Mar 31, 2018
DIRECTORS'' REPORT
To,
The Members,
The Directors have pleasure in placing the 45th Directors'' Report along with the Audited Statement of Accounts for the year ended on 31st March, 2018.
Financial Performance
The Financial performance of the Company during the year ended 31st March 2018 as under :
Performance of Divisions:-Sugar Division
Crushing season till 31st March, 2018 consisted of sugar seasons of 2017. The company has crushed 103.26 Lacs qtls. of cane and the season was for 138 days. Sugar sale was Rs. 39204.87 lacs during the year under review as against Rs.28182.49 lacs during the previous financial year. The other details are as under :
Year 31-03-2018 |
Year 31-03-2017 |
|
Gross Working days |
138 |
121 |
Total Cane Crushed (qtls .) |
10326624 |
8832402 |
White sugar Produced (qtls) |
994395 |
859577 |
Average Recovery |
9.72% |
9.76% |
For the year ended as at |
For year ended as at |
|
31st March, 2018 |
3 1st March, 2017 |
|
(Rs. in Lacs) |
(Rs. in Lacs) |
|
Profit before interest, depreciation & tax |
5349 |
5754 |
Less: Interest |
-1072 |
-851 |
Depreciation |
-1345 |
-974 |
Profit before tax |
2932 |
3929 |
Provision for taxation |
0 |
-115 |
Provision for taxation (deferred) |
-1045 |
-102 |
Net Profit before extraordinary Items |
1887 |
3712 |
Add: Extra-ordinary item |
0 |
-21 |
Net Profit |
1887 |
3691 |
Earnings Per Share of Rs 2/- each |
2.05 |
4.03 |
Overall Performance
For the year ended on 31st March, 2018, sales stood at Rs. 46978.32 Lacs (net of excise duty) against the Rs. 335302.87 Lacs (net of excise duty) of previous financial year ended as at 31-03-2017). During the financial year under review, the company had no trading of sugar, whereas during the preceding financial year sugar trading was Rs. 1127.57 lacs). Profit after interest and depreciation stood at Rs.
2932.00 Lacs as against the profit of Rs. 3929.00 Lacs in the previous year. Profit after tax for the year ended March 31, 2018 was Rs.1886.68 Lacs compared to profit of Rs. 3690.87 Lacs in the previous year.
Dividend
Your directors have not recommended any dividend for the financial year ended 31st March 2018.
Transfer to reserves :
The entire surplus of Rs. 1886.68 lacs has been transferred to Other Equity.
Finance and Accounts
As mandated by the Ministry of Corporate Affairs, the financial Statement for the year ended on March 31, 2018 has been prepared in accordance with the Indian Accounting Standard (IND AS) notified under Section 133 of the Companies Act, 2013 reads with Companies (Accounts) Rules, 2014. The estimates and judgment relating to the Financial Statement are made on a prudence basics, so as to reflect a true and fair manner, the form and substance of transaction and reasonably present the Company''s state of Affairs, profits and cash flow for the year ended March 31, 2018. Accordingly, the figures for the previous year have been recanted as and where required to make these comparable.
Distillery :
During the year ended as at 31-03-2018, Company Produced 105.11 Lacs BL of Rectified Spirit with a recovery of 22.63 % , which is better in comparison of preceding year production of 103.45 Lacs BL. with a recovery of 22.41%. Sale of RS was Rs.4211 Lacs as against Rs. 4125 Lacs.
Co-Generation:
During the crushing season under report, the company produced 7,90,97,890 KWH power and exported 4,76,63,795 KWH to UPPCL. Power sale was Rs. 2183 lacs as against Rs. 1749 lacs.
Company, retire by rotation u/s 152 of the Companies Act,
2013 and being eligible, offered themselves for reappointment at the ensuing Annual General Meeting. Dr. Kirti Singh, Director of the Company resigned and the Board placed its gratitude on record for his valuable guidance, advise and suggestions to the Company during his tenure. The Company appointed Dr. S.B Singh as Additional Director in the Board meeting held on 12th February 2018. The Company has received a notice from a shareholder proposing his candidature for the office of the Director of the Company under sections 149, 152 and 160 of The Companies Act, 2013 along with requisite fees of Rs.1,00,000/- through cheque no. 107 dated 03-07-2018 drawn on HDFC Bank in this regard. The Board also recommended his appointment as Independent Director of the Company u/s 160 of the Companies Act,2013 in the ensuring AGM.
