Ugar Sugar Works Ltd.
|BSE: 530363||Sector: Agri and agri inputs|
|NSE: UGARSUGAR||ISIN Code: INE071E01023|
|BSE 00:00 | 17 Aug||56.55||
|NSE 00:00 | 17 Aug||56.50||
|Mkt Cap.(Rs cr)||636|
|Mkt Cap.(Rs cr)||636.19|
Ugar Sugar Works Ltd. (UGARSUGAR) - Director Report
Company director report
Your Directors have pleasure in presenting their 81 Annual Reporttogether with the Audited Financial Statements for the period ended 31 March 2021.
All India Production of Sugar for the Season 2020-21 is expected toreach 309 Lakh tones as compared to the previous year's production of 274 Lakhtones. The Government of India in order to control the falling sugar prices has continuedrelease mechanism for sell of Sugar and has also presently declared minimum selling priceat Rs.31/- per kg which is likely to be increased to Rs.33/-per kg .
Our total crushing of sugar cane for the company including both unitsfor the season 2020-21 was 22.87 Lakh MT and the total bagging was 26.40 Lakh quintals ofsugar.
The brief financial results of the Company are as shown below:
During this year Company has achieved recovery of 11.56% at Ugar and10.72% at Jewargi. With better price realization the Company has shown a net profit of Rs.1705.06 Lakhs. Central Government is taking various measures to stabilize the sugarprice.
Transfer to Reserve: - No amount has been transferred to Reserve forthe financial year 2020-21.
DIVIDEND: Your Directors are pleased to recommend a dividend @20%(Rs. 0.20 per share) for the Current Financial Year 2020-21.
SUGAR AT UGAR:
SUGAR AT JEWARGI :
DISTILLERY IML PRODUCTION & ELECTRICITY GENERATION
Your Directors expect to procure about 22 to 25 Lakh MT sugarcane atUgar and Jewargi Units during 2021-22 crushing season.
Our Company continues to pursue its environmental friendly approachtowards Industrial growth Constant improvements are being made in the process andequipment's 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. However1 (one) Depositor who has not claimed his deposit aftermaturity as on 31 March 2021 and the amount outstanding as on that date was Rs.2.55Lakh. These amounts are lying with the Company as there is litigation in Sangli CivilCourt amongst the heirs about the true ownership of the deposit. As and when court orderis received the 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 to Rs.79Cr. to Union Bank of India. The investments covered under the provisions of Section 186 ofthe Companies Act 2013 are given in the notes to the Financial Statements at Note No. C.
DIRECTORS RETIRE BY ROTATION:
Shri. Shishir. S. Shirgaokar age 76 years is liable to retire byrotation at this AGM & being eligible offers himself for reappointment. Being a fitand proper person Board intends to reappoint him as a Director.
Shri. Sachin Rajendra Shirgaokar age 55 years is liable to retire byrotation at this AGM & being eligible offers himself for reappointment. Being a fitand proper person Board intends to reappoint him as a Director.
Re-appointment of Independent Director for second term:
Shri. Hari Y. Athawale aged 82 will be re-appointed for 2 term for aperiod of 3 years.
All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 46 of SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015.The details of appointment of independent Directors are disclosed on Company's websitewith following link www.ugarsugar.comhttp://web.ugarsugar.com/Investor_Relations/Corporate_Announcements.asp?child=3&parent=7
Changes in Key Managerial Personal :
Shri. R. V. Desurkar (CFO) & Shri. B.G. Kulkarni (CS) asretired from the services w.e.f.18-01-2021 Shri. S.V. Bhat (CFO) & Shri. Tushar V.Deshapande (CS) have been appointed w.e.f. 10-02-2021.
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 Committee and Nomination & RemunerationCommittee.
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......http://web.ugarsugar.com/Investor_Relations/Corporate_Announcements.asp?child=3&parent=7
During the year Five 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 had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating 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 BSE Ltd. (formerly Bombay StockExchange Ltd.) and National Stock Exchange of India Ltd. We are regularly and timelycomplying with the requirements as per the Listing Agreement. Company has paid the AnnualListing Fees for the Financial Year 2021-22. As required by SEBI Guidelines a CorporateGovernance Report including the Auditor's Certificate on Corporate Governance isannexed.
CO-GENERATION AT UGAR & JEWARGI:
During this year electricity generated was 1704.22 Lakh KW of which wehave exported 928.24 Lakh KW through HESCOM BESCOM CESCOM MESCOM and GESCOM byconsuming 5.30 Lakh MT of Bagasse.
The production of Rectified Spirit was 142.00 Lakh BL as compared to130.05 Lakh BL during the previous year. During the year under review we have supplied33.01 Lakh BL ethanol to the Oil Companies.
