To the Members
The Board hereby presents its report for the year ended 31st March 2017.
1. Financial Performance
The Financial Summary and Highlights are given below. As the preceding period ended31st March 2017.
| || ||(Rs. in Lacs) |
| ||For the year ended March 31 2017 ||For the year ended March 31 2016 |
|Revenue from Operations and Other Income ||386750.49 ||28308.78 |
|Total Expenses ||34518.32 ||27596.87 |
|Profit/ (Loss) before Tax (PBT) ||4157.16 ||1.90 |
|Prior Period Items ||3.48 ||764.7 |
|Profit before Tax ||4153.69 ||312.38 |
|Tax Expenses: || || |
|Current Tax ||1500.03 ||312.38 |
|Earlier Year Tax ||(8.40) ||- |
|Wealth Tax ||- ||- |
|Deferred Tax charge/ (Credit) ||(72.54) ||144.37 |
|Profit/ (Loss) after Tax ||2734.60 ||596.74 |
2. Performance Review
Your company achieved turnover of Rs. 386750.49 lacs for the year ended March 31 2016and has earned a net profit of Rs. 28308.78 lacs during the year under review.
During the year under review your Company has crushed 10475594.15 QTLS ofSugarcane and produced 1044737 bags of Sugar as compared to previous year crushing of8678782 QTLS of sugarcane and production of 920662 bags of Sugar.
The capacity utilization of the plant during the year under review was 97.74% and theaverage recovery was 9.96% as compared to capacity utilization of 98.86 % and averagerecovery of 10.63 % in the previous year.
3. Dividend & Transfer to Reserves
No amount is proposed to be transferred to the reserve(s) and your Directors have notrecommended payment of any dividend for the year under review.
During the Financial year 2016-17 the Share Capital of the Company remains the same asthat of previous year 2015-16.
5. Risk Management Policy
Board has constituted a Risk Management Committee of the Board to assist the Boardwith regard to the identification evaluation and mitigation of operational strategic andexternal risks. Risk Management Committee works towards identifying internal and externalrisks and implementing risk mitigation steps. On quarterly basis status updates areprovided to the Board of Directors of the Company. More details on risks and threats havebeen disclosed in the section "Management Discussion and Analysis".
6. Adequacy of Internal Financial Controls With Reference to the FinancialStatements
The Company has adequate internal control procedures commensurate with its size andnature of business. The business control procedures ensure efficient use and protection ofCompany's resources and compliance with policies procedures and statutory requirements.Further Internal auditors are appointed to carry audit assignments and to periodicallyreview the transactions across the divisions and evaluate effectiveness of internalcontrol systems.
7. Vigil Mechanism:
The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b) direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases.
Mrs. Kunj Deep Kalra Non-executive Director shall retire at the ensuing Annual GeneralMeeting and being eligible offers herself for re-appointment.
During the year under review Mr. Prakash Chandra Gupta resigned from the office of anIndependent Director w.e.f. March 22 2017.
The brief resume of the Directors being appointed/re-appointed the nature of theirexpertise in specific functional areas names of companies in which they have heldDirectorship(s) Committee Membership(s)/ Chairmanship(s) their shareholding etc. isgiven in the section on Corporate Governance Report forming part of this Annual Report.
9. Key Managerial Personnel
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theAct are as follows:
|1. ||Mr. Kunal Yadav ||Managing Director |
|2. ||Mr. Ravinder Sharma ||CFO |
|3. ||Mr. Rishav Jaiswal ||Company Secretary |
During the year under review Mr. Rishav Jaiswal was appointed as the Company Secretaryand Compliance Officer of the Company with effect from May 30th 2016.
10. Subsidiary Associate and Joint Venture Companies
Rangar Breweries Limited is the only associate company of your Company and does nothave any subsidiary and joint venture companies. During the period under review noCompany became/ ceased to be a Subsidiary associate and joint venture Company of yourCompany.
During the year under review your Company has not accepted any deposits from thepublic falling under Section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014. Thus as on March 31 2016 there were no deposits which wereunpaid or unclaimed and due for repayment.
12. Transfer of Unclaimed Dividend to Investor Education and Protection Fund
The provisions of Section 125(2) of the Act do not apply as there was no dividenddeclared and paid by the Company.
13. Significant and Material Orders Passed by the Regulators or Courts or TribunalsImpacting the Going Concern Status and Company's Operations in Future
During the year under review there were no such orders passed by the regulators orcourts or tribunals impacting the going concern status and company's operations in future.
