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Mawana Sugars Ltd.

BSE: 523371 Sector: Agri and agri inputs
NSE: MAWANASUG ISIN Code: INE636A01039
BSE 00:00 | 21 Jan 83.85 -2.95
(-3.40%)
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89.90

HIGH

89.90

LOW

83.30

NSE 00:00 | 21 Jan 84.10 -2.80
(-3.22%)
OPEN

87.00

HIGH

89.00

LOW

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OPEN 89.90
PREVIOUS CLOSE 86.80
VOLUME 24588
52-Week high 124.05
52-Week low 29.40
P/E 28.33
Mkt Cap.(Rs cr) 328
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 89.90
CLOSE 86.80
VOLUME 24588
52-Week high 124.05
52-Week low 29.40
P/E 28.33
Mkt Cap.(Rs cr) 328
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mawana Sugars Ltd. (MAWANASUG) - Director Report

Company director report

Your Directors hereby present the 57th Annual Report along with Audited Accounts of theCompany for the financial year ended March 312021.

Demise of Late Shri Siddharth Shriram Special Advisor/ promoter and Prof. DineshMohan Director of the Company

Your Directors are deeply saddened to report the sad and sudden demise of Late ShriSiddharth Shriram Special Advisor/promoter of the Company on 17.5.2021 and Prof. DineshMohan Director of the Company on 21.05.2021.

Your Directors place on record their profound respect and great appreciation for theservices rendered by both these gentlemen in development and growth of the Company overthe long years of their association with the Company.

FINANCIAL RESULTS

(Rs. Million)

Sl. Particulars Amount
No. 31.3.2021 31.3.2020
1 Profit before interest depreciation exceptional items and tax 1013.22 627.02
2. Interest 351.61 266.51
3. Depreciation 475.72 555.50
4. Exceptional Items - Income* 1070.27 -
5. Profit before tax (1-2-3+4) 1256.16 (194.98)
6. Tax expenses 322.25 695.64
7. Profit after tax from continuing operations (5-6) 933.71 (890.62)
8. Profit/(Loss) before tax from discontinued operations (233.43) 125.34
9. Tax credit/(expense) of discontinued operations 43.55 (31.54)
10. Profit/(Loss) from discontinued operations (8+9) (189.88) 93.80
11. Profit/(Loss) for the year (7+10) 743.83 (796.82)
12. Other Comprehensive Income 1.33 (18.06)
13. Total Comprehensive Income (11+12) 745.16 (814.88)

*Exceptional items include:

a) Gain on transfer of Company's Undertaking of Chemical Business on slump sale basisas a ‘going concern' to Bodal Chemicals Limited for a lumpsum consideration ofRs.1484.44 million including net current assets of Rs 114.44 million which has resulted ingain of Rs. 1118.65 million (Net of expenses related to sale of Undertaking).

b) Provision for impairment in value of its investment in associate Company namely"Mawana Foods Private

Limited" impairment to the extent of excess of carrying value over its value inuse by Rs 52.66 million.

c) Gain of Rs. 4.28 million on sale of entire shareholding held in Siel FinancialServices Limited a subsidiary of the Company after adjusting provision for diminution invalue of Company's investment.

TRANSFER TO RESERVES

No amount is proposed to be transferred to the General Reserve.

DIVIDEND

The Company had not been able to declare any dividend for its shareholders for lastmany years due to absence of any distributable profits. Your Directors however consider itappropriate to pay some token dividend and recommend a dividend @ 30% i.e. Rs.3/- perEquity Share of face value of Rs.10/- each for the Financial Year ended 31.03.2021.

COVID-19

The black swan event ‘COVID-19' declared a ‘Global Pandemic' by the WorldHealth Organisation (WHO) caused massive global disruption in all forms of economicactivity in the world including in India. The nationwide lockdown caused complete shutdownof Company's Chemical Business but Sugar manufacturing operations continued without anysignificant disruption. However Sugar sale was adversely affected due to lack of demand.Ethanol supply was limited in view of low requirement of petroleum products during thisperiod.

The situation is fast returning to normal during the current period.

OPERATIONS

1. SUGAR DIVISION (2020-21)

The Sugarcane crush during season 2020-21 was 30.69 Lac Ton as compared to 31 Lac Tonin the last season. Recovery was lower than the previous year due to operating both theplants on ‘B' heavy molasses which resulted into lower sugar production. Governmentof India had announced Minimum Support Price (MSP) for sugar which together with sugarsales quota mechanism brought stability to sugar sale price in the market. The prospect ofexcessive national level stocks will continue for a foreseeable future and export willonly be possible with Government support.

