD Caustic Soda Plant is in operation at Saggonda. Out of the
400 TPD, 300 TPD is using the energy efficient UHDE Technology and 100
TPD was using the DENORA Technology. This 100 TPD is now being
converted to the energy efficient UHDE Technology. The required
machinery has arrived at the site. The cost of this replacement is
being financed partly by way of term loan and partly through internal
generation. This replacement would result in considerable energy
saving. This replacement is expected to be completed during the current
financial year.
A Hi-strength Hypo Plant to produce Calcium Hypo Chlorite is proposed
to be set up at Saggonda. Chlorine which is the main raw material for
this product will be internally sourced. This product is extensively
used in Water Treatment Plants, Aqua Culture, Dairy, Textile, Leather,
Paper and host of other Industries.
The Poly Aluminium Chloride Plant commenced production in June, 2010.
Consent for Establishment from the A.P. Pollution Control Board has
been received. Chlorine, which is the main raw material for this Plant
will be internally sourced to produce this product. Poly Aluminium
Chloride is extensively used in Water Purification, Waste Water
Treatment and Sugar plants and has emerged as a better substitute to
Alum as a clarification agent.
The Potassium Carbonate Plant at Tanuku commenced commercial production
in the last week of March, 2010. Consent for Operation has been
received. Potassium Hydroxide Lye, the main raw material for this Plant
is being sourced internally from our Plant at Kovvur. Glass, Pharma,
Food, Detergents and Cleaners, Gas Purification and Textile Industries
are the end users of this product. This product has been approved by
major customers.
Your Company has received environmental clearance for its planned
expansion of the Caustic Potash Plant, Hydrochloric Acid Plant, Sodium
Hypo Plant, Mono Chloro Acetic Acid Plant and Single Superphosphate
Plant.
Your Company purchased land at the Jawharlal Nehru Pharmacity,
Visakhapatnam for the production of Bulk
Drugs. The registration of the land purchased has been completed and
possession has been taken. Feasibility study is being done to identify
a suitable Pharma product to be produced at this site.
Your Company has established two more Wind Mills at Kundadam village in
Tamil Nadu in addition to the Wind Mills at Ramagiri in Ananthapur
District of Andhra Pradesh and at the villages of Annaikulam and
Kurichanpatti in Tirunelveli District of Tamil Nadu. The Tirunelveli
Wind Farms has been registered as a CDM Project with the United Nations
Framework for Climatic Change Control (UNFCC). The two new Wind Mills
installed at Kundadam village have been commissioned and action has
been initiated to avail the CDM benefits for these units also.
Power constitutes one of the major inputs for the Chemical Plants at
Kovvur and Saggonda. Your Company proposes to set up a Gas Based Power
Project at Saggonda. Necessary application has been made for the
allotment of the required quantities of natural Gas.
With the receipt of approvals from the Ministry of Environment and
Forests and the State Pollution Control Board, Sugar Unit III at
Bhimadole will be expanded to 6000 TCD capacity in two phases.
These Projects are expected to strengthen your Companys product range,
accelerate growth and improve revenue generation.
CURRENT YEAR OUTLOOK:
For the first quarter of 2010-11 profit (after tax) was lower at Rs.
510.40 lakhs compared to a profit of Rs. 1287.50 lakhs achieved during
the corresponding quarter of last year. The lower profitability has
been due to decrease in the selling price of sugar. The prices of
Chloro Alkali products have also been on the decline. This downward
trend may have a considerable impact on the Companys overall
profitability during the current financial year.
DEMATERIALISATION OF EQUITY SHARES:
As of 31st March, 2010 Equity Shares representing 39.36% of the Share
Capital have been dematerialised.
DIRECTORS RESPONSIBILITY STATEMENT:
Your Directors confirm:
i. that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed, in the opinion of the Board of
Directors.
ii. that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
responsible and prudent so as to give a true and fair view of the state
of affairs of the st Company at the end of the Financial Year ended 31
March, 2010 and of the profit of the Company for that year;
iii. that the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that the Directors have prepared the Annual Accounts on a going
concern basis.
CORPORATE GOVERNANCE:
As per the amended provisions of the Listing Agreement, a Report on
Corporate Governance along with Management Discussion and Analysis
forming part of the Directors Report is annexed.
COMPLIANCE CERTIFICATE OF THE AUDITORS:
The Statutory Auditors have certified that the Company has complied
with the conditions of Corporate Governance as stipulated in the
Listing Agreement with the Stock Exchanges and the same is annexed to
the Report of Directors.