14. Declaration of Independence by Director
Pursuant to the provisions under Section 134(3)(d) of the Companies Act 2013 withrespect to statement on declaration given by Independent Directors under Section 149(6) ofthe Companies Act 2013 the Board hereby confirms that all the Independent Directors ofthe Company have given a declaration and have confirmed that they meet the criteria ofindependence as provided in the said Section 149(6) and relevant Regulation of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015
15. Familiarization programme for Independent Directors
All new Independent Directors (IDs) inducted into the Board are given an orientation.Presentations are made by Executive Directors (EDs) and Senior Management giving anoverview of the Company's operations to familiarize the new IDs with the Company'sbusiness operations. The new IDs are given an orientation on our products group structureand subsidiary company Board constitution and procedures matters reserved for the Boardand the Company's major risks and risk management strategy.
16. Nomination And Remuneration Policy
The Company follows a policy on nomination and remuneration of Directors and SeniorManagement Employees. The Policy is approved by the Nomination and Remuneration Committee.The policy on the above is attached as Annexure 1.
17. Board Evaluation
Pursuant to the provisions of companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out annual performanceevaluation of its own performance the directors individually as well the evaluation ofthe working of its Audit Nomination & Remuneration and Stakeholder committee. Themanner in which the evaluation has been carried out has been explained in CorporateGovernance Report.
18. Number of meetings of the Board
The Board met fourteen (10) times in the year ended 31st March 2017 viz. on 11th April2016 30th May 2016 13th August 2016 23rd August 2016 12th November 2016 12th December2016 09th January 2017 13th February 2017 and 14th March 2017 22nd March 2017. Themaximum interval between any two meetings did not exceed 120 days.
Details of the meetings of the Board along with the attendance of the Directors thereinhave been disclosed as part of the Corporate Governance Report forming part of this AnnualReport.
19. Committees of the Board
The Company's Board has the following committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
The details of the membership and attendance of the meetings of the above Committees ofthe board are provided in the Corporate Governance report.
20. Composition of Audit Committee
The composition of Audit Committee of the Company is as follows:
|1. Mr. Prakash Chandra Gupta ||Chairperson |
|2. Mr. Sheoraj Singh Ahlawat ||Member |
|3. Mr. Kunal Yadav ||Member |
21. Corporate Social Responsibility
CSR is a company's sense of responsibility towards the community and environment inwhich it operates. It is the continuing commitment by business to behave ethically andcontribute to economic development of the society at large and building capacity forsustainable livelihoods. The Company believes in conducting its business responsiblyfairly and in a most transparent manner. It continually seeks ways to bring about anoverall positive impact on the society and environment where it operates and as a part ofits social objectives. This policy has been formally formulated and adopted in terms ofSection 135 of the Act and Rules framed thereunder to undertake CSR activities. TheCompany has always made consistent efforts to maintain an active corporate socialresponsibility portfolio.
The Company has duly constituted CSR Committee comprising of Mr. Geoffery FrederickFrancis Mr. Sheoraj Singh Ahlawat and Mr. Kunal Yadav.
The responsibilities of the CSR Committee include:
1. Formulating and recommending to the Board of Directors the CSR Policy and indicatingactivities to be undetaken.
2. Recommending the amount of expenditure for the CSR activities.
3. Monitoring CSR activities from time to time.
As per the provisions of Companies Act 2013 all companies having a net worth of Rs.500 crore or more or a turnover of Rs. 1000 crore or more or a net profit of Rs. 5 croreor more during any financial year are required to constitute a CSR committee of the Boardof Directors comprising three or more directors at least one of whom should be anindependent director. All such companies are required to spend at least 2% of the averagenet profits of their three immediately preceding financial years on CSR-relatedactivities.
Accordingly the Company was required to spend 1.47 Lakh towards CSR activities whichis to be utilized on activities specified in Schedule VII of the Companies Act 2013.
Details of the CSR policy is available on our website www.muksug.com
22. Directors' Responsibility Statement
Your Directors hereby confirmed that:
(a) in the preparation of the Annual Accounts for the financial year ended March 312017 the applicable Accounting Standards have been followed along with proper explanationrelating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the profitand loss of the Company for the financial year;
(c) the director have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the directors have prepared the Annual Accounts on a going concern basis;
(e) The Directors have laid down internal financial controls to be followed by theCompany and these financial controls are adequate and are operating effectively; and
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
23. Particulars of Loans Guarantees or Investments Under Section 186 of the Act
During the year there were no loans and guarantees given under Section 186 of the Act.Particulars of investments have been disclosed as part of the financial statements of yourCompany for the year under review.