There has been pressure on cane dues payment even though sufficient sugar stocks areavailable in the Company to pay the sugarcane dues. All efforts including sale of assetsare being made to fasten the cane payments and it is felt that relaxation in restrictionto sell limited quantity of sugar could further facilitate faster cane payment to thefarmers.

The Company has still not received its legitimate dues from U.P. Government under theSugar Industry Promotion Policy of 2004 despite there being a comprehensive judgment bythe Allahabad High Court in favour of the Company.

2. DISTILLERY DIVISION

Distillery has recorded the highest ever ethanol production in the financial year2020-21 since its inception. During the year the distillery was allocated 38271 KLethanol for supply to various Oil Marketing Companies and dispatches against the same havebeen started.

Company has received the Environmental Clearance from MOEF & Climate Change to setup a new 120 KLPD Distillery at Mawana Sugar Works and has also received Environmentalclearance for enhancement of NSC distillery capacity from 120 KLPD to 150 KLPD.

3. CHLOR ALKALI DIVISION:

The operations at the Chlor-alkali Division were not satisfactory. The Undertaking ofChemical Business of the Company operating as Siel Chemical Complex was transferred toBodal Chemical Limited for a valuable consideration and the Company is now out of ChemicalBusiness.

MATERIAL CHANGES AND COMMITMENTS

TRANSFER AND EXIT FROM CHEMICAL BUSINESS

During the year Company has exited from the Chemical Business and has transferred itschemical manufacturing undertaking operating under the name and style of ‘SielChemical Complex'(SCC) located at Rajpura Punjab for a valuable consideration to BodalChemicals Limited.

SUBSIDIARY/ASSOCIATE COMPANIES

a) SUBSIDIARY COMPANIES

The Company has following subsidiary companies:

i) Siel Financial Services Limited (SFSL)

SFSL is a listed Company but has not been doing any business for last about 18 years.The Company has exited out of SFSL by selling its entire shareholding held in SFSL for anegotiated consideration by duly following the procedure prescribed by sEbI. As on thedate of this report SFSL ceases to be subsidiary of the Company.

ii) Siel Industrial Estate Limited (Siel IE)

Siel IE was established to develop an Industrial Estate in Punjab and holds a largechunk of industrial land at Rajpura Punjab for development of an Industrial Estate. SielIE shall initiate steps for development after receiving clearance under various statutoryrequirements.

iii) Siel Infrastructure & Estate Developers Pvt. Ltd (Siel IED)

Siel IED had been created for assisting in the development of Siel IE and will getactivated after Siel IE commences action.

b) ASSOCIATE COMPANY

Mawana Foods Private Limited (MFPL) is an associate of the Company which is engaged inretail business of sugar edible oils and soap.

Pursuant to provisions of Section 129 and other applicable provisions of the CompaniesAct 2013 (the Act) Act read with Rules made there under the performance and financialposition of the subsidiaries/ associate company are annexed in Form AOC-I to the AnnualFinancial Statements.

There has been no change in the relationship of subsidiaries/associate Company duringthe current financial year.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for the financial year 2020-2021are prepared in compliance with applicable provisions of the Act Accounting Standards andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

(a) APPOINTMENTS / RE-APPOINTMENTS/ CONTINUATION

Mr. Dharam Pal Sharma (DIN:07259344) Whole Time Director of the Company will retire byrotation at the forthcoming Annual General Meeting (‘AGM') and being eligible offershimself for re-appointment.

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC) theBoard appointed Mr. Satish Agrawal (DIN:00167589) as an Additional Director of the Companywith effect from 9th December 2020 and Mr. Krishna Shriram (DIN: 00031783) as anAdditional Director of the Company with effect from 31st May 2021 to hold office up tothe date of the AGM. Mr. Satish Agarwal and Mr. Krishna Shriram are eligible to beappointed as a Non-Executive- NonIndependent Directors liable to retire by rotation atthe AGM. Company has received the requisite Notices from Member in writing proposing theirname for appointment as a Director of the Company.

Particulars of the Directors seeking appointment/ re- appointment have been given inthe explanatory statement annexed to the notice for the Annual General Meeting.

All the Directors have made necessary disclosures as required under various provisionsof the Act and SEBI (LODR) Regulations 2015.