Public Deposits
During the financial year ended 31-03-2018, the company has not accepted any public deposits.
Corporate Debt Restructuring-(CDR)
The Company has successfully exit from CDR vide CDR EG letter dated 26-07-2017 and remitted the full payment against RoR during the year under review.
Listing Agreement
The equity shares of the company are listed with the Bombay Stock Exchange Limited and National Stock Exchange Limited and listing fees for 2018-19 had been duly paid.
Directors'' Responsibility Statement
In pursuance of sub-section (5) of Section 134 of the Companies Act, 2013, in respect of Directors'' Responsibility Statement, the Board of Directors confirms:
(i) that in the preparation of the annual accounts for year ended on March 31, 2018 the applicable accounting standard have been followed by the Company.
(ii) that the directors of the company have selected such accounting policies, applied them consistently, made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended on that date.
(iii) that the directors of the Company have taken proper and sufficient care for the maintenance of adequate accounting in accordance with provisions of the Companies Act, 2013, for safeguarding the assets of the company and for detecting fraud and other irregularities; and
(iv) that the directors of the Company have prepared the annual accounts on a going concern basis.
(v) that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
Auditors
M/s. Agiwal & Co, Chartered Accountants, New Delhi, Auditors of the Company retires at the conclusion of the forthcoming Annual General Meeting and being eligible, offered themselves for reappointment. They have furnished a certificate to the effect that their proposed reappointment, if made, will be in accordance within the limits specified u/s 139 of the Companies Act, 2013. Pursuant to the provisions of Section 139, 142 and other applicable provisions, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 the existing Auditors can be re-appointed to hold office maximum up to the conclusion of 49th Annual general meeting of the Company. Accordingly the Board propose for reappointment of existing Auditors M/s. Agiwal & Co, Chartered Accountants, New Delhi to hold office up to the conclusion of 49th Annual General Meeting on such remuneration plus Goods and service tax, out-of-pocket, travelling and living expenses, etc., as may be mutually agreed between the Board of Directors of the Company and the said Auditors.
However, their appointment as Statutory Auditors of the Company shall also be required to be ratified by the Members at every Annual General Meeting.
Auditors'' Report
The comments on the statement of account referred to in the report of the auditors are self-explanatory, and explained in the appropriate Notes to the Accounts. Secretarial Auditors
Ms. Pragati Gupta, Practicing Company Secretaries were appointed as Secretarial Auditors of the Company for the year 2017-18 as required under Section 204 of the Companies Act, 2013 and Rules made there under. The Secretarial Audit report for FY 2017-18 forms part of the Annual Report (Annexure to the Directors'' Report in Form MR- 3) as annexed as Annexure-9 to this report and carries no qualifications, reservations, adverse remarks or disclaimers and hence no explanations are required.
The Board appointed Ms. Pragati Gupta, Practicing Company Secretaries (Membership no. ACS- 19302) , as Secretarial Auditor of the Company for the financial year 2018-19.
Cost Auditors
The Central Government approved the appointment of M/s. Aman Malviya & Company, Cost Auditor, Lucknow as Cost Auditors for conducting Cost Audit for Sugar and Industrial Alcohol businesses for the year 31st March 2018, report of which was placed before the Board. The Board approved their appointment for the year 2018-19 and their remuneration is subject to approval by the Company in the forthcoming Annual General Meeting.
Directors
At the ensuing Annual General Meeting Shri Sanjay Jhunjhunwala and Shri S. C. Agarwal, Directors of the prioritize, manage, monitor and report on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.
The Company has introduced several initiatives for risk management including the introduction of audit functions and processes to identify and create awareness of risks, optimal risk mitigation and efficient management of internal control and assurance activities.
