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Balrampur Chini Mills Ltd.

BSE: 500038 Sector: Agri and agri inputs
BSE 13:03 | 20 Jul 63.05 0.35






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OPEN 61.70
VOLUME 104116
52-Week high 182.50
52-Week low 58.80
P/E 6.51
Mkt Cap.(Rs cr) 1,440
Buy Price 63.00
Buy Qty 1978.00
Sell Price 63.10
Sell Qty 16.00
OPEN 61.70
CLOSE 62.70
VOLUME 104116
52-Week high 182.50
52-Week low 58.80
P/E 6.51
Mkt Cap.(Rs cr) 1,440
Buy Price 63.00
Buy Qty 1978.00
Sell Price 63.10
Sell Qty 16.00

Balrampur Chini Mills Ltd. (BALRAMCHIN) - Director Report

Company director report

for the year ended 31st March 2017

Dear Shareholders

Your Directors have the pleasure of presenting their report as a partof the 41st Annual Report along with the Audited Accounts of the Company for theyear ended 31st March 2017.

Financial Results

The financial results of the Company are summarised below:

(Rs in Lacs)
Particulars Standalone Consolidated
2016-17 2015-16 2016-17 2015-16
Revenue from operations 364099.71 287406.77 364099.71 287406.77
Profit before finance costs tax depreciation and amortisation exceptional items and other comprehensive income 89451.32 45744.95 89409.73 45742.25
Less: Finance costs 5542.80 6654.53 5542.80 6654.53
Less: Depreciation and amortisation expense 10493.71 11010.52 10502.84 11019.71
Profit before tax 73414.81 28079.90 73364.09 28068.01
Add: Share of profit of associate - - 127.43 -
Less: Exceptional items - 17310.41 - 17310.41
Less: Tax expense 14186.16 743.28 14215.56 743.28
Profit for the year 59228.65 10026.21 59275.96 10014.32
Other comprehensive income (net of tax) (362.95) (37.69) (362.92) (37.69)
Total comprehensive income for the year 58865.70 9988.52 58913.04 9976.63

Dividend and its Distribution Policy

The Board of Directors of the Company declared an interim dividend of350% (i.e. Rs 3.50 per share on Equity Shares of the face value of Rs 1/- each) forthe financial year ended 31st March 2017. Total outgo on the interim dividend was Rs10320.17 Lacs (including dividend distribution tax of Rs 1745.58 Lacs). The Board hasnot proposed any final dividend for the financial year ended 31st March 2017 andaccordingly the interim dividend paid during the year shall be treated as final dividend.

Since the Company is one of the top 500 listed entities based on marketcapitalisation (calculated as on 31st March of every financial year) pursuant toRegulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 as amended by the SEBI (Listing Obligations and Disclosure Requirements) (SecondAmendment) Regulations 2016 the Dividend Distribution Policy as adopted by the Board atits meeting held on 11th February 2017 has been annexed to this Report as Annexure - Iand the same is also available on the website of the Company at the following web-link: Policyfi2017.pdf


The operational data of the Company for the last two sugar seasons andfinancial years are as under:

Particulars Sugar season Financial year
2016-17 2015-16 2016-17 2015-16
Sugarcane crushed (in lac quintals) 838.54 703.87 794.65 742.56
Sugar produced (in lac quintals) 90.01 78.35 84.70 82.15
Recovery (%) 10.74 11.13 10.66 11.06

Industry scenario and outlook

The sugar season 2016-17 started with a carry-forward stock of 77.5 lactonnes of sugar and perception of lower production due to a shortage of cane outputspecifically in the Deccan Plateau region (including Tamil Nadu). Production estimateswere revised multiple times at the industrial as well as the ministerial levels andfinally the country ended with a little higher than 200 lac tonnes of sugar.

