Your Directors have pleasure in presenting their 79th Annual Report togetherwith the Audited Financial Statements for the period ended 31st March 2019.
All India Production of Sugar for the Season 2018-19 is expected to reach 330 Lakhtonnes as compared to the previous year's production of 315 Lakh tonnes. The Governmentof India in order to control the falling sugar prices has re-introduced release mechanismfor sell of Sugar and has also presentaly it is declared minimum selling price at Rs.31/-per kg.
Our total crushing of sugar cane at Ugar and Jewargi during the season 2018-19 was19.30 Lakh MT bagging 22.76 Lakh Qtls Sugars.
The brief financial results of the Company are as shown below:
|Particulars ||31.03.2019 || |
| ||Rs. in Lakh || |
Rs. in Lakh
|Total Revenue ||91216.69 || |
|Total Expenditure (excluding Depreciation & Amortisation) ||89123.92 || |
|Profit before Depreciation & Amortisation ||2092.77 || |
|Depreciation & Amortisation ||1545.39 || |
|Profit Before Tax / (Loss) & Exceptional items ||547.38 || |
|Provision for Tax (including deferred tax adjustment short provision for tax) / MAT Credit entitlement ||112.84 || |
|Profit after Tax / Net Profit / (Loss) ||434.54 || |
|Other Comprehensive Income ||145.34 || |
|Total Comprehensive Income for the period (Comprising Profit (Loss) and other Comprehensive Income for the period) ||579.88 || |
|Earnings Per Share (EPS) ||0.39 || |
During this year Company has achieved recovery of 12% at Ugar and 10.45% at Jewargi.The Company has also achieved highest distillery production of 153.04 Lakh liters. Withbetter price realization and increase in minimum selling price from Rs.29 to Rs.31 duringthe year the Company has shown a net profit of Rs. 434.54 Crore. [Central Government istaking various measures to stabilize the sugar price like Export of Sugar providing 20Lakh MT minimum indicative export quotas (MIEQ) Ethanol policy.]
Transfer to Reserve: - No amount has been transferred to Reserve for the financial year2018-19 DIVIDEND :
Although the company has made profit during the year however due to carry forwardlosses of last year the Board has not recommended any Dividend for the Financial Year2018-19. (No Dividend was declared for the previous year 2017-18).
OPERATIONS: SUGAR AT UGAR:
|Particulars ||Sugar Season 2018-19 || |
Sugar Season 2017-18
|Date of beginning of crushing season ||23-11-2018 || |
|Date of ending of crushing season ||09-03-2019 || |
|Number of Working Days ||107 || |
|Sugar Cane Crushed (Lakh MT) ||15.98 || |
|Recovery ||12% || |
|Sugar Produced (Lakh Qtls.) ||19.25 || |
SUGAR AT JEWARGI :
|Particulars ||Sugar Season 2018-19 || |
Sugar Season 2017-18
|Date of beginning of crushing season ||14-11-2018 || |
|Date of ending of crushing season ||27-02-2019 || |
|Number of Working Days ||105 || |
|Sugar Cane Crushed (Lakh MT) ||3.32 || |
|Recovery ||10.45% || |
|Sugar Produced (Lakh Qtls.) ||3.51 || |
DISTILLERY IML PRODUCTION & ELECTRICITY GENERATION :
|Particulars ||Unit ||Financial Year 2018-19 || |
Financial Year 2017-18
|Rectified Spirit Produced (Lakh BL) ||Ugar ||153.04 || |
|Denatured Spirit Produced (Lakh BL) ||Ugar ||74.07 || |
|Potable Alcohol Produced (Lakh BL) ||Ugar ||61.99 || |
|Electricity Generated (Lakh KW) ||Ugar ||1149.15 || |
|Electricity Exported (Lakh KW) ||Ugar ||610.30 || |
|Electricity Generated (Lakh KW) ||Jewargi ||279.90 || |
|Electricity Exported (Lakh KW) ||Jewargi ||168.58 || |
Your Directors expect to procure about 18 to 20 Lakh MT sugarcane at Ugar and JewargiUnits during 2019-20 crushing season.