INDIAN MADE LIQUOR (IML) AT UGAR:
The Company has manufactured 6.68 Lakh cases at Ugar during this yearas against 6.69 Lakh cases during the previous year. Company has continued bottling of itsproducts at M/s. Polson 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 94230866. Equity shares have been dematerialized by theshareholders i.e. 83.76% of total shareholding as on 31 March 2021. The annual fees ofdepositories for the FY 2021-22 have been paid by the Company.
CONSERVATION OF ENERGY
A detail of conservation of energy is annexed as "AnnexureI". And technology absorption foreign exchange earnings and outgo pursuant toSection134 (3)(m) of the Companies Act 2013 read with the Rule8(3) of the Companies(Accounts) Rules 2014 is annexed as "Annexure II". 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. 30January 2004 and the machinery was sold. The Company is presently engaged in providingwarehousing facility to others. It has become subsidiary of our company. The accounts havebeen consolidated with our company. Form AOC I is annexed.
USW SPIRITS PVT. LTD
USW Spirits Pvt. Ltd has been incorporated on 17 Feb 2021. The Companyholds 50% of Share capital in USW Spirits Pvt. Ltd. The USW Spirits Pvt. Ltd is yet tocommence its business. It is a non-material Subsidiary Company. The Allotment of shares ofthe company is not completed till 31 March 21.
QUALIFYING REMARKS IN AUDITORS' REPORT:
There are no qualifying remarks in the Statutory Auditors Report.
The Company's Auditors M/s. Kirtane & Pandit LLP CharteredAccountants having FRN-105215W/W100057 were appointed in 77 Annual General Meeting for aterm of five years no ratification is 27 required every year. They have confirmed theireligibility under Section 141 of the Companies Act 2013 for financial year 2021-22. 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 2021-22 on a remuneration of Rs.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 F10668) to undertake the Secretarial Audit of the Company who has consentedto the same. The Secretarial Audit Report is annexed herewith as "AnnexureIII". The observations made in the report and our reply to the observation isself explanatory. The observation & reply given by the company forms part of hisreport.
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 "AnnexureIV".
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 sub-section (3) of section 134 of the Act and Rule 8(2)of the Companies (Accounts) Rules 2014) is attached as "Annexure V".
Particulars required as per Section 134 of the Companies Act 2013
As per Section 134 of the Companies Act 2013 (the Act')your Company has provided the Consolidated financial statements as on March 31 2021. YourDirectors believe that the consolidated financial statements present a more comprehensivepicture as compared to standalone financial statements. These documents are available forinspection during the business hours at the Registered Office of your Company and therespective subsidiary companies. A statement showing financial highlights of thesubsidiary companies is enclosed to the consolidated financial statements. The AnnualReport of your Company does not contain full financial statements of the subsidiarycompanies however your Company will make available the audited annual accounts andrelated information of the subsidiary companies in soft copy in line with the Ministry ofCorporate Affair (MCA) Circular dated May 5 2020 and its extentions from time to timeupon request by any Member of your Company. Form AOC-1 is annexed to this report.
Consolidated financial statements
Consolidated financial statements of your Company and its subsidiariesas at March 31 2021 are prepared in accordance with the Indian Accounting Standard (IndAS) 110 on Consolidated Financial Statements' notified by the MCA and formspart of this Annual Report
The Ministry of Corporate Affairs notified the Secretarial Standard onMeetings of the Board of Directors (SS 1) Secretarial Standard on General Meetings (SS2) Secretarial Standard on Dividend (SS 3) and Secretarial Standard on Report of theBoard of Directors (SS-4). The Company complies with Secretarial Standards and guidelinesissued by the Institute of Company Secretaries of India (ICSI).
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 forms part of this report as "Annexure VI" is available on ourwebsite at www.ugarsugar.com
DETAILS OF REMUNERATION AS REQUIRED UNDER 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 behaviour actual orsuspected frauds or violation of Company's Code of Conduct. It also provides adequatesafeguards against victimization of persons who use this mechanism and direct access tothe Chairman of Audit Committee in exceptional cases. The Whistle Blower Policy/VigilMechanism policy has been posted on web site of company on the link-http://web.ugarsugar.com/Investor_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 is 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 31/03/2021 on BSE is1339 and on NSE is 1144. 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 Dombivali Nagari Sahakari Bank and Sangli Urban Co-operative BankLtd for providing working capital finance and Central Bank of India Bank of BarodaSugar Development Fund for providing long term finance for Capital Investments andElectricity Supply Companies (ESCOMS) for transmission 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.