Production levels in Maharashtra ended at around 42 lac tonnes whichwas just half of its 2015 production whereas Karnataka ended at around 20.5 lac tonnes.However it was because of an increase in production in Uttar Pradesh the pan-Indiafigures managed to cross the 200 lac tonnes mark. State-wise production figures show thatUttar Pradesh stood as the largest sugar producing state in the country producing almost87.5 lac tonnes sugar. The reason behind this growth was the adoption of new varieties ofcane resulting in higher yields and recovery rates as well as prompt cane price paymentsin last year which incentivised farmers across the state for sowing more cane. In thefirst half of the current sugar season (2016-17) sugar dispatched by mills into thedomestic market was almost a million tonne lower than last year.

This decline in demand was attributed to a lower offtake on account ofdemonetisation. Demand during the second half is expected to pick up by atleast 50% ofwhat it lost during the first half thus resulting in a total demand of around 243 lactonnes. In the wake of the lower production levels in Maharashtra and South India theCentral Government assessed the overall demand and supply position and in order to ensurea comfortable sugar stock at the end of the sugar season allowed duty free import of 5 lactonnes of raw sugar. This decision of the Central Government was pragmatic in the sensethat it addressed the regional imbalances of sugar inventory prevalent in the differentparts of the country.

Hence after considering the aforementioned imported stock India mayend the sugar season with a closing stock of 40 to 45 lac tonnes. Ex-mill sugar prices inUttar Pradesh remained within the range of Rs 3450 and Rs 3750 per quintal. As far asthe next season is concerned higher acreage and optimal monsoons indicates productionlevels to be at par with consumption levels thus paving the way for a well-balancedmarket in the days to come marked by stabilised sugar prices with a slightly upward bias.

Global sugar production levels are expected to report a surplus statusfollowing a brief period of deficit with Brazil Thailand and even China eithermaintaining current production levels or generating a slight increase. A major increase inproduction is expected from the Eurozone. 2017-18 MY will mark the first year during whichthe EU countries will come out of the five decade-long production quota and export limitregime. Post the announcement of the abolition of the sugar quota (slated to come intoeffect on 1st October 2017) beet plantation has increased substantially. Sugarproduction is expected to reach around 19 million tonnes in 2017-18 and the EU is expectedto emerge as a net 2 million tonnes exporter from being a net importer.

BCML's performance during 2016-17

Revenue from operations of the Company during the year ended 31stMarch 2017 improved to Rs 364099.71 Lacs as compared to Rs 287406.77 Lacs for theyear ended 31st March 2016 – an increase of 26.68% driven by improved sugarrealisations. Sugar recovery lowered slightly to 10.66% during the financial year ended31st March 2017 compared to 11.06% in the previous year. The other segments i.e.distillery and cogeneration delivered steady performances. The Company earned a totalcomprehensive income of Rs 58865.70 Lacs during the year ended 31st March 2017 comparedto Rs 9988.52 Lacs in the previous year.

Segment-wise performance and outlook Sugar

During the year sugarcane crushing activities started earlier thanusual which enabled the Company to crush a higher quantity of cane compared to last year.Sugarcane crushed during the year stood at 794.65 lac quintals as compared to 742.56 lacquintals in the previous year. Recovery lowered to 10.66% as compared to 11.06% achievedduring the previous year owing to weather conditions which were not completely conducive.The Company has been working closely with farmers to increase the sowing of early varietyof sugarcane which would enable the Company to crush more cane and improve recovery ratesgoing forward. The Company is providing farmers with necessary agri-inputs for increasingtheir farm yields and improving clean cane quality. Steps have also been taken to educatecane growers on modern agricultural practices.

During the year the Company sold 79.74 lac quintals of sugar at anaverage realisation of Rs 35.90 per kilogram as against 80.70 lac quintals at an averagerealisation of Rs 27.06 per kilogram in the previous year.


The Company's distillery segment performed satisfactorily. TheCompany produced 721.58 lac bulk litres of alcohol during the year ended 31st March 2017as against 705.55 lac bulk litres during the previous year. Sales during the year was691.80 lac bulk litres as compared to 647.49 lac bulk litres during the previous year.Ethanol sales constituted 99.5% of the revenues generated by the segment during the yearas compared to 86.9% during the previous year. During the year under review the prices ofethanol remained remunerative. The average realisation per bulk litre stood at Rs 42.55 asagainst Rs 40.41 per bulk litre in the previous year. The Company successfullycommissioned incinerator boilers at all of its three distilleries in order to achieve azero liquid discharge status.