Corporate Social Responsibility
The Company constituted a Corporate Social Responsibility (CSR) Committee (for details please refer Corporate Governance Report) pursuant to the requirement of Section 135(1) of Companies Act, 2013. The CSR policy of the Company, interalia , list the activities that can undertake or supported by the Company for CSR, composition and meetings of CSR committee, annual allocation for CSR activities, area of CSR projects, criteria for selection of CSR, modalities of execution / implementation of CSR activities and the monitoring mechanism of CSR activities / projections. During the year under report, the Company spent Rs.32.00 lacs towards CSR as against its obligation Rs.38.02 lacs. The Board ensured that balance amount of Rs. 6.02 Lacs on CSR will be spent during the forthcoming Financial Year 2018-19. The details of CSR activities undertaken by the company are mentioned in the prescribed format in the Annexure -4 to this report. Conservation of Energy, Technology Absorption and Foreign Exchange and Outgo
Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure -1.
Research and Development
The details relating to Research and Development activities carried out by the company during the year are stated in annexure to this report.
Particulars of Employees
The disclosure as required under the provisions of Section 197 (12) of the Companies Act, 2013, read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of the Company has been given in ''Annexure 2'' and forms part of this Report.
Corporate Governance
As required under Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015 , a separate section on Corporate Governance forming part of the Directors'' Report and the certificate from Practicing Company Secretary Ms. Pragati Gupta, confirming the compliance of the conditions on Corporate Governance is attached as Annexure-3 to this report.
Management Discussion and Analysis Report The Management Discussion and Analysis Report on the business and operations of the company is attached to this report as ''Annexure-5''.
(vi) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Significant and Material Orders
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future. Audit Committee and Vigil Mechanism Pursuant to requirement of section 177(1) of Companies Act, 2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Regulation 18 and Regulation 22 of SEBI (LODR) Regulation 2015, your Company has already formed the Audit Committee, composition of which is covered under Corporate Governance report section of this Annual Report.
The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Regulations, includes appointment of a Whistle Officer who will look into the matter, conduct detailed investigation and take appropriate disciplinary action. The Company has formulated a vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the management their genuine concern about behavior of employees, the details of which are incorporated in the report on the corporate governance. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Whistle Blower Officer or to the Chairman of the Audit Committee. During the year under review, no employee was denied access to Whistle Blower Officer or Audit Committee and no cases under this mechanism were reported in the company and any of its subsidiary / associates.
The Policy on vigil mechanism and whistle blower policy has been uploaded on the Company''s website at the link: http://www.kmsugar.com.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith in form no. MGT-9 as Annexure -7 to this Report. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Risk Management
The Company aims to have a formalized and systematic approach for managing risks across the Company. It encourages knowledge and experience sharing in order to increase transparency on the key risks to the Company to the extent possible. This approach increases risk awareness, and ensures proper management of risks as part of the daily management activities.
The objective of the Company''s risk management process is to support a structured and consistent approach to identify,
Requirements) Regulations,2015.
Board Evaluation
Pursuant to the requirement of the Companies Act, 2013, the performance evaluation of the independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.
The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board as explained under the Corporate Governance section of this Annual Report. In a separate meeting of Independent Directors, performance of Non Independent Directors was evaluated.
Committees of The Board
Currently, the Board has 4 committees. A detailed note on the Board and its committees is provided in the Corporate Governance Report section of this Annual Report. The composition of the committees and compliances, as per applicable provisions of the Act and Rules, are as follows:
Name of the |
Composition of the |
Highlights of duties, |
committee |
committee |
responsibilities and activities |
Audit committee |
Mr.H.P Singhania-Chairman |
0 All recommendations |
Mr.R.S Shukla-Member |
made by the committee |
|
Mr.Sanjay Jhunjhunwala- |
during the year were |
|
Member |
accepted by the Board. |
|
Mr.S.K Gupta-Memb er |
0 The Company has adopted the Whistle Blower Mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud. 0 The Company has formed the Related Party Transaction Policy. |
|
Nomination and |
Mr.H.P Singhania-Chairman |
0 The Committee oversees |
remuneration |
Mr.R.S Shukla-Member |
and administers executive |
committee |
Mr.S.K Gupta-Member |
compensation. 0 All recommendations made by the committee during the year were accepted by the Board. |
Stakeholders |
Mr.H.P Singhania-Chairman |
0 The Committee reviews |
relationship |
Mr.R.S Shukla-Member |
and ensures redressal of |
committee |
Mr.Aditya Jhunjhunwala- |
investor grievances. |
Member |
0 The committee noted that |
|
Mr.S.K Gupta-Member |
the grievances of the investors reported during the year, if any. |
|
Corporate social |
Mr.L.K Jhunjhunwala- |
0 The Board as laid down |
responsibility |
Chairman |
the Company''s policy on |
committee |
Mr.Sanjay Jhunjhunwala- |
Corporate Social |
Member |
Responsibility (CSR). |
|
Mr.S.K Gupta-Member |
0 The CSR policy is uploaded on Company website, www.kmsugar.com |
Particulars of Loans, Guarantee or Investments
As per the requirement of section 186(4) of Companies Act, 2013, particulars of loans given, investments made, guarantees given or securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the
Industrial Relation
The industrial relations have been cordial at all plants of the Company during the year.
