Your Directors have pleasure in presenting their 80th AnnualReport together with the Audited Financial Statements for the period ended 31s1March 2020.
All India Production of Sugar for the Season 2019-20 is expected toreach 282 Lakh tonnes as compared to the previous year's production of 330 Lakhtonnes. The Government of India in order to control the falling sugar prices hasre-introduced release mechanism for sell of Sugar and has also presently declared minimumselling price at Rs.31/- per kg which is likely to be increased to Rs. 32 to 33.
Our total crushing of sugar cane at Ugar and Jewargi during the season2019-20 was 16.41 Lakh MT bagging 17.48 Lakh Qtls Sugars.
The brief financial results of the Company are as shown below:
|Particulars ||31.03.2020 Rs. in Lakh ||31.03.2019 Rs. in Lakh |
|Total Revenue ||101382.38 ||91216.69 |
|Total Expenditure (excluding Depreciation & Amortisation) ||98617.29 ||89123.92 |
|Profit before Depreciation & Amortisation ||2765.91 ||2092.77 |
|Depreciation & Amortisation ||1374.55 ||1545.39 |
|Profit Before Tax / (Loss) & Exceptional items ||1390.54 ||547.38 |
|Provision for Tax (including deferred tax adjustment short provision for tax) / MAT Credit entitlement ||14.00 ||112.84 |
|Profit after Tax / Net Profit / (Loss) ||1376.54 ||434.54 |
|Other Comprehensive Income ||(126.86) ||145.34 |
|Total Comprehensive Income for the period (Comprising Profit (Loss) and other Comprehensive Income for the period) ||1249.69 ||579.88 |
|Earnings Per Share (EPS) ||1.22 ||0.39 |
During this year Company has achieved recovery of 10.76% at Ugar and9.80% at Jewargi. With better price realization and increase in minimum selling price fromRs.29 to Rs.31 during the year the Company has shown a net profit of Rs. 1376.54 Lakhs.Central Government is taking various measures to stabilize the sugar price]
Transfer to Reserve: - No amount has been transferred to Reserve forthe financial year 2019-20
DIVIDEND: Your Directors are pleased to recommend a dividend @ 10% (i.e10 Paise Per Share) for the Current Financial Year 2019-20
OPERATIONS: SUGAR AT UGAR:
|Particulars ||Sugar Season 2019-20 ||Sugar Season 2018-19 |
|Date of beginning of crushing season ||14-11-2019 ||23-11-2018 |
|Date of ending of crushing season ||08-03-2020 ||09-03-2019 |
|Number of Working Days ||115 ||107 |
|Sugar Cane Crushed (Lakh MT) ||14.02 ||15.98 |
|Recovery ||10.76% ||12% |
|Sugar Produced (Lakh Qtls.) ||15.21 ||19.25 |
SUGAR AT JEWARGI :
|Particulars ||Sugar Season 2019-20 ||Sugar Season 2018-19 |
|Date of beginning of crushing season ||17-11-2019 ||14-11-2018 |
|Date of ending of crushing season ||08-03-2020 ||27-02-2019 |
|Number of Working Days ||112 ||105 |
|Sugar Cane Crushed (Lakh MT) ||2.38 ||3.32 |
|Recovery ||9.80% ||10.45% |
|Sugar Produced (Lakh Qtls.) ||2.33 ||3.51 |
DISTILLERY IML PRODUCTION & ELECTRICITY GENERATION :
|Particulars ||Unit ||Financial Year 2019-20 ||Financial Year 2018-19 |
|Rectified Spirit Produced (Lakh BL) ||Ugar ||130.05 ||153.04 |
|Denatured Spirit Produced (Lakh BL) ||Ugar ||61.19 ||74.07 |
|Potable Alcohol Produced (Lakh BL) ||Ugar ||57.81 ||61.99 |
|Electricity Generated (Lakh KW) ||Ugar ||1042.95 ||1149.15 |
|Electricity Exported (Lakh KW) ||Ugar ||552.27 ||610.30 |
|Electricity Generated (Lakh KW) ||Jewargi ||230.42 ||279.90 |
|Electricity Exported (Lakh KW) ||Jewargi ||139.79 ||168.58 |
Your Directors expect to procure about 19 to 21 Lakh MT sugarcane atUgar and Jewargi Units during 2020-21 crushing season.