(b) KEY MANAGERIAL PERSONNEL

During the financial year ended March 31 2021 the following persons were the WholeTime Key Managerial Personnel (KMP) of the Company in terms of Section 203 of the Act:

Sl. No. Name Designation
1. Mr. Dharam Pal Sharma Whole Time Director
2. Mr. B.B. Mehta Chief Financial Officer
3. Mr. Ashok Kumar Shukla Company Secretary

(c) DECLARATION U/S 149 (6) OF THE ACT

The Independent Directors (IDs) have given declarations u/s 149(6) of the Act andRegulation 16(1)

(b) of the SEBI (LoDr) Regulations 2015 confirming that they meet the criteriaof independence as laid down under the said Section/ Regulation.

The Directors of the Company have also confirmed that they were not disqualified to beappointed as Directors as per Section 164(2) of the Act and they have not been debarred bySEBI to hold an office of Director.

(d) BOARD/DIRECTORS' EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by SEBI (LODR) Regulations 2015.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act

2013 your Directors state that:

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

b) the Directors had 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 at the end of the financial year and ofthe profit of the Company for that year;

c) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the Annual Accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

MEETINGS OF THE BOARD

During the financial year ended March 312021 nine Board meetings were held. In caseof urgent business 4 resolutions were passed by circulation by the Board with requisitemajority. Compliance reports of various laws applicable to the Company were reviewed bythe Audit Committee and the Board of Directors. The intervening gap between the Meetingswas within the period prescribed under the Act and the SEBI (LODR) Regulations 2015. Thedetails of meetings held and attended by the Directors during the year are provided in theCorporate Governance Report.

All statutory and other important items/ information were placed before the Board forapproval/review.

INTERNAL FINANCIAL CONTROLS

The Company has over the years evolved effective systems and procedures to ensureinternal financial controls in all its establishments and such policies and proceduresadopted by the Company for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information.

The Audit Committee evaluates the internal financial control system periodically.

An effective communication/ reporting system operates between the Units and CorporateOffice to keep various establishments abreast of regulatory changes and ensurecompliances.

AUDITORS AND THEIR REPORT

a) STATUTORY AUDITORS

Pursuant to the Section 139 of the Act appointment of the Statutory Auditors M/s. S.R.Batliboi & Co. LLP Chartered Accountants (ICAI Firm Registration No:301003E/ E300005)was made by the members of the Company in its 53rd Annual General Meeting held on July 272017 for a period of 5 years till the conclusion of 58th Annual General Meeting of theCompany on the recommendation of the Audit Committee and the Board of Directors.

The Report given by the Auditors on the financial statements of the Company is part ofthe Annual

Report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.

b) COST AUDITORS

The Board on the recommendation of the Audit Committee has approved the appointmentof M/s. Bahadur Murao Co. Cost Accountants New Delhi (Firm Registration No. 4941) asCost Auditors for conducting the audit of the cost records maintained by the Company forthe products (Sugar Industrial Alcohol Power) for the financial year 2021-22 at a totalremuneration of Rs.175000/- plus GST & out-ofpocket expenses if any.

In accordance with the provisions of Section 148 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 the remuneration payable to the CostAuditors is required to be ratified by the Members of the Company.

Accordingly confirmation of the Members is being sought by passing an OrdinaryResolution as set out in the Notice for ratification of the remuneration payable to theCost Auditors for the financial year ended March 312022.

The Cost Audit Report for the financial year ended March 312020 was filed within thetime limit prescribed under the Companies (Cost Audit Report) Rules 2011.

c) SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act the Company has appointed Mr.Nirbhay Kumar (CP No.7887) of M/s Nirbhay Kumar Associates Practicing Company Secretariesto undertake the Secretarial Audit of the Company for the financial year 2020-21.

The Secretarial Audit Report for the financial year ended 31st March 2021 is attachedas Annexure I of this Board's Report.

PUBLIC DEPOSITS

The Company has not accepted any public deposits under Chapter V of the Act during thefinancial year ended March 312021.

RISK MANAGEMENT

The Company has a Risk Management Committee to identify assess monitor and mitigatevarious risks to key business objectives. Major risks identified are systematicallyaddressed through mitigating actions on a continuing basis. These are discussed at themeetings of the Audit Committee and the Board of Directors of the Company.

AUDIT COMMITTEE

As on date of this report the Audit Committee comprises of four Directors two of whomare non-executive independent directors and two are non-executive Non-independentdirectors viz. Mr. Ravinder Singh Bedi as Chairman and Mrs. Manju Vira Gupta Mr. PiarChand Jaswal and Mr. Satish Agrawal as Members.