Our Company continues to pursue its environmental friendly approach towards Industrialgrowth. Constant improvements are being made in the process and equipments to minimize thedischarge of effluents and emissions.
The Company has not accepted fresh deposits from public pursuant to Section 73 or 76 ofthe Companies Act 2013 read with The Companies (Acceptance of Deposits) Rules 2014.However1 (one) Depositors who have not claimed his deposit after maturity as on 31stMarch 2019 and the amount outstanding as on that date was Rs.2.55 Lakh. These amountsare lying with the Company as there is litigation in Sangli Civil Court amongst the heirsabout the true ownership of the deposit. As and when court order is received amounts willbe paid.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Company has not advanced any loans pursuant to Section 186 of the Companies Act 2013.The Guarantees given to the financial institutions amounting to Rs.75 Cr. to Canara Bankand Rs.25 Cr. to Bank of Baroda. The investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements at NoteNo.C.
DIRECTORS RETIRE BY ROTATION:
Shri. Sachin R. Shirgaokar age 53 years is liable to retire by rotation atthis AGM & being eligible offers himself for reappointment. Being a fit and properperson Board intends to reappoint him as a Director.
Shri. Sohan S. Shirgaokar aged 37 years is liable to retire by rotation at thisAGM & being eligible offers himself for reappointment. Being a fit and proper personBoard intends to reappoint him as a Director.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation46 of SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015. The detailsof appointment of independent Directors are disclosed on Company's website with followinglinkHREF="http://www.ugarsugar.com/">www.ugarsugar.com
Re-appointment of Independent Directors for second term.
Mr. Rakesh Kapoor Dr. M. R. Desai Mr. V. Balasubramanian and Mr. DeepchandShah will be re-appointed for 2nd term for a period of 3 years.
Mr. M. G. Joshi and Mr. Deepak Ghaisas after completion of term of 5 yearsretire at the this Annual General Meeting (AGM) the Board places on record appreciationof services rendered and advice given by them during their tenure.
The Following two(2) Independent Directors are proposed to be appointed.
Mr. S. S. Gangavati BE Mach. and Sugar Technologist having vast experience isproposed for appointment as an Independent Director The Nomination and RemunerationCommittee has recommended his appointment and the board has approved the appointment asIndependent Director from this Annual General Meeting to be held on 14th August2019 a notice proposing his candidature is received from a member.
Mr. S. S. Gangavati will be appointed as an Independent Director in the AGM for aperiod of 3 years he meets the criteria of Independent Director.
Mrs. Suneeta Thakur Ex-Deputy Managing Director of Saraswat Bank Ltd. Punehaving vast experience is proposed for appointment as on Independent Director. TheNomination and Remuneration Committee has recommended her appointment and the board hasapproved the appointment as an Independent Director from this Annual General Meeting to beheld on 14th August 2019 a notice regarding her candidature is received from amember.
Mrs. Suneeta Thakur will be appointed as an Independent Director in the AGM for aperiod of 3 years she meets the criteria of Independent Directors.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulation 2015 the independent directors have evaluated theperformance of working Directors. The Board has carried out an annual performanceevaluation of its own performance the Directors individually as well as the evaluation ofthe working of its Audit Committees and Nomination & Remuneration Committees.
Nomination & Remuneration Policy:
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration and includes other matters as prescribed under the provisions of Section 178of Companies Act and Regulation 19 of SEBI (LODR) 2015. The Nomination & RemunerationPolicy is available on the website of the Company on the following link
During the year Four Board Meetings and Four Audit Committee Meetings were convenedand held the details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 we confirmthat-
i] That in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
ii] The directors had selected such accounting policies and applied them consistentlyand made judgment 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 of the profit and loss of the Company forthat period;
iii] The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv] The directors had prepared the annual accounts on a going concern basis;
v] The directors in case of listed company had laid down internal financial controlsto be followed by the
Company and that such internal financial controls are adequate and were operatingeffectively and;
vi] The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively;
Our Company has been following good Corporate Governance since its inception. Theshares of our Company are listed on Bombay Stock Exchange Ltd. and National StockExchange of India Ltd. We are regularly and timely complying with the requirements as perthe Listing Agreement. Company has paid the Annual Listed Fees for the Financial Year2018-19. As required by SEBI Guidelines a Corporate Governance Report is annexed.