Our Company continues to pursue its environmental friendly approachtowards Industrial growth. Constant improvements are being made in the process andequipments to minimize the discharge of effluents and emissions.
The Company has not accepted fresh deposits from public pursuant toSection 73 or 76 of the Companies Act 2013 read with The Companies (Acceptance ofDeposits) Rules 2014. However 1 (one) Depositors who have not claimed his deposit aftermaturity as on 31st March 2020 and the amount outstanding as on that date wasRs.2.55 Lakh. These amounts are lying with the Company as there is litigation in SangliCivil Court amongst the heirs about the true ownership of the deposit. As and when courtorder is received amount will be paid.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Company has not advanced any loans pursuant to Section 186 of theCompanies Act 2013. The Guarantees given to the financial institutions amounting toRs.71.25 Cr. to Canara Bank and Rs.25 Cr. to Union Bank of India. The investments coveredunder the provisions of Section 186 of the Companies Act 2013 are given in the notes tothe Financial Statements at Note No.C.
DIRECTORS RETIRE BY ROTATION:
Shri. Prafulla V. Shirgaokar age 81 years is liable to retireby rotation at this AGM & being eligible offers himself for reappointment. Being a fitand proper person Board intends to reappoint him as a Director.
Mrs. Shilpa Kumar aged 53 years is liable to retire by rotationat this AGM & being eligible offers herself for reappointment. Being a fit and properperson Board intends to reappoint her as a Director.
All Independent Directors have given declarations that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and Regulation 46 of SEBI (Listing Obligations and Disclosures Requirements) Regulation2015. The details of appointment of independent Directors are disclosed on Company'swebsite with following linkwww.ugarsugar.com
Board Evaluation :
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosures Requirements) Regulation 2015 the independent directors haveevaluated the performance of working Directors. The Board has carried out an annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its Audit Committees and Nomination & RemunerationCommittees.
Nomination & Remuneration Policy:
The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration and includes other matters as prescribed under theprovisions of Section 178 of Companies Act and Regulation 19 of SEBI (LODR) 2015. TheNomination & Remuneration Policy is available on the website of the Company on thefollowing link
During the year Four Board Meetings and Four Audit Committee Meetingswere convened and held the details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(5) of the Companies Act2013 we confirm that-
i] That in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
ii] The directors had selected such accounting policies and appliedthem consistently and made judgment and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
iii] The directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv] The directors had prepared the annual accounts on a going concernbasis;
v] The directors in case of listed company had laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and were operating effectively and;
vi] The directors had devised proper system to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively;
Our Company has been following good Corporate Governance since itsinception. The shares of our Company are listed on Bombay Stock Exchange Ltd. andNational Stock Exchange of India Ltd. We are regularly and timely complying with therequirements as per the Listing Agreement. Company has paid the Annual Listed Fees for theFinancial Year 2019-20. As required by SEBI Guidelines a Corporate Governance Report isannexed.
CO-GENERATION AT UGAR & JEWARGI:
During this year electricity generated was 1429.05 Lakh KW of which wehave exported 692.06 Lakh KW through HESCOM BESCOM CESCOM MESCOM and GESCOM byconsuming 3.10 Lakh MT of Bagasse.
The production of Rectified Spirit was 130.05 Lakh BL as compared to153 Lakh BL during the previous year. During the year under review we have supplied 61.18Lakh BL ethanol to the Oil Companies. The production at distillery was affected as thedistillery was closed due to draught conditions in May and June and flood in July andAugust.