DIRECTORS:
In terms of Article 111 of the Articles of Association of the Company,
Directors Sri M. Narendranath, Sri P. Achuta Ramayya, Dr. P. Kotaiah
and Dr. A.V. Rama Rao retire by rotation at the 63rd Annual General
Meeting, and being eligible, offer themselves for re-appointment.
Appointment of Sri P. A. Chowdary, I.R.S. (Retd.) who was co-opted as
Additional Director on the Board is being placed for the approval of
the Shareholders at the 63rd Annual General Meeting.
Re-appointment of Sri P. Narendranath Chowdary as Joint Managing
Director for a further period of five years with effect from 12.01.2011
is being placed for the approval of the Shareholders at the 63rd Annual
General Meeting.
AUDIT COMMITTEE:
Audit Committee comprises of 3 non Whole-time Independent Directors Sri
A. Ranga Rao, Dr. P. Kotaiah and Sri V.S. Raju. Sri A. Ranga Rao is the
Chairman of the Committee.
INDUSTRIAL RELATIONS:
The relations with the employees continue to be cordial and harmonious
during the year under report.
SAFETY, HEALTH AND ENVIRONMENT:
Safety, Occupational Health and Environment Protection continue to be
accorded high priority.
PARTICULARS OF EMPLOYEES:
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, regarding employees is given in Annexure ÃAÃ
forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
Information pursuant to 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 given in Annexure ÃBÃ forming part
of this Report.
FIXED DEPOSITS:
Fixed Deposits aggregating to Rs. 36.79 lakhs held by 74 depositors had
fallen due for payment but remained unclaimed as on 31.3.2010.
Unclaimed deposits aggregating to Rs. 15.84 lakhs held by 33 depositors
have since been renewed/repaid. Still, deposits aggregating to Rs.
20.95 lakhs held by 41 depositors remained unclaimed as on date.
CONSOLIDATED ACCOUNTS:
In accordance with the Accounting standards, consolidated financial
statements of the Company and its Subsidiaries form part of the Report
and Accounts. These consolidated statements have been prepared on the
basis of audited results received from the Subsidiary Companies as
approved by their respective Boards.
Central Government vide its letter No. 47/547/2010-CL-III dt.10-6-2010
has accorded its consent under the provisions of Section 212(8) of the
Companies Act, 1956 exempting your Company from attaching the Accounts
of its Subsidiaries to its Accounts for the year 2009-10. Shareholders
desirous of obtaining the Annual Accounts of the Subsidiaries may
obtain the same upon request. The Annual Report and the Accounts of the
Subsidiary Companies will be kept for inspection at the Companys
Registered Office as well as at the offices of your Subsidiary
Companies.
SUBSIDIARY COMPANIES:
JOCIL LIMITED:
For the Financial Year ended 31.3.2010, your subsidiary Company, JOCIL
Ltd., recorded a profit of Rs. 3207.01 lakhs (before taxation) against
Rs. 1521.05 lakhs (before taxation) last year. Due to the impressive
performance of this Subsidiary, their Board of Directors recommended a
Dividend of Rs. 10/- per share (against a Dividend of Rs. 8/- per share
paid last year) which was approved by the Shareholders at the Annual
General Meeting held on 7th August, 2010.
THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:
During the year under report 68 MTs of Hydrazine Hydrate was produced
against 70 MTs last year. The Company achieved a sales of Rs. 207 lakhs
against Rs. 214 lakhs and incurred a loss of Rs. 16.21 lakhs against
the loss of Rs. 23.15 lakhs last year.
HINDUSTAN ALLIED CHEMICALS LIMITED:
The Directors are on the look out for a suitable project to be taken up
by the Company.
AUDITORS:
M/s Brahmayya & Co., Chartered Accountants, Vijayawada, the present
Auditors, retire at the 63rd Annual General Meeting and are eligible
for re-appointment.
COST AUDITORS:
M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad are appointed
as Cost Auditors of the Company for the products, which are subject to
Cost Audit, for the year ended 31-3-2010.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation of the
co-operation extended by the State and Central Government authorities,
Financial Institutions and Banks. They also express their appreciation
to the employees at all levels for the successful working of the
Company.
Venkatarayapuram For and on behalf of the Board
TANUKU - 534 215 Dr. MULLAPUDI HARISCHANDRA PRASAD
9-08-2010 Chairman & Managing Director
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