DIRECTOR'S REPORT Dear Shareholders, Your directors are pleased to present the Twenty Sixth Annual Report and the Audited Financial Statements for the financial year ended 31st March, 2015. 2.Operational Highlights & Future Prospects Your Directors had, in the last report, informed the members that Hon'ble BIFR, vide its order dt. 15/01/2014, had sanctioned merger of erstwhile Premier Industries (India) Ltd.(Transferor Company) with our company ie, Girdharilal Sugar And Allied Industries Ltd. (Transferee company) with all Assets and Liabilities at its fair value w.e.f. 01/04/2013. The company has since complied with most of the requisite formalities. The current financial year was overall favorable for the company, mainly for the Dairy business. During the year under consideration the company's turnover and other receipts stands at Rs. 13656 Lacs as against Rs.6676 Lacs achieved during last year. The year ended with a net profit of Rs.325 Lacs after considering interest, depreciation and deferred tax as against Net loss of Rs.243 Lacs in the previous year. During the year the Company has processed 18802 MT of Soya been seed as against 1220 MT in the previous year. Similarly, the company has refined 92 MT of crude oil in its Refinery as against 478 MT in the previous year. The Soya Division recorded a net turnover and other receipts of Rs.6480 Lacs as against Rs. 1978 Lacs in the previous year. In Dairy division the company has processed 18093 Kl of Milk and 748 Mt of S.N.F. (including 5881 Kl of Milk on job work basis) as against 9689 Kl of milk and 353 Mt of S.N.F/Fat in the previous year (Including Nil Kl on job work basis) and has achieved a turnover of Rs.7176 Lacs as against Rs.4698 Lacs achieved in the previous year. The Soya Industry continues to underperform during this year. The price of soya been continues beat a higher level due to huge demand and speculative tendency. On the other hand, the realization of soya oil as well as soya De-oiled cakes was subdued due to import of oil and depressed market conditions. Moreover, the cost of other inputs and consumables had increased. This resulted in disparity in the operations. However, the Dairy operations were quite favorable during the year. The company has achieved satisfactory capacity utilization by processing milk for self as well as on behalf of other reputed parties mainly Govt, milk federations. Your Directors may inform that the Company's programme for modernization of Plant & Equipments of both Soya and Dairy Division including Boiler etc.has completed during this financial year i.e. by the end of May 2015. The modernization program will result in net saving in cost of production. The Company further expects to stabilize soya and dairy operations in the current year. All these measures will improve the bottom-line of the Company in the near future. During the year the company has closed its corporate office at 106/107 Chetak Centre, R.N.T.Marg, Indore due to administrative reasons and is now operating from its registered office cum factory premises at 45/47 A Industrial Area No. 1, Agra Bombay Road, Dewas (M.P). 3.Share Capital During the year, the company has issued 578887 fully paid up equity shares of Rs.10/each, aggregating to Rs.5788870 to the shareholders of Premier Industries (India) Ltd.(Tranferor Company) in the ratio of 1:10(one share for every 10 share held by shareholders in Premier Industries (I) Ltd.).in terms of BIFR order dt. 15/01/2014. The company has already made application to BSE/CDSL for listing/admission of aforesaid 578887 shares and expects to get their approval shortly. 4. Dividend Due to financial prudency, no dividend is declared. 5. Directors During the year, Smt. Sangeeta Agrawal (DIN 00419726) was appointed as Additional Women Director w.e.f. 18.03.2015 of the Company by the Board in terms of Section 161 of the Companies Act, 2013. She holds office up to the date of the ensuing Annual General Meeting of the Company. The Company has received notice in terms of Section 160 of the Companies Act, 2013 for appointment of Smt. Sangeeta Agrawal as Director liable to retire by rotation. Shri Rajesh Agrawal (DIN: 00107009) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. All the appointments of the Directors of the Company are in compliance with the provisions of Section 164 (2) of The Companies Act, 2013. 6. Deposits During the year under review, your Company has not accepted any fixed deposits under Section 73 of the Companies Act, 2013. 7. Fixed Assets During the year the company has started implementing the modernization programme in terms of BIFR order dt 15/01/2014 for which Canara Bank has sanctioned and disbursed Term Loan. Till 31/03/2015 the company has incurred capital expenditure of Rs.1003 Lacs which is shown as Capital work in progress under the head Fixed Assets. Canara Bank has also disbursed Term Loan of Rs.720 Lacs till 31.03.2015. The Fixed Assets are adequately insured. 8. Management Discussion and Analysis The Management's Discussion and Analysis of operations for the year under review, as stipulated under clause 49 of the listing agreement with the stock exchanges, is provided in annexure attached to this report. 9. E-Voting Facility The Company has also taken steps for providing e-voting facility to the shareholders of the company and are in the process of complying with necessary formalities in this regard. 10. Appointment of Cost Auditor As per the Companies (Cost Records and Audit) Rules, 2014 the Company has appointed M/s. M.Goyal & Co., Cost Accountants, Indore (M.P.), as the Cost Auditors for the purpose of conduct of Cost Audit of the Cost Accounting Records of the Company for the Financial Year 2015-2016 11. Directors' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii. they 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 and of the profit of the Company for that period; iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. they have prepared the annual accounts on a going concern basis; v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15. 