This initiative coupled with higher availability of molasses due toenhanced crushing levels as mentioned above would enable the Company to better utilise itsdistillery capacities. With the thrust laid by the Central Government on the EthanolBlending Programme the Company foresees increased demand from oil marketing companiesduring the current year. The Central Government has fixed the supply price of ethanol atRs 39 per litre for the period between December 2016 and November 2017.


The performance of the cogeneration segment remained stable during theyear. Total power generated during the year stood at 7537.41 lac units compared to7469.14 lac units in the previous year. Power exported to the Uttar Pradesh PowerCorporation Limited stood at 5104.93 lac units as against 5307.41 lac units in theprevious year. The average realisation per unit stood at Rs 4.81 as against Rs 4.77 perunit in the previous year. The Company also sold 1.98 lac renewable energy certificatesduring the year resulting in gross proceeds worth Rs 2977.17 Lacs. Going forward thepower generation capacities are expected to improve their utilisation levels due to agreater availability of bagasse resulting from higher amounts of cane crushed.

Organic Manure

Following the discontinuation of the organic manure division the spentwash generated during the distillation process is being used as fuel for incineratorboilers.

A detailed analysis of the Company's operations futureexpectations and business environment has been given in the Management Discussion &Analysis Report which forms a part of this Report.

Governmental policies related to the sugar industry

The salient features of the major policies relating to the sugarindustry are as under: The Central Government announced the FRP (Fair & RemunerativePrice) for sugarcane for the sugar season 2016-17 to be Rs 230 per quintal and Rs 255 perquintal for the sugar season 2017-18 (linked to a basic recovery of 9.50% and subject to apremium of Rs 2.68 per quintal for every 0.1% increase in recovery above that level).

The Government of Uttar Pradesh increased the State Advised Price (SAP)of sugarcane for the sugar season 2016-17 from Rs 280 per quintal to Rs 305 per quintalfor the normal variety of sugarcane. In addition society cane commission and sugarcanepurchase tax of Rs 4.50 and Rs 2.00 per quintal of sugarcane respectively were levied.

The Central Government allowed imports upto 5.00 lac tonnes of rawsugar at zero duty to address the regional imbalances of sugar inventory in the country.

The Central Government fixed the supply price of ethanol at Rs 39 perlitre for the period between December 2016 and

November 2017.

Impact of GST

The GST Council has met substantial demands of the industry and henceit is unlikely that GST shall pose any hindrance to the industry. A comparative table ofthe proposed GST rates vis--vis the existing rates are placed hereunder :

Sl. No. Commodity Rates under Central Excise GST Rates Remarks
1. Sugar cane - Nil State Government-levied purchase tax will be subsumed
2. Sugar Basic @ Rs 71 per quintal Sugar Cess @ Rs 124 per quintal [effective at an ad valorem rate of approximately 5.27%] 5% State Government-levied entry tax will be subsumed
3. Molasses @ H 75 per quintal [effective at an ad valorem rate of approximately 17%] 28% No impact on the Company as it enjoys captive usage of molasses
4. Ethyl alcohol @ 12.50 %/BL 18% State Government-levied purchase tax will be subsumed
5. Bagasse and Press mud Nil 5% No impact on the Company as it enjoys captive usage of bagasse
6. Electricity The present position has been maintained and the electricity has been kept out of the purview of GST

Subsidiary and Associate Companies

The Company's subsidiary Indo Gulf Industries Limited (IGIL)reported a net loss of Rs 50.72 Lacs for the year ended 31st March 2017 as compared to aloss of Rs 11.89 Lacs for the year ended 31st March 2016. During the year under reviewthe Company entered into a Share Purchase Agreement (SPA) inter alia with GaneshExplosives Private Limited (Acquirer) for sale and transfer of the entire shareholding(53.96%) in IGIL held by the Company subject to the compliance of Open Offer formalitiesunder the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 (asamended) by the Acquirer and conditions precedent in terms of the SPA. As on the date ofthis report the Open Offer formalities stand completed and the entire shareholding of theCompany in IGIL along with the control and management of the said company has beentransferred to the Acquirer.

