ANNUAL REPORT 1998-99
WESTERN ORISSA SUGAR LIMITED
To The Members,
Your Director have pleasure in presenting their 8th Annual Report together
with Audited Accounts for the year ended 31st March,1999.
SUGAR SEASON 1998-99
Even though there was general slowdown in the economy as a whole, your
Company was able to registering a growth in production of about 95% over
the previous year. Crushing operation commenced on 10th Jan,1999 and ended
on 7th April 1999. The operational figures of the season.
Duration of the season (Days) 88 110
Cane Crushed (MT) 51000 28785
Average Recovery (%) 8.36 8.30
Sugar Production (MT) 4710 2471
Capacity Utilised (%) 17 9.65
Your Directors are optimistic about the future growth and the potential of
the sugar plant. Availability of cane, one of the main constraints faced by
the Company in not achieving optimum capacity utilisation, is expected to
ease. The completion of the Upper Indravati Project will result in an
increase in irrigated land in the near vicinity of the plant. The Tissue
Culture Laboratory will substantially aid in the growth of high yielding
Sugar Cane, enabling the Company to procure adequate quantity of
qualitative cane in the future years. There is an increased willingness by
the farmers in the surrounding areas of the Companys unit to cultivate
cane, in view of the irrigation facilities in the area and timely
realisations from cane. Your Directors expect to-procure about 1.5 lacs MT
of Sugar cane during the forthcoming crushing season.
The Rehabilation package which has already been submitted to the Bankers is
under their active consideration and likely to be finalised very soon.
CANE AND SUGAR POLICY
The Statutory Minimum Cane price (SMP) for the season 1998-99 was increased
to Rs 52.70 per quintal linked with basic recovery of 8.5%. However the
State Advisory Prices (SAP) as directed by the Govt of Orissa vide its
Notification No. FG- 111-5/98-34988 dt 8.12.98 remain unchanged at Rs 75.00
per quintal .Your Company has paid in full all dues of the cane growers and
transporters till date. In addition your Company is only Agro based
industry in the State of Orissa or even may be in the Country to introduce
two insurance scheme as under for the benefit of cane growing farmers as
(a) Individual insurance covers of Rs 20,000 against accidental death for
one year of all cane supplying farmers
(b) Cane Crop Insurance against damage to the crop from the date of
plantation till harvesting to the extent value of input as per the Company
The Company since inception commissioned its Effluent Treatment Plant and
continues its environmental friendly approach. Continuous improvements are
made in the process and equipments to minimise pollutants in the vicinity
of the plant.
Due to under utilization of capacity as well as financial crunch your
Company is unable to pay the listing fees on time to the Stock Exchanges.
However, after the formulation of rehabilation package your Company will
Pay all the dues of the Exchanges and the securities of the Company will
continue to be listed at the Bhubaneswar Exchange.
During the year the Company has not accepted/renewed any fixed deposit from
the public in terms of Sec 58A of the Companies Act 1956. During the year a
sum of Rs 1.66 lacs has been repaid to Deposit holders against their claims
of maturity with interest. There are no overdue deposits other than
Lt. Col. (Retd) Vinayak Nalawade resigned from the Board during the year.
Your Directors place on record his appreciation for the services rendered
by Lt.Col.(Retd) Vinayak Nalawade. Industrial Promotion & Investment
Corporation of Orissa Limited (IPICOL) nominated Mr U.N.Behera Managing
Director of IPlCOL on the Board of the Company. In the interim, Mr.R.
Balakrishnan, Managing Director of IPICOL was nominated on the Board of the
Company in place of Mr A.P.Padhi. Nomination of Mr R.N.Rath from the Board
of Directors was withdrawn by IPICOL during the year. Mrs Neelam Kolhatkar,
retires by rotation at the ensuing Annual General Meeting, and being
eligible offers herself for re-appointment.
Mr Sanjay Kolhatkar was redesignated as Chairman and Managing Director of
the Company with effect from 8 November 1999 for a period of five years. Mr
Sumeet Mehta was appointed as Executive Director for a period of five years
with effect from 15 September 1999 on the terms and conditions as approved
by the Board of Directors. The approval of the Members is now being sought
at the 8th AGM for the appointment and payment of remuneration to Mr Sanjay
Kolhatkar as Chairman and Managing Director and Mr Sumeet Mehta as
Executive Director of the Company.
M/s N.N.Das & Co. Chartered Accountants Calcutta, Auditors of the Company
retire at the ensuing Annual General Meeting and being eligible offer
themselves for reappointment.
PARTICULARS OF EMPLOYEES
There are no employees in respect of whom information under Section 217
(2A) of the Companies Act 1956 is applicable.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING
Information pertaining to conservation of energy, technology absorption and
foreign exchange earnings and outgo, pursuant to section 217(1)e of the
Companies Act,1956 have been given under annexure, forming an integral part
of this Report.
Relations during the year with the Executives, Staff and the Employees of
the Company were normal.
Your Directors are thankful to the managements of State Bank of India/Bank
of India for providing fresh working capital for the season of 1998-99.
Your Directors thank to the Debenture holders for their active support to
the rehabilation package by consenting to the reshedulement proposed by the
Your Directors also wish to express their appreciation for the support and
contribution extended by the Shareholders, Fixed deposit holders, Cane
growers, Transporters and contractors, Customers, Financial Institutions,
State & District Co-operative Banks, Central & State Government
Authorities, for their active support and co-operation in the revival of
For and on behalf of the Board of Directors
Chairman and Managing Director
Place: Nandanvan, Orissa
Date : 27 November,1999.
ANNEXURE TO DIRECTORS REPORT
RESEARCH AND DEVELOPMENT
1. Specific areas in which R&D carried out by the Company.
a. Heat treatment Therapy to treat Sugar cane seeds.
b. Multiplication of foundation cane seeds by rearing of Nurseries.
c. Pest control Measures to protect sugar cane from diseases.
d. Ratoon management for Sugar cane crops .
e. Drip Irrigation.
f. Development of cab\new seed plant in Tissue Culture Laboratory.
2. Benefits derived as result of above R&D: Availability of high yielding
disease free cane to the Company and higher financial return to the Cane
3. Future plan of action
a. Continuous research of better yielding disease-free variety of cane
b. Setting up of a Biological Control Laboratory .
c. Expansion of Tissue culture laboratory.
4. Expenditure on R & D
a. Capital : Rs 10.00 lacs
b. Recurring : Rs 5.00 lacs approx
c. Total : Rs 15.00 lacs approx
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1. Efforts, in brief, made towards technology absorption, adaptation and
innovation: The Research & Development Department and Technical Personnel
keep themselves abreast of the technical developments and innovations
relating to the Company s product and continuous efforts are made for
improvement in operations for better quality and cost effectiveness
2. Benefits derived as a result of the above efforts e.g. product
improvement, cost reduction, product development import substitution etc.:
Benefits will be known after three of four planting sessions.
3. In case of imported technology(imported during the last 5 years reckoned
from the beginning of the financial year) No imported technology used.
FOREIGN EXCHANGE EARNINGS AND OUTGO: Nil.