INDIAN MADE LIQUOR (IML) AT UGAR:
The Company has manufactured 6.69 Lakh cases at Ugar during this yearas against 7.16 Lakh cases during the previous year. Company has continued bottling of itsproducts at M/s. K. S. Distilleries and M/s. SDF Industries.
DEMATERIALIZATION OF SHARES:
Our Company has provided connectivity with NSDL & CDSL fordematerialization of its shares for trading in electronic form under ISIN-No:INE071E01023. So far 9 41 38978. Equity shares have been dematerialized by theshareholders i.e.83.70% of total shareholding as on 31st March 2020. Theannual fees of depositories for the FY 2019-20 have been paid by the Company.
CONSERVATION OF ENERGYAND PARTICULARS OF EMPLOYEES:
Particulars pertaining to conservation of energy technology absorptionand foreign exchange earnings and outgo have been given under Annexure I. The disclosuresas required under Section 134(3) (m) of the Companies Act 2013 read with Rule 8 of TheCompanies (Accounts) Rules 2014 have been given under Annexure II. Both the annexure formpart of this report.
Non material Subsidiary Company UGAR THEATRE PVT. LTD.
Ugar Theatre Pvt Ltd was incorporated on 29-11-1977 with an intentionto exhibit films for the Ugar people. With increased media facilities the film exhibitionhas become un-remunerative hence the activity of film exhibition was stopped w.e.f. 30thJanuary 2004 and the machinery was sold. The Company is presently engaged in providingwarehousing facility to others. It has become subsidiary of our company during the year.It is a non remunerative subsidy. The accounts have been consolidated with our company.AOC -1 form is annexed.
QUALIFYING REMARKS IN AUDITORS' REPORT:
There are no qualifying remarks in the Statutory Auditors Report.
There are no qualification remarks in the Secretarial Auditor Report;
He has made following observation in his report.
i) Company has conducted Postal Ballot vide Notice Dt 22-05-2019 forpassing of the Special Resolutions Pursuant to Regulation 17(1 A) of SEBI (LODR) 2015regulations for continuation of appointment of non-executive Directors of the Companyabove the age of 75 years w.e.f. 01-04-2019 till the date of their appointment. Results ofPostal Ballot for passing of special resolutions were declared on 11th July2019.
We have to clarify that the approval has been given by general bodyretrospectively from 01/04/2019.
The Company's Auditors M/s. Kirtane & Pandit LLP CharteredAccountants having FRN-105215W were appointed in 77th Annual General Meetingfor a term of five years no ratification is required every year. They have confirmed theireligibility under Section 141 of the Companies Act 2013 for financial year 2020-21. Theauditors have also confirmed that they hold a valid certificate issued by the Peer ReviewBoard of the Institute of Chartered Accountants of India.
Pursuant to Section 148 of the Companies Act 2013 read with TheCompanies (Cost Records and Audit) Amendment Rules 2014 the cost audit records aremaintained by the Company in respect of its Cost Audit of Sugar Industrial Alcohol andElectrical Energy. Your Directors have appointed Mr. V. V. Deodhar Cost AccountantMumbai (Membership No. 3813) on the recommendation of the Audit Committee to audit thecost accounts of the Company for the financial year 2020-21 on a remuneration ofRs.230000/- subject to the ratification by General Body.
Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed CS Abhay Gulavani Company
Secretaries in Practice Miraj (Membership No A28983) to undertake theSecretarial Audit of the Company who has consented to the same. The Report of theSecretarial Audit Report is annexed herewith as "Annexure IN".
CORPORATE SOCIAL RESPONSIBILITY
In view of the loss incurred during the year 2017-18 there was noeligible amount for CSR activities. The Report of the CSR is annexed herewith as"Annexure IV".