During the year under review Visual Percept Solar Projects PrivateLimited (VPSPPL) became an associate company consequent to the acquisition of 45% equitystake of VPSPPL by the Company pursuant to the Call Option Agreement dated 30th March2015. Share of profit of the said associate company for the year ended 31st March 2017 isRs 127.43 Lacs.

Except the above no body corporate has become or ceased to be asubsidiary joint venture or associate company during the year.

Consolidated Financial Statements

In compliance with the provisions of the Companies Act 2013 (asamended) (the "Act") and implementation requirements of the Indian AccountingStandards Rules on accounting and disclosure requirements as applicable and as prescribedunder Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (as amended) (the "Listing Regulations") the AuditedConsolidated Financial Statements form part of this Annual Report.

Pursuant to Section 129(3) of the Act a statement in Form AOC-1containing the salient features of the financial statements of the Company'sSubsidiary and Associate companies is also provided in this Annual Report.

The audited financial statements of the Company including theconsolidated financial statements and related information of the Company and the auditedaccounts of the subsidiary are available on the website of the Company at annual accounts of the Subsidiary Company and the related detailed information shallbe made available to the members of the Company seeking such information at any point oftime. The annual accounts of the Subsidiary Company would be avaliable for inspection bythe members at the Company's Registered Office during business hours.

Share Capital

During the year under review the Company issued and allotted 60700equity shares of Rs 1 each at a price of Rs 45 per share (including premium of Rs 44 pershare) upon the exercise of 60700 options under the Employee Stock Option Scheme.Consequently the paid-up share capital of the Company increased to Rs 245010467consisting of 245010467 equity shares of Rs 1 each.

Buyback of Shares

Further during the year under review the Company sought approval ofthe shareholders to buy-back its equity shares through the "Tender Offer" routeusing the Stock Exchange Mechanism for an aggregate amount of upto Rs 17500 Lacs (being14.72% of the total paid-up equity share capital and free reserves of the Company as on31st March 2016) at a price of Rs 175/- per Equity Share on a proportionate basis inaccordance with the provisions contained in the Act rules made thereunder the SEBI (BuyBack of Securities) Regulations 1998 and other applicable circulars clarifications andnotifications. Details of the Postal Ballot process conducted to seek the aforesaidapproval of the shareholders are given in the Corporate Governance Report.

Post the Buyback of 10000000 equity shares the equity share capitalof the Company stood at Rs 235010467 consisting of 235010467 equity shares of Rs 1each as on 31st March 2017.

Employee Stock Option Scheme

The applicable disclosures as required under the SEBI Guidelines asamended and the details of stock options as at 31st March 2017 under the Employee StockOption Scheme 2005 are set out in the attached Annexure - II and forming part of thisReport.

Credit Rating

ICRA Limited - a Credit Rating Agency vide its letter dated 8thNovember 2016 revised the Credit Rating of the Company from [ICRA] A+ to [ICRA] AA- withrespect to long-term loans. Further ICRA Limited vide its letter dated 12th April 2017revised upwards the long-term rating of the Company from [ICRA] AA- to [ICRA] AA. Theshort-term rating was retained at [ICRA] A1+.

CRISIL - a credit rating agency vide its letter dated 26th May 2017has assigned the credit rating of the Company to CRISIL AA with respect to long-termloans. The short-term rating has been assigned at CRISIL A1+.


The members of the Company at the 40th Annual General Meeting held on12th August 2016 appointed Shri Sakti Prasad Ghosh and Shri Sumit Mazumder asIndependent Directors for a term of 5 (five) consecutive years ending on 30th September2020 and 30th April 2021 respectively in terms of Section 149 and other applicableprovisions of the Act.