24. Particulars Of Contracts Or Arrangements With Related Parties Referred To InSub-Section (1) Of Section 188 Of The Act In The Prescribed Form
All contract(s) / arrangement(s) / transaction(s) entered into by your Company with itsrelated parties during the year under review were:
in "ordinary course of business" of the Company;
on "an arm's length basis"; and
as per the provisions of Section 188(1) of the Act read with Companies(Meetings ofBoard and its Powers) Rules 2014. Accordingly Form AOC-2 prescribed under theprovisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules2014 for disclosure of details of Related Party Transactions which are "not atarm's length basis" and also which are "material & at arm's lengthbasis" is not provided as an annexure of the Directors' Report.
25. Material Changes and Commitments affecting the financial position of the Company
There have been no material changes and commitments affecting the financial positionof the Company which occurred between the end of the financial year to which the financialstatements relate and the date of this report.
26. Significant and material orders passed by the regulators or courts
There are no significant material orders passed by the Regulators / Courts. Howeverwhich would impact the going concern status of the Company and its future operations.
M/s R. Dewan & Co. Chartered Accountants the Statutory Auditors of the Companyhold office until the conclusion of the ensuing Annual General Meeting and are eligiblefor reappointment. The Company has received letter from M/s R. Dewan & Co. CharteredAccountants to the effect that their appointment if made would be within the prescribedlimits under Section 141(3)(g) of the Act and that they are not disqualified for suchappointment within the meaning of Section 141 of the Act. The observations and commentsgiven by Auditors in their report read together with notes to Accounts are selfexplanatory and hence do not call for any further comments under Section 134 of the Act.
Explanation to Auditor's Remarks
1. The Company has granted loan to M/s. Yadu Sugar Ltd. of Rs. 45383952.in thecurrent year which was fully repaid during the year. However no interest has been chargedon this loan.
2. The Company has granted loan of Rs.110585000 to M/s. Cosmos Sugar Private Ltd. inthe financial year 2016-17 which was partly repaid during the year. An amount of Rs.44640000 is still outstanding as on 31.03.2017. But no interest has been charged onthis loan.
3. The Company has granted advance of Rs. 30000000 to M/s. Cosmos Industries Limitedin the financial year 2016-17 which was fully repaid during the year. However no interesthas been charged on this amount.
4. The Company has provided guarantee in respect of KCC loan secured to the farmers(suppliers) from Banks. As per Tripartite agreement between the Indian Sucrose Ltd.farmers and banks the banks have sanctioned KCC limit to the farmers and credited thesame in the Indian Sucrose Ltd.
5. The company had issued 700000 cumulative 6% preference cumulative shares of Rs.100each in Jan 2011 which were convertible into equity shares at a premium of Rs.4 eachwithin 60 months from the date of issue. These shares have not been converted into equityshares which were due for conversion after the month of Dec 2015.
6. The Company is holding more than 20% of the paid up share capital of RangarBreweries Limited therefore Rangar Breweries Limited is an associate company of theCompany.
Accordingly the Company is required to prepare consolidated financial statements as perthe provisions of clause 3 of section 129 of Companies Act 2013.
During the financial year under review the Company has appointed M/s. Ajay Kumar Singh& Associates Cost Accountants Delhi as the Cost Auditors and the Cost Audit Reportis required to be filed with the Central Government within 180 days from the end offinancial year.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Lalan Kumar Singh (FCS.:7837)(CP.:8544) from M/s L K Singh & Associatesa firm of Company Secretaries in Practice to undertake the Secretarial Audit of theCompany. The Report of the Secretarial Audit in Form MR-3 for the Financial Year endedMarch 31 2017 is annexed as Annexure 2 to the Report. There arereservations or adverse remarks made by Secretarial Auditor in this report. Theclarifications on the qualifications in the Secretarial Auditors' Report are selfexplanatory and no further explanation is considered necessary:-
(a) Company has granted Loan/advance to company in which director are interested therequirement of Section 185 of Companies Act 2013 has not been complied.
(b) The company had issued 700000 cumulative 6% preference cumulative shares ofRs.100 each in Jan 2011 which were convertible into equity shares at a premium of Rs.4each within 60 months from the date of issue. These shares have not been converted intoequity shares which were due for conversion after the month of Dec 2015. Further thecompany has neither paid nor credited any dividend since the date of issue of 6%preference cumulative shares.
