Your Directors have pleasure in presenting their 78th Annual Report together with theAudited Financial Statements for the period ended 31 March st 2018.
All India Production of Sugar for the Season 2017-18 is expected to reach 315 Lakhtonnes as compared to the previous years production of 203 Lakh tonnes. TheGovernment of India has continued with the decontrol mechanism.
Our total crushing of sugar cane at Ugar and Jewargi during the season 2017-18 was21.29 Lakh MT bagging of Sugar 23.96 Lakh Qtls. and recovery of 11.25% and 10.01%respectively.
The brief financial results of the Company are as shown below:
| ||31.03.2018 || |
|Particulars ||Rs. in Lakh || |
Rs. in Lakh
|Total Revenue ||80191.41 || |
|Total Expenditure (excluding Depreciation & Amortisation) ||(84876.50) || |
|Profit before Depreciation & Amortisation ||(4685.09) || |
|Depreciation & Amortisation ||1947.92 || |
|Profit Before Tax / (Loss) & Exceptional items ||(6633.00) || |
|Provision for Tax (including deferred tax adjustment || || |
|short provision for tax) / MAT Credit entitlement ||186.08 || |
|Profit after Tax / Net Profit / (Loss) ||(6819.08) || |
|Other Comprehensive Income ||254.85 || |
|Total Comprehensive Income for the period (Comprising Profit || || |
|(Loss) and other Comprehensive Income for the period) ||(6564.23) || |
|Earnings Per Share (EPS) ||(6.06) || |
Although this year Company has done Maximum Crushing with good recovery due to steepfall in Sugar Prices there is a loss of Rs. (6819.08) Lakh. The Central Government istaking various measures to stabilise the sugar price like Export of Sugar providing 20Lakh MT minimum indicative export quotas (MIEQ) Ethanol policy. We are also expecting thefollowing incentives from Central/State Government: 1. Buffer Stock 30 Lakh MT 2.Increase in Ethanol Price
3. Sugar MSP (Minimum selling price) Rs.30 +.
Transfer to Reserve: - No amount has been transferred to Reserve for the financial year2017-18.
Due to the losses incurred during the year the Board has not recommended any Dividendfor the Financial Year 2017-18. (Previous year 2016-17 Dividend @20% (i.e. Re 0.20 pershare of Re 1/- each).
SUGAR AT UGAR:
| ||Sugar Season || |
|Particulars || || |
| ||2017-18 || |
|Date of beginning of crushing season ||27-10-2017 || |
|Date of ending of crushing season ||06-03-2018 || |
|Number of Working Days ||131 || |
|Sugar Cane Crushed (Lakh MT) ||17.84 || |
|Recovery ||11.25% || |
|Sugar Produced (Lakh Qtls.) ||20.50 || |
|SUGAR AT JEWARGI : || || |
| ||Sugar Season || |
|Particulars || || |
| ||2017-18 || |
|Date of beginning of crushing season ||08-11-2017 || |
|Date of ending of crushing season ||15-03-2018 || |
|Number of Working Days ||128 || |
|Sugar Cane Crushed (Lakh MT) ||3.45 || |
|Recovery ||10.01 || |
|Sugar Produced (Lakh Qtls.) ||3.46 || |
DISTILLERY IML PRODUCTION & ELECTRICITY GENERATION :
| || ||Financial Year || |
|Particulars ||Unit || || |
| || ||2017-18 || |
|Rectified Spirit Produced (Lakh BL) ||Ugar ||106.48 || |
|Denatured Spirit Produced (Lakh BL) ||Ugar ||28.10 || |
|Potable Alcohol Produced (Lakh BL) ||Ugar ||64.42 || |
|Electricity Generated (Lakh KW) ||Ugar ||1307.88 || |
|Electricity Exported (Lakh KW) ||Ugar ||685.00 || |
|Electricity Generated (Lakh KW) ||Jewargi ||316.70 || |
|Electricity Exported (Lakh KW) ||Jewargi ||204.09 || |
Your Directors expect to procure about 20 to 22 Lakh MT sugarcane at Ugar and JewargiUnits during 2018-19 crushing season.
Our Company continues to pursue its environmental friendly approach towards Industrialgrowth. Constant improvements are being made in the process and equipments to minimizethe discharge 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.However 2 (Two) Depositors who have not claimed their deposits after maturity as on 31stMarch 2018 and the amount outstanding as on that date was Rs.2.92 Lakh. These amountsare lying with the Company as there is litigation amongst the heirs about the trueownership of the deposits.As and when court order is received amounts will be 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. 50 Cr. to Union Bankof India and Rs. 66.55 Cr. to Bank of India. The investments covered under the provisionsof Section 186 of the Companies Act 2013 are given in the notes to the FinancialStatements at Note No.A-03.
DIRECTORS RETIRE BY ROTATION:
Shri. P. V. Shirgaokar age 79 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.
Shri. Shishir Shirgaokar aged 73 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.