The Board of Directors on the recommendation of the Nomination &Remuneration Committee appointed Shri Naresh Dayal as an Additional Director(Non-Executive Non-Independent Director) with effect from 15th November 2016.

By virtue of the provisions of the Articles of Association of theCompany and Section 161 of the Act Shri Naresh Dayal will vacate office at the ensuingAnnual General Meeting (AGM). The Board of Directors at its meeting held on 27th May2017 has recommended for the approval of the members the appointment of Shri Naresh Dayalas a Non-Executive Non-Independent Director of the Company liable to retire by rotationwith effect from the date of the ensuing AGM of the Company.

Notice under Section 160 of the Act has been received from a member ofthe Company proposing candidature of Shri Naresh Dayal.

During the year under review Smt. Meenakshi Saraogi informed theCompany about her decision to resign as a Director of the Company owing to herindifferent health. Accordingly with effect from the close of business hours on 15thNovember 2016 she has ceased to be a Director of the Company. The Board wishes to placeits sincere appreciation of the contributions made by Smt. Meenakshi Saraogi to thetremendous growth of the Company.

On the recommendation of the Nomination & Remuneration Committeethe Board of Directors of the Company at their meeting held on 11th February 2017 hasre-appointed Shri Vivek Saraogi as the Managing Director of the Company for a furtherperiod of 5 years with effect from 1st April 2017 subject to approval of the members atthe ensuing AGM.

The Board of Directors of the Company at their meeting held on 27thMay 2017 has re-appointed Dr. A. K. Saxena as a Whole-time Director of the Companyfor a further period of 5 years with effect from 1st August 2017 based on therecommendation of the Nomination & Remuneration Committee subject to approval of themembers at the ensuing AGM.

Director retiring by rotation

Dr. A. K. Saxena retires from the Board by rotation and being eligibleoffers himself for re-appointment.

Information regarding the directors seeking appointment/ re-appointment

Resume and other information regarding the directors seekingappointment / re-appointment as required by Regulation 36 of the Listing Regulations havebeen given in the Notice convening the ensuing AGM and in the Statement pursuant toSection 102 of the Act. The Board of Directors recommends the above appointment(s) /re-appointment(s).

None of the Directors of the Company are disqualified as per theapplicable provisions of the Act.

Other Information

Appointment of directors is made in accordance with the Policy onSelection & Remuneration of Directors Key Managerial Personnel and other employeesand on Board Diversity as recommended by the Nomination & Remuneration Committee andapproved by the Board of Directors.

Other details pertaining to the Directors their appointment /cessation during the year under review and their remuneration are given in the Extract ofAnnual Return annexed hereto and forming part of this Report.

The Executive Directors (including Managing Director and Whole-timeDirector) of the Company do not receive any remuneration or commission from the SubsidiaryCompany.

Declaration by Independent Directors

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence prescribedboth under the Act and Regulation 16 of the Listing Regulations.

Separate Meeting of Independent Directors

Details of the separate meeting of Independent Directors held in termsof Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in theCorporate Governance Report.

Directors' Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuringcompliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Actand Regulation 18 of the Listing Regulations in the preparation of the annual accounts forthe year ended 31st March 2017 and state that :

i. In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any;

ii. The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

iii. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.

Particulars of Employees

The particulars of employees as required under Section 197(12) of theAct read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 (as amended) are given in a separate annexure attached hereto as Annexure - III andforms part of this Report. During the year under review no complaint / case was filedpursuant to Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The particulars relating to the conservation of energy technologyabsorption and foreign exchange earnings and outgo as required under Section 134(3)(m) ofthe Act are given in Annexure - IV attached hereto and forming part of this Report.


The Company has not accepted any deposit from the public andconsequently there are no outstanding deposits in terms of the Companies (Acceptance ofDeposits) Rules 2014.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company are Shri Vivek Saraogi Managing Director Shri PramodPatwari Chief Financial Officer and Shri Nitin Bagaria Company Secretary. During theyear there has been no change in the Key Managerial Personnel of the Company.