CO-GENERATION AT UGAR & JEWARGI:
During this year electricity generated was 1429.05 Lakh KW of which we have exported778.88 Lakh KW through HESCOM BESCOM CESCOM MESCOM and GESCOM by consuming 4.72 LakhMT of Bagasse.
The production of Rectified Spirit was 153.04 Lakh BL which is one of the highestproductions so far as compared to 106.48 Lakh BL during the previous year. During the yearunder review we have supplied 74.07 Lakh BL to the Oil Companies. The production atdistillery has improved during the year.
INDIAN MADE LIQUOR (IML) AT UGAR:
The Company has manufactured 7.16 Lakh cases at Ugar during this year as against 7.34Lakh cases during the previous year. The demand for tetra Pack has increased as comparedto pet bottles. We are planning to shift to tetra pack from pet bottle in phased manner.Company has continued bottling of its products at M/s. K. S. Distilleries and M/s. SDFIndustries.
DEMATERIALIZATION OF SHARES:
Our Company has provided connectivity with NSDL & CDSL for dematerialization of itsshares for trading in electronic form under ISIN-No: INE071E01023. So far 93262351.Equity shares have been dematerialised by the shareholders i.e.82.90% of totalshareholding as on 31st March 2019. The annual fees of depositories for the FY2018-19 have been paid by the Company.
CONSERVATION OF ENERGYAND PARTICULARS OF EMPLOYEES:
Particulars pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo have been given under Annexure I. The disclosures as requiredunder Section 134(3) (m) of the Companies Act 2013 read with Rule 8 of The Companies(Accounts) Rules 2014 have been given under Annexure II. Both the annexure form part ofthis report.
UGAR THEATRE PVT. LTD.
Ugar Theatre Pvt Ltd was incorporated on 29-11-1977 with an intention to exhibitfilms for the Ugar people. With increased media facilities the film exhibition has becomeun-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. As the transactions are not material in nature thefinancials have not been consolidated as per the relevant Accounting Standards.
Brief Financials of the Company:
| ||31.3.2019 || |
|Particulars ||(Rs.) ||(Rs.) |
|Total Revenue ||381910 || |
|Total Expenditure ||267686 || |
|Profit Before Tax / (Loss) ||114224 || |
QUALIFYING REMARKS IN AUDITORS' REPORT:
There are no qualifying remarks in the Statutory Auditors Report.
The Secretarial Auditor has made following observations in his Report
I) Company has paid Fine of Rs. 339250/- to Bombay Stock Exchange for delay insubmission of PDF scan copy of the financial results for the Quarter ended September 2017under Regulation 33 of SEBI (LODR) 2015.
Reply : Company has submitted the Financial Results for September 2017 Quarter inXBRL Format within the stipulated time however there was delay in forwarding the PDFScan Copies due to the technical issues with the System. The Company had given a letterfor waiver of penalty to BSE and BSE has waived Rs.177000/- out of Rs. 516250/- andthe Company has paid the balance amount as penalty. During the year the Company hascomplied with all the requirements of SEBI.
The Company's Auditors M/s. Kirtane & Pandit LLP Chartered Accountants havingFRN-105215W were appointed in 77th Annual General Meeting for a term of fiveyears no ratification is required every year. They have confirmed their eligibility underSection 141 of the Companies Act 2013 for financial year 2019-20. The auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records are maintained by theCompany in respect of its Cost Audit of Sugar Industrial Alcohol and Electrical Energy.Your Directors have appointed Mr. V. V. Deodhar Cost Accountant Mumbai (Membership No.3813) on the recommendation of the Audit Committee to audit the cost accounts of theCompany for the financial year 2019-20 on a remuneration of Rs.230000/- subject to theratification by General Body.