The details of terms of reference of the Audit Committee number and dates of meetingheld attendance among others are given separately in the attached Corporate GovernanceReport.

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to the provisions of Section 178 of the Act read with Rules made there underthe Board has constituted a Nomination & Remuneration Committee and the details ofterms of reference number & dates of meeting held attendance and other details aregiven separately in the attached Corporate Governance Report. The Board on therecommendation of Nomination & Remuneration Committee framed a policy i.e. Nominationand Remuneration Policy for selection and appointment of Directors senior managerialpersonnel and their remuneration. The aforesaid policy can be accessed on the Company'swebsite: www. mawanasugars.com.

REMUNERATION POLICY

The Company has adopted a Remuneration Policy for executive and non-executive directorsand persons who may be appointed in Senior Management and Key Managerial positions and todetermine their remuneration as approved by the Board of Directors on the recommendationof Nomination and Remuneration Committee. The remuneration so approved is subject to theapproval by the shareholders and such other authorities as the case may be. Theremuneration policy is also placed on the Company's website.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Act. The Company has adopted a CSR policy. TheCommittee is primarily responsible for formulating and recommending to the Board ofDirectors from time to time the CSR activities and the amount of expenditure to beincurred on the activities pertaining to CSR and monitoring CSR Projects. The CSR Policyof the Company has been placed on the Company's website. During the year the Company hasnot contributed towards CSR in view of losses as computed in accordance with theprovisions of Section 198 of the Act.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS

The information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3) (m) of the Act read withRule 8(3) of the Companies (Accounts) Rules 2014 is enclosed as Annexure - II and formspart of this Report.

PARTICULARS OF EMPLOYEES

The information as required under the provision of Section 197(12) of the Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company are given in Annexure - III of this Board's Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act are given in the notes to Financial Statements.

RELATED PARTY TRANSACTIONS

The Board has framed a Policy on related party transactions and placed the same on theCompany's website.

The related party transactions between the Company and the Directors Key ManagementPersonnel the subsidiaries or the relatives have been disclosed in the financialstatements in Notes to Financial Statements and compliance of Section 188(1) of the Acthave been duly made wherever applicable.

VIGIL MECHANISM

The Company has formulated and implemented the Whistle Blower Policy/Vigil Mechanism.This has provided a mechanism for directors and employees of the Company and other personsdealing with the Company to report to the Chairman of the Audit Committee; any instance ofunethical behavior actual or suspected fraud or violation of the Company's code ofconduct. The aforesaid policy has also been uploaded on the Company's website.

ANNUAL RETURN

A copy of Annual Return for the year 2019-20 is available on the Company's web linkwww.mawanasugars.com/ annual-reports . The Annual Return for the year 2020-21 will beuploaded after filing with the Registrar of Companies in due course

CORPORATE GOVERNANCE

In accordance with SEBI (LODR) Regulations 2015 Corporate Governance Report alongwith Auditors' certificate thereon and Management Discussion and Analysis Report form partof this report are annexed herewith and marked as Annexure IV.

SHARE CAPITAL

During the financial year ended 31.3.2021 the Company has not issued any share capitalwith different voting rights sweat equity or ESOP nor provided any money to the employeesor trusts for purchase of its own shares.

UNCLAIMED SHARES SUSPENSE ACCOUNT

The position regarding the unclaimed equity shares transferred to the Demat SuspenseAccount as required under SEBI (LODR) Regulations is as under:

Balance as on 1.4.2020

No. of Members who approached the Company for transfer of shares and shares transferred from Suspense Account during the year

Balance as on 31.3.2021

No. of holders No. of shares No. of holders No. of Shares No. of Holders No. of Shares
6666 150043 7 220 6659 149823

The voting rights on the shares in the suspense account as on 31st March 2021 willremain frozen unless the rightful owners of such shares claim the shares.

ANTI-SEXUAL HARASSMENT POLICY

Pursuant to the "Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013" the Company has constituted Internal Complaints Committeesat all its workplaces. There has been no complaint reported in this regard to any of theCommittees.

ACKNOWLEDGEMENTS

The Directors wish to thank and deeply acknowledge the cooperation assistance andsupport extended by Central Government State Governments Banks Financial InstitutionsDealers Sugarcane farmers Society at large Vendors and valued shareholders of theCompany. The Directors also wish to place on record their appreciation for the all-roundco-operation and contribution made by the employees at all levels.

For & on behalf of the Board of Directors

(Ravinder Singh Bedi)
Chairman of the Board
DIN: 01408189
Place : New Delhi
Dated : 25.06.2021

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