Details pertaining to their remuneration have been provided in theExtract of Annual Return annexed hereto and forming part of this Report.

Board Meetings

The Board met 4 (four) times during the financial year under reviewthe details of which are given in the Corporate Governance Report attached to this Report.

Committees of the Board

Pursuant to various requirements under the Act and the ListingRegulations the Board of Directors has constituted various committees such as AuditCommittee Nomination & Remuneration Committee Stakeholders Relationship CommitteeCorporate Social Responsibility Committee Executive Committee and Share TransferCommittee. The details of composition terms of reference etc. pertaining to thesecommittees are mentioned in the Corporate Governance Report.

Audit Committee

All recommendations made by the Audit Committee during the year wereaccepted by the Board.

Whistleblower Policy

The Company has in place a Whistleblower Policy to deal with unethicalbehavior victimisation fraud and other grievances or concerns if any. Theaforementioned whistleblower policy is available on the Company's website at thefollowing web-link:

Policy on Selection and Remuneration of Directors

Based on the recommendation of the Nomination & RemunerationCommittee the Policy on Selection & Remuneration of Directors Key ManagerialPersonnel and other employees was revised and adopted by the Board of Directors at theirmeeting held on 11th August 2016. The said policy was made applicable w.e.f. 1stSeptember 2016 and is annexed as Annexure - V.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the ListingRegulations the Board has carried out the evaluation of its own performance and that ofits Committees as well as evaluation of performance of the individual directors. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report attached to this Report.

Corporate Social Responsibility

The CSR policy approved by the Board is available on the Company'swebsite at the following web-link:

The Annual Report on CSR activities is appended as Annexure - VI.

Inter-corporate Loans and Investments

Details of loans guarantees and investments covered under theprovisions of Section 186 of the Act are given in the notes to the financial statementsforming part of this Annual Report.

Related Party Transactions

There have been no materially-significant related party transactionsmade by the Company with the Promoters the Directors or the Key Managerial Personnelwhich may be in conflict with the interests of the Company at large. The Policy on RelatedParty Transactions as approved by the Board can be accessed on the Company's websiteat following web-link:

The details of related party transactions are set out in the notes tothe financial statements.

Risk Management Policy

The policy on risk assessment and minimisation procedures as laid downby the Board are periodically reviewed by the Audit Committee and the Board. The policyfacilitates in identification of risks at appropriate time and ensures necessary steps tobe taken to mitigate the risks. Brief details of risks and concerns are given in theManagement Discussion and Analysis Report.

Extract of Annual Return

Extract of Annual Return in Form MGT- 9 is annexed to this Report asAnnexure - VII.

Material Changes and Commitments

There are no material changes and commitments affecting the financialposition of the Company between the end of the financial year i.e. 31st March 2017 andthe date of this Report.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators /Courts / Tribunals which would impact the going concern status of the Company and itsfuture operations.

Internal Financial Controls

The Company has in place adequate internal financial controls withreference to the financial statements. During the year such controls were reviewed and noreportable material weakness was observed.

Corporate Governance

In terms of the provisions of Regulation 34(3) of the ListingRegulations the Management Discussion and Analysis the Corporate Governance Report andthe Certificate on the compliance of conditions of Corporate Governance form part of theAnnual Report and are given separately as Annexure - VIII.

Business Responsibility Report

Regulation 34(2) of the Listing Regulations inter alia provides thatthe annual reports of the top 500 listed entities based on market capitalisation(calculated as on March 31st of every financial year) shall include a BusinessResponsibility Report. Since the Company is one of the top 500 listed entities it haspresented its first Business Responsibility Report for the financial year 2016-17 asAnnexure - IX to this Report.