(c) Rangar Beriweries Limited is associate Company of Indian Sucrose Limited so IndianSucrose Limited is require to prepare Consolidated Financial statements as per the section129 of Companies Act 2013. But Indian Sucrose Limited has not prepared the ConsolidatedFinancial Statements.
M/s Bhola Vijesh & Associates Chartered Accountants performs the duties ofinternal auditors of the company and their report is reviewed by the audit committee fromtime to time.
28. Corporate governance
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A separate section on corporate governance under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 along with thecertificate from the Practicing Company Secretary confirming the compliance is annexedand forms part of this Annual Report.
29. Conservation of Energy Technology Absorption And Foreign Exchange Earnings AndOutgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided asfollows:
CONSERVATION OF ENERGY
(a) The Steps taken or Impact on Conservation of Energy:
Efforts for Energy Conservation are a continuing process. These efforts continuedduring the financial year 2016-17 also.
(b) Steps taken by the Company for utilizing alternate sources of energy:
The Company has installed most modern equipments in the plant and is able to save andminimize energy consumption.
(c) The capital Investment on energy conservation equipments:
Total energy consumption and energy consumption per unit of production:
| ||Current year ||Previous year |
|Particular ||01.04.16 to 31.03.17 ||01.10.15 to 31.03.16 |
|1. ELECTRICITY || || |
|a). Purchased || || |
|Units ||974628 kvah ||771654 kvah |
|Amount (in lacs) ||- ||- |
|Rate/Unit (in Rs.) ||- ||- |
|b). Own generation || || |
|i) Through Diesel Generator || || |
|Units ||1910 kwh ||6187 kwh |
|Units per ltr of diesel oil ||3.78 kwh/L ||3.75 kwh/L |
|Rate/unit (in Rs.) ||- ||- |
|ii) Through Stream Turbine || || |
|Generation || || |
|Units ||52758038 ||39908622 |
|Units per ton of fuel ||- ||- |
|Rate/unit (being generated out of stream required for process) ||- ||- |
TECHNOLOGY ABSORPTION (R & D)
(i.) The efforts made towards technology absorption i) The Company has adoptedlatest technology in the plant to maximize production better quality and to minimizeconsumption of energy.
ii) The Company has implemented its own Effluent Treatment Plant of latest technology.
(ii.) The benefits derived like product improvement cost reduction productdevelopment or import substitution.
(iii.) Technology imported during the year Nil
FOREIGN EXCHANGE EARNING & OUTGO
(a) Total Foreign Exchange earned Rs. nil (previous year Rs. Nil)
(b) Total Foreign Currency used-Nil
30. Extract of Annual Return
The extract of the Annual Return of your Company as on March 31 2017 as provided undersub-section (3) of Section 92 in the Form MGT 9 is enclosed with this report as Annexure3.
The shares of your company are currently listed with Bombay and Calcutta StockExchange. Application for delisting with Calcutta Stock Exchanges is still pending andexpected to be approved very soon.
Your Company has not accepted any fixed deposits and as such no amount of principalor interest was outstanding as on the Balance Sheet date.
33. Particulars of Employees
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided separately as Annexure 4 tothis Report.
Further the details of employee remuneration as required under provisions of Section197(12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are not applicable to the Company.
34. Management Discussion & Analysis
Management Discussion and Analysis is annexed as Annexure 5.
35. Disclosure Under The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company's premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
The Policy on Prevention of Sexual Harassment at Workplace has been formulated by theCompany. The policy aims to develop a harmonious and productive working environment freefrom sexual harassment. The Company also ensures all allegations of sexual harassment areinvestigated and dealt with effectively and appropriately and during the year underreview the Company received no complaints pertaining to sexual harassment.
36. Human Resources
Human resources are the most important resource and your directors believe in to givethem their due weight age for their crucial role-playing in the overall progress of theorganization. The relationship between the management and the staffs/workers has beencomfortable and cordial during the year.
Your Directors take this opportunity to express their deep and sincere gratitude to allofficers/ staffs/ workers as team members for their dedicated and sincere efforts andalso to Bankers creditors suppliers and all concerned for showing their continued faithand extending their full and wholehearted support to our organization.
Your Directors would also like to express their gratitude to members for their trustand support.
| ||By Order of the Board of Directors |
| ||For Indian Sucrose Limited |
| ||Sd/- |
| ||Kunal Yadav |
| ||(Managing Director) |
|Date: 25-08-2017 || |
|Place: Delhi || |