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 CS Abhay Gulavani Company Secretaries in Practice Miraj (Membership No A28983)to undertake the Secretarial Audit of the Company who has consented to the same. TheReport of the Secretarial Audit Report is annexed herewith as "Annexure III".
CORPORATE SOCIAL RESPONSIBILITY
In view of the loss incurred during the year 2017-18 there was no eligible amount forCSR activities. The Report of the CSR is annexed herewith as "Annexure IV".
INTERNAL FINANCIAL CONTROL:
The Company has Internal Financial Controls with proper checks and balances to ensurethat transactions are properly authorized recorded and reported apart from safeguardingits assets. These systems are reviewed and improved on a regular basis.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. The transactionsentered into by the Company during the year were within the limits of the Powers of theBoard as prescribed in Section 188 read with Companies (Meetings of Board & itsPowers) Rules 2014. There are no materially significant related party transactions madeby the Company with Promoters Directors Key Managerial Personnel other designatedpersons or other related parties which may have a potential conflict with the interest ofthe Company at large.
The Company has taken Omnibus approval of Audit Committee for the Related PartyTransaction. All Related Party Transactions were placed before the Audit Committee and theBoard for their approval.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
Details relating to Related Party Transactions are shown in Form No. AOC-2: (Pursuantto 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.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRUBUNALSIMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATION IN FUTURE:
There are no significant and material orders passed by any regulatory authority courtor tribunal which shall impact the going concern status and company's operations infuture.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as "Annexure VI".
DETAILS OF REMUNERATION AS REQUIRED UNDER SECTION 178 & 197 (12):
Details of Remuneration as required under Section 178 and 197 (12) of the CompaniesAct 2013 Read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are given as "Annexure VII."
WHISTLE BLOWER POLICY/ VIGIL MECHANISM:
Pursuant to the provisions of Section 177 of the Companies Act 2013 read with Rule 7of Companies (Meetings of Board and its Powers) Rules 2014 and Clause 22 of the SEBI(Listing Obligations And Disclosure Requirements) Regulations 2015 the Company hasadopted a Whistle Blower Policy / Vigil Mechanism that encourages and supports itsDirectors & employees to report instances of unethical behavior actual or suspectedfrauds or violation of Company's Code of Conduct. It also provides adequate safeguardsagainst victimisation of persons who use this mechanism and direct access to the Chairmanof Audit Committee in exceptional cases. The Whistle
Blower Policy / Vigil Mechanism policy has been posted on web site of company on thelinkhttp://web.ugarsugar.com/Investor_Relations/Corporate_Announcements.asp?child=3&parent=7
PREVENTION PROHIBITION & REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE:
The Company has in place a policy on prevention prohibition & redressal of sexualharassment of women at work place and an Internal Complaints Committee has beenconstituted. No complaints are received during the year.
RISK MANAGEMENT POLICY
Details of Risk Management Policy as required under the provisions of Companies Act2013 is placed on the Company's websiteHREF="http://www.ugarsugar.com/">www.ugarsugar.com .
CHANGE IN NATURE OF BUSINESS IF ANY
There is no change in nature of Business of the company during the year.
Your Directors wish to place on record their sincere appreciation for the continuedsupport received from Managements of Central Bank of India Bank of Baroda Union Bank ofIndia and 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 TataPower Trading Co. Ltd. and Electricity Supply Company (ESCOMS) for transmission ofenergy.
Your Directors thank the Government of India Government of Karnataka Government ofMaharashtra Government Authorities Shareholders Cane suppliers Workers and Staff fortheir 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 |
|Place : Pune ||Chairman |
|Date : 22-05-2019 || |
|Regd. Office: Mahaveer Nagar || |
|Sangli-416416. || |