Your Directors have pleasure in presenting their 77 Annual Report together with theAudited Financial Statements for the period ended 31 March 2017.
All India Production of Sugar for the Season 2016-17 is expected to reach 203 Lakhtonnes as compared to the previous years production of 251 Lakh tonnes. TheGovernment of India has continued with the decontrol mechanism.
Our total crushing of sugar cane at Ugar and Jewargi during the season 2016-17 was9.93 Lakh MT bagging of Sugar 10.52 Lakh Qtls. and recovery of 10.53% and 8.91%respectively.
FINANCIAL RESULTS :
The brief financial results of the Company are as shown below:
|Particulars ||31.03.2017 || |
| ||Rs. in Lakh || |
Rs. in Lakh
|Profit before Depreciation & Amortisation ||3895.88 || |
|Depreciation & Amortisation ||1468.39 || |
|Profit Before Tax / (Loss) & Exceptional items ||2427.49 || |
|Provision for Tax (including deferred tax adjustment short provision for tax) / MAT Credit entitlement ||84.81 || |
|Profit after Tax / Net Profit / (Loss) ||2342.68 || |
|Less:- Provision for Corporate Dividend Tax || || |
|Balance of profit brought forward from previous year ||(1966.17) || |
|Balance Carried in Profit and Loss Account ||376.51 || |
|Earnings Per Share (EPS) ||2.08 || |
Transfer to Reserve: - No amount has been transferred to Reserve for the financial year2016-17.
Your directors have recommended payment of dividend @ 20% ( i.e. 0.20 per share ofRs.1/-) for the financial year 2016-17.
SUGAR AT UGAR:
| ||Sugar Season || |
|Particulars ||2016-17 || |
|Date of beginning of crushing season ||10-11-2016 || |
|Date of ending of crushing season ||30-01-2017 || |
|Number of Working Days ||82 || |
|Sugar Cane Crushed (Lakh MT) ||8.51 || |
|Recovery ||10.53% || |
|Sugar Produced (Lakh Qtls.) ||9.25 || |
SUGAR AT JEWARGI :
|Particulars ||Sugar Season || |
| ||2016-17 || |
|Date of beginning of crushing season ||10-11-2016 || |
|Date of ending of crushing season ||18-01-2017 || |
|Number of Working Days ||70 || |
|Sugar Cane Crushed (Lakh MT) ||1.42 || |
|Recovery ||8.91% || |
|Sugar Produced (Lakh Qtls.) ||1.27 || |
DISTILLERY IML PRODUCTION & ELECTRICITY GENERATION :
|Particulars ||Unit ||Financial Year || |
| || ||2016-17 || |
|Rectified Spirit Produced (Lakh BL) ||Ugar ||87.43 || |
|Denatured Spirit Produced (Lakh BL) ||Ugar ||37.03 || |
|Potable Alcohol Produced (Lakh BL) ||Ugar ||70.45 || |
|Electricity Generated (Lakh KW) ||Ugar ||646.94 || |
|Electricity Exported (Lakh KW ) ||Ugar ||320.86 || |
|Electricity Generated (Lakh KW ) ||Jewargi ||140.98 || |
|Electricity Exported (Lakh KW ) ||Jewargi ||72.58 || |
Your Directors expect to procure about 16 to 18 Lakh MT sugarcane at Ugar and JewargiUnits during 2017-18 crushing season.
ENVIRONMENTAL SAFETY :
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 31March 2017 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 disclosure regarding guarantees given to the financial institutions (i.e. Rs. 50 Cr.to Bank of India) and the Investments covered under the provisions of Section 186 of theCompanies Act 2013 are given in the notes to the Financial Statements at Note No. A-11.
Directors Retire by Rotation:
Mr. Sohan Sanjeev Shirgaokar aged 35 years is on the Board since 2014 as Non-ExecutiveDirector. He retires at this meeting and being eligible offers himself for re-appointment.
Mrs. Shilpa Kumar aged 50 years is on the Board since 2015 as Non Executive WomanDirector. She retires at this meeting and being eligible offers herself forre-appointment.