Declaration is given by all Independent Directors:
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 followinglink
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulation 2015 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 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 Seven 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 theCompaniesAct 2013.
Pursuant to the provisions of Section 134(5) of the CompaniesAct 2013 we confirmthat-i] That in the preparation of the annual accounts the applicable accountingstandards had 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 ofthe profit and loss of the Company for that 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 andwere operating effectively 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 Year2017-18.As required by SEBI Guidelines a Corporate Governance Report is annexed.
CO-GENERATIONAT UGAR & JEWARGI:
During this year electricity generated was 1624.58 Lakh KW of which we have exported889.09 Lakh KW through Tata Power Trading Company HESCOM BESCOM CESCOM MESCOM andGESCOM by consuming 5.44 Lakh MT of Bagasse.
The production of Rectified Spirit was 106.48 Lakh BL as compared to 87.43 Lakh BLduring the previous year. During the year under review we have supplied 28.10 Lakh BL tothe Oil Companies. The production at distillery has improved during the year.
INDIAN MADE LIQUOR (IML)AT UGAR:
The Company has manufactured 7.34 Lakh cases at Ugar during this year as against 7.93Lakh cases during the previous year. The sales have substantially come down due to nonworking of IML Section for 2 months which has effected on our sales. Company hascontinued bottling of its products at M/s. K. S. Distilleries and M/s. SDF Industries.
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 91864682.Equity shares have been dematerialised by the shareholders i.e.81.66% of totalshareholding as on 31st March 2018. The annual fees of depositories for the FY 2017-18have 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 annexures form part ofthis report.
UGAR THEATRE PVT. LTD.
Ugar Theatre Pvt Ltd has again become our Associate Company during the year. It wasincorporated on 29-11-1977 with an intention to exhibit films for the Ugar people. Withincreased media facilities the film exhibition has become un-remunerative hence theactivity of film exhibition was stopped w.e.f. 30th January 2004 and the machinery wassold. The Company is presently engaged in providing warehousing facility to others. As thetransactions are not material in nature the financials have not been consolidated as perthe relevant Accounting Standards.
Brief Financials of the Company:
| ||31.3.2018 || |
|Particulars ||Rs. in Lakh || |
Rs. in Lakh
|Total Revenue ||378600 ||375503 |
|Total Expenditure ||458272 ||208506 |
|Profit Before Tax / (Loss) ||(79672) ||166997 |
QUALIFYING REMARKS INAUDITORSREPORT:
There are no qualifying remarks in the Statutory Auditors Report.
The Secretarial Auditor has made following observations in his Report
i) Company has received a letter levying penalty from Bombay Stock Exchange for delayin submission of PDF scan copy of the financial results for the Quarter ended September2017 under Regulation 33 of SEBI (LODR) 2015.
Reply:- Company has submitted the Financial Results for September 2017quarter in XBRL Format within the stipulated time however there was delay in forwardingthe PDF Scan copies due to the technical issues with the system. The Company has given aletter for waiver of penalty to BSE which is under consideration.
i) There has been delay in payment of Fair and Remunerative Price of Sugar cane for thesugar season 2017-18.
Reply:- Due to sudden fall in Sugar Prices there are financial crisis forthe entire Sugar Industry and efforts are on for completing the obligation.
The Companys Auditors M/s. Kirtane & Pandit LLP Chartered Accountantshaving FRN - 105215W were appointed for a term of five years subject to ratification everyyear. They have confirmed their eligibility under Section 141 of the Companies Act 2013and the Rules framed thereunder for reappointment as Auditors of the Company for financialyear 2018-19. As required under Clause 49 of the Listing Agreement 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 and Electrical Energy. Your Directors haveappointed Mr. V. V. Deodhar Cost Accountant Mumbai (Membership No. 3813) on the
recommendation of the Audit Committee to audit the cost accounts of the Company forthe financial year 2018-19 on a remuneration of Rs.230000/- subject to the ratificationby 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 SecretarialAudit Report is annexed herewith as "Annexure III".
CORPORATE SOCIAL RESPONSIBILITY
In order to fulfill the Social Commitments of the Company it has carried out CSRactivity and the eligible amount has been spent for various CSR activities. The Report ofthe 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 arms 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 theCompanys 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 STATUSAND COMPANYS 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 companys operations infuture.
EXTRACT OFANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as "Annexure VI".
DETAILS OF REMUNERATIONAS 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 behaviour actual or suspectedfrauds or violation of Companys 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 / VigilMechanism policy has been posted on web site of company on the linkhttp://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 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 Companys website www.ugarsugar.com.
CHANGE IN NATURE OF BUSINESS IFANY
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 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 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 |
| ||B. G. Kulkarni |
|Place : Pune ||GM Corporate Affairs & Company Secretary |
|Date : 25-05-2018 ||(F-2805) |
|Regd. Office: Mahaveer Nagar || |
|Sangli 416416. || |