12. Number of meetings of the board Six meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. 13. Board evaluation The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. 14. Audit committee The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 15. Auditors The Company's Statutory Auditors, M/S. M. Mehta & Co. Chartered Accountants, Indore (MP.) will retire at the ensuing Annual General Meeting of the company and being eligible offers themselves for re-appointment. The Company has received a certificate from M/s. M. Mehta & Co to the effect that their appointment, if made, would be within the limits prescribed under Section 141 of The Companies Act, 2013. The Board of Directors recommends to the shareholders the appointment of M/s. M. Mehta & Co as Statutory Auditors of the Company. 16. Auditors' report Your Directors would like to provide following clarification on points mentioned in the Auditors Report. A. Under Qualified Opinion The Company has not provided for liabilities for Minimum Alternate Tax (MAT) under Income Tax Act, 1961 as the company of the opinion that- a) That the Board for Industrial and Financial Reconstruction (BIFR), vide its order dated 15/01/2014, had ordered for merger of Premier Industries (Transferor Company) with Girdharilal Sugar And Allied Industries Limited (Transferee Company) with all its Assets and Liabilities. b) That the BIFR had provided in its order several reliefs and concessions to the merged company (GSAIL). Accordingly to clause-16.7 of Relief & Concessions, BIFR has directed CBDT to consider "to exempt/grant relief to the company form the provisions of Section 41(1), 45,72(3), 43B, 79,80 read with 139, 115JB and provisions of Chapter-XVII of the Income Tax Act." c) That the company in the meanwhile decided to approach the concerned Income Tax authorities for granting aforesaid relief under various Sections/Chapter of income Tax Act. B. Under Emphasis on matters 1) As regards interest on loans given to related party, your Directors would like to clarify that the said related party is a sick company since 2002, registered with BIFR as Case No.449/2002 and are facing severe liquidity crunch. The said related company had approached to our company for waiver of interest for this financial year and for earlier financial year. Your Directors in their meeting had considered the request and agreed for waiver thereof in view of precarious liquidity crunch in the said related company 2) Various unpaid/undisputed liabilities relates to the transferor company i.e. Premier Industries (I) Ltd., which was sick industrial company since 1999. The company is of the opinion that it will enjoy waiver of interest on payment of those liabilities in view of its BIFR status as well as Relief Undertaking status which is likely to be granted by State Government of MP in due course in terms of BIFR order. 17. Secretarial auditors' report Secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report 18. Particulars of loans, guarantees and investments The particulars of loans, guarantees and investments have been disclosed in the financial statements. 19. Transactions with related parties The transaction with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in the Financial Statement. 20. Extract of annual return As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure II in the prescribed Form MGT-9, which forms part of this report. 21. Particulars of employees The Company has not paid any remuneration attracting the provisions of the Companies Act, 2013 under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 22. Disclosure requirements As per Clause 49 of the listing agreements entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached, which form part of this report. The Company has formulated a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges 23. Code of conduct The Board has laid down a code of conduct for all Board members and Senior Management personnel of the Company. Board members and senior management personnel have affirmed compliance with the said code of conduct for the financial year 2014-15. 24. Listing The equity shares of the Company are listed with Bombay Stock and efforts are being made to lift the suspension of trading in NSE. 25. Conservation of Energy, Research and Development, Technology Absorption, Foreign exchange Earning and outgo Conservation of Energy, Research and Development, Technology Absorption, Foreign exchange Earning and outgo The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earning and outgo as required by section 134 (3m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in Annexure-1 and forms part of this report. 26. Corporate Governance The Company has been practicing the principles of good Corporate Governance during the year. As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditors certificate on corporate governance form part of the Annual Report. Your Company is also following the Secretarial Standard norms issued by the Institute of Company Secretaries of India (ICSI). 27. Acknowledgement Your Directors place on record their sincere appreciation for significant contribution made by employees through their dedication, hard work and commitment. Your Directors also acknowledge the support extended by the bankers, government agencies, shareholders and investors at large and look forward to receive the same support for our endeavor to grow consistently. FOR AND ON BEHALF OF THE BOARD RAJESH AGRAWAL CHAIRMAN & MANAGING DIRECTOR Place: DEWAS (M.P.) Date: 31st July, 2015 |