INTERNAL FINANCIAL CONTROL:
The Company has Internal Financial Controls with proper checks andbalances to ensure that transactions are properly authorized recorded and reported apartfrom safeguarding its assets. These systems are reviewed and improved on a regular basis.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness. The transactions entered into by the Company during the year were within thelimits of the Powers of the Board as prescribed in Section 188 read with Companies(Meetings of Board & its Powers) Rules 2014. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel other designated persons or other related parties which may have a potentialconflict with the interest of the Company at large.
The Company has taken Omnibus approval of Audit Committee for theRelated Party Transaction. All Related Party Transactions were placed before the AuditCommittee and the Board for their approval.
The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website.
Details relating to Related Party Transactions are shown in Form No.AOC-2: (Pursuant to clause (h) of subsection (3) of section 134 of the Act and Rule 8(2)of the Companies (Accounts) Rules 2014) is attached as Annexure V.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRUBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATION IN FUTURE:
There are no significant and material orders passed by any regulatoryauthority court or tribunal which shall impact the going concern status andcompany's operations in future.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT-9 is annexed herewith as "Annexure VI". DETAILS OF REMUNERATION AS REQUIREDUNDER SECTION 178 & 197 (12):
Details of Remuneration as required under Section 178 and 197 (12) ofthe Companies Act 2013 Read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are given as "Annexure VII."
WHISTLE BLOWER POLICY/ VIGIL MECHANISM:
Pursuant to the provisions of Section 177 of the Companies Act 2013read with Rule 7 of Companies (Meetings of Board and its Powers) Rules 2014 and Clause 22of the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 theCompany has adopted a Whistle Blower Policy / Vigil Mechanism that encourages and supportsits Directors & employees to report instances of unethical behavior actual orsuspected frauds or
violation of Company's Code of Conduct. It also provides adequatesafeguards against victimisation of persons who use this mechanism and direct access tothe Chairman of Audit Committee in exceptional cases. The Whistle
Blower Policy / Vigil Mechanism policy has been posted on web site ofcompany on the linkhttp://web.ugarsugar.com/lnvestor_Relations/Corporate_Announcements.asp?child=3&parent=7
PREVENTION PROHIBITION & REDRESSAL OF SEXUAL HARASSMENT OF WOMENAT WORK PLACE:
The Company has in place a policy on prevention prohibition &redressal of sexual harassment of women at work place and an Internal Complaints Committeehas been constituted. No complaints are received during the year.
RISK MANAGEMENT POLICY
Details of Risk Management Policy as required under the provisions ofCompanies Act 2013 are placed on the Company's website www.ugarsugar.com.
CHANGE IN NATURE OF BUSINESS IF ANY
There is no change in nature of Business of the company during theyear.
BUSINESS RESPONSIBILITY REPORT
As per SEBI LODR Fifth Amendment regulation Business ResponsibilityRegulation 2019 provides that the Business Responsibility report is mandatory for top 1000listed Companies. Our rating based on market capitalization as on 31/03/2020 on BSE is1041 and on NSE is 1041. In view of this the Business Responsibility report is notmandatory for us and as such same has not been given by us..
Your Directors wish to place on record their sincere appreciation forthe continued support received from Managements of Central Bank of India Bank of BarodaUnion Bank of India and Bank of India Dombivali Nagari Sahakari Bank and Sangli UrbanCo-operative Bank Ltd for providing working capital finance and Central Bank of IndiaBank of Baroda Sugar Development Fund for providing long term finance for CapitalInvestments Tata Power Trading Co. Ltd. and Electricity Supply Company (ESCOMS) fortransmission of energy.
Your Directors thank the Government of India Government of KarnatakaGovernment of Maharashtra Government Authorities Shareholders Cane suppliers Workersand Staff for their co-operation and contribution to the overall progress of the Company.
| ||By order of the Board of Directors |
| ||For The Ugar Sugar Works Limited |
| ||P. V. Shirgaonkar |
|Date : 26-06-2020 ||Chairman |
|Regd. Office: Mahaveer Nagar || |
|Sangli-416416. || |