Statutory Auditors and their Audit Report

M/s. G. P. Agrawal & Co. Chartered Accountants were appointed asthe Statutory Auditors of the Company at the 40th AGM held on 12th August 2016 to holdoffice from the conclusion of that AGM till the conclusion of the 41st AGM to be held inthe year 2017. M/s. G. P. Agrawal & Co. Chartered Accountants would vacate office asthe Auditors of the Company at the conclusion of the ensuing AGM pursuant to theprovisions of Section 139(2)(b) of the Act to comply with the provision of compulsoryrotation of auditors. Pursuant to the applicable provisions of the Act on therecommendation of the Audit Committee of the Board it is proposed to appoint M/s. Lodha& Co. Chartered Accountants (Firm Registration No. 301051E) as the StatutoryAuditors of the Company to hold office from the conclusion of the 41st AGM until theconclusion of the 46th AGM. The Company has received a letter from M/s. Lodha & Co.confirming that they are eligible for appointment as Statutory Auditors of the Companyunder Section 139 of the Act and meet the criteria for appointment specified in Section141 of the Act. Necessary resolution for the appointment of M/s. Lodha & Co.Chartered Accountants as the Statutory Auditors is included in the Notice of the ensuingAGM.

The reports given by the outgoing Auditors M/s. G. P. Agrawal &Co. Chartered Accountants on the standalone and consolidated financial statements of theCompany for the year ended 31st March 2017 form part of this Annual Report and there isno qualification reservation adverse remark or disclaimer given by the Auditors in theirReports.

The Auditors of the Company have not reported any fraud in terms of thesecond proviso to Section 143(12) of the Act.

Secretarial Auditors and their Audit Report

Pursuant to the provisions of Section 204 of the Act the Company hasappointed M/s. MKB & Associates Company Secretaries to undertake the secretarialaudit of the Company for the financial year 2016-17. The Secretarial Audit Report for thefinancial year

2016-17 is attached as Annexure - X and forms part of this Report. TheSecretarial Audit Report does not contain any qualification reservation adverse remarkor disclaimer.

Cost Auditors and their Audit Report

The Cost Auditors (M/s. N. Radhakrishnan & Co. Cost Accountants)appointed by the Board have submitted the Cost Audit Report within the time limitprescribed under the Act and Rules made thereunder.

During the year under review pursuant to Section 148 of the Act readwith the Companies (Cost Records and Audit) Rules 2014 (as amended) the Board appointedM/s. N. Radhakrishnan & Co. Cost Accountants to conduct cost audit of the Companyrelating to sugar (including industrial alcohol) and electricity for the financial yearended 31st March 2017.

On the date of this Report your directors have on the recommendationof the Audit Committee appointed M/s. N. Radhakrishnan & Co. Cost Accountants asthe Cost Auditors of the Company for the financial year 2017-18. As required under theAct a resolution seeking ratification of the remuneration payable to the Cost Auditorsform part of the Notice convening the ensuing AGM.

Annexures forming part of this Report

The Annexures referred to in this Report and other information whichare required to be disclosed are annexed herewith and form part of this Report :

Annexure Particulars

I Dividend Distribution Policy

II Details of Employee Stock Option Scheme

III Particulars of Employees

IV Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

V Policy on Selection & Remuneration of Directors Key Managerial Personnel andother employees and on Board Diversity

VI Annual Report on CSR activities

VII Extract of the Annual Return as per Form MGT-9

VIII Corporate Governance Report and Management Discussion & Analysis

IX Business Responsibility Report

X Secretarial Audit Report


Your Board of Directors takes this opportunity to thank all thestakeholders – the Central Government the Government of Uttar Pradesh shareholderscustomers dealers State Bank of India HDFC Bank Punjab National Bank other banks andfinancial institutions and all other business associates for their excellent support. YourDirectors also wish to place on record their deep sense of appreciation for the committedservices by your Company's employees.

For and on behalf of the Board of Directors
Sd/- Sd/-
Dr. Arvind Krishna Saxena Vivek Saraogi
Place: Kolkata Whole-time Director Managing Director
Date: 27th May 2017 DIN – 00846939 DIN – 00221419