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 Companies website with followinglink .... http://web.ugarsugar.com/Investor_Relations/Corporate_Announcements.asp?child=3&parent=7
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 matter 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...... http://web.ugarsugar.com/Investor_Relations/Corporate_Announcements.asp?child=3&parent=7
During the year Six Board Meetings and Four Audit Committee Meetings were convened andheld the details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 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 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 had laid down internal financial controls to be followed by theCompany 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 Year2016-17. As required by SEBI Guidelines a Corporate Governance Report is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
As required under Regulation 34(3) of the SEBI (LODR) Regulations 2015 a detailedManagement Discussion and Analysis report has been given separately forming part of theannual report.
CO-GENERATION AT UGAR & JEWARGI:
During this year electricity generated was 787.92 Lakh KW of which we have exported393.44 Lakh KW through Tata Power Trading Company by consuming 2.5 Lakh MT of Bagasse.
The production of Rectified Spirit was 87.43 Lakh BL as compared to 131.98 Lakh BLduring the previous year. During the year under review we have supplied 37 Lakh BL to theOil Companies. The production at distillery has come down due to water shortage.
INDIAN MADE LIQUOR (IML) AT UGAR:
The Company has manufactured 7.93 Lakh cases at Ugar during this year as against 10.20Lakh cases during the previous year. The sales have substantially come down due to nonworking of IML section for 2 months which has affected 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 90992863 eq.shares have been dematerialised by the shareholders i.e.80.88% of total shareholding ason 31 March 2017. The annual fees of depositories for the FY 2016-17 have been paid bythe Company.
CONSERVATION OF ENERGY AND 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.
ASSOCIATE COMPANIES :
UGAR CONSLUTANCY LTD.
This Company is liquidation process has been completed during this year.
UGAR THEATRE PVT. LTD.
Ugar Theater 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. 30 January 2004 and the machinery wassold. The Company is presently engaged in providing warehousing facility to others.
QUALIFYING REMARKS IN AUDITORS REPORT:
There are no qualifying remarks in the Statutory Auditors Report and SecretarialAudit Report.
The Companys Auditors M/s. P. G. Bhagwat Chartered Accountants having FRN -101118W retire at the ensuing Annual General Meeting of the Company. They have completedtheir tenure of five years and are not eligible for reappointment. M/s. Kirtane &Pandit Chartered Accountants having FRN 105215W are proposed to be appointed as aStatutory Auditor in the ensuing Annual General Meeting. They have confirmed theireligibility under Section 141 of the Companies Act 2013 and the Rules framed thereunderfor appointment as a Statutory Auditors of the Company.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its Cost Audit of Sugar and Electrical Energy. Your Directors have appointedMr. V. V. Deodhar Cost Auditor Mumbai (Membership No. 3813) on the recommendation of theAudit Committee to audit the cost accounts of the Company for the financial year 2017-18on a remuneration of Rs. 2.30 Lakh subject to the ratification of 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 during previous years there is no eligible amount to be spent underCSR. 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 the transactions are properly authorized recorded and reported apart fromsafeguarding its assets. These systems are reviewed and improved on a regular basis. Wehave taken advice of M/s. Chitale & Co Chartered Accountant for strengthening the IFCsystem of the company.
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.
Form No. AOC-2: (Pursuant to clause (h) of sub-section (3) of section 134 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014) is attached in Annexure V.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 is annexedherewith as "Annexure VI".
PARTICULARS OF REMUNERATION
Details as required under the provision of section 197 (12) of the Companies Act 2013read with Rules 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are Placed on the CompanyS website www.ugarsugar.com as anannexure to the Directors Report. As Annexure VII.
As required under the provisions of Section 197(12) of the Companies Act 2013 readwith Rule 5 (2) and 5 (3) of the said Rules details of top ten employees will be madeavailable to any shareholder on request as provision of Section 136(1) of the said Act2013.
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 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.
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 IDBI Ltd. and Bank of India for providing working capital finance and Central Bankof India Bank of Baroda Sugar Development Fund for providing long term finance forCapital Investments Tata Power Trading Co. Ltd. and HESCOM for transmission 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 |
| ||P. V. Shirgaokar |
| ||Chairman |
|Place : Ugar Khurd ||DIN - 00151114 |
|Date : 29-05-2017 || |