Subsidiary Company
The Company has now no subsidiary Company as it had sold its Equity holding in M/s. K.M. Energy Private Limited during the year under review.
Number Of Meetings Of The Board
The Board met four times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (LODR) Regu., 2015.
Policy on Directors'' Appointment And Remuneration
The Company seeks to maintain an appropriate mix of Executive and Independent Directors in order to maintain the independence of the Board and segregate the functions of governance and management. As at year end, the Board consists of 10 members, one of whom is Managing Director, three of whom are Whole-time directors, five are Independent directors and one is a Nominee director . The Company has five Independent Directors and all are qualified personnel with requisite qualifications, experience, positive attributes and satisfy all the criteria as set out under Schedule IV of Companies Act, 2013. These Independent Directors are only eligible for sitting fees for attending Board meetings and Committee meetings and other out of pocket expenses duly made for attending meetings of the Board or any committee of the Board thereof. Remuneration proposed for Whole Time Directors is in accordance with the Remuneration Policy approved by Nomination and Remuneration Committee of the Board. Your Company, in compliance with section 178 (1) of the Companies Act, 2013 read with The Companies (Meeting of Board and its Powers) Rules, 2014, has duly constituted a Nomination and Remuneration Committee. This committee is chaired by an Independent Director and formulates the criteria for determining qualifications, positive attributes, independence of a Director and other matters.
Appointment and the remuneration of Board members, key managerial personnel or one level below the Board level is fixed on the basis of the recommendation of the Nomination and Remuneration Committee made to the Board, which may ratify them, with or without modifications.
Disclosures pursuant to the requirements of section 197
(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been made in Annexure 2 of this Board Report. Declaration by Independent Directors As per the requirement of section 149(7), the Company received a declaration from every Independent Director that he or she meets the criteria of independence as laid down under section 149(6) read with rule 5 of the Companies (Appointment and Qualification of Directors) Rule, 2014 and SEBI ( Listing Obligations and Disclosure financial statements. The Company is in compliance with the limits as prescribed under Section 186 of Companies Act, 2013 read with rule 11 of the Companies (Meeting of Board and its Powers) Rules, 2014.
Particulars of contracts or arrangements with Related Party
The Company''s policy on related party transactions may be accessed on the Company''s website at http://www.kmsugar.com. Particulars of contracts or arrangements with Related Parties referred in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Note to Accounts no. 35.17 and also in Form AOC-2 as Annexure-6.
Material Changes and Commitments Affecting Financial position between the end of the Financial Year and Date of Report.
No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.
Acknowledgment
Yours Directors place on record their acknowledgement and sincere appreciation of all the bankers and financial institutions for their continued assistance. They further appreciate and acknowledge with gratitude the cooperation and assistance received from all executives, staff and workmen of the Company.
For and on behalf of the Board of
K. M. Sugar Mills Ltd.
Sd/-
L. K. Jhunjhunwala Chairman
Date:07.08.2018
Place:Lucknow
Mar 31, 2015
The Directors have pleasure in placing the 42nd Director's Report
along with the Audited Statement of Accounts for 18 months ended on
31st March, 2015. It is also pertinent to mention here that in terms of
the requirement of section 2(41) of the Companies Act, 2013, the
Company aligned its financial year from April- March. Hence, accounts
for the 18 months started on 1st October 2013 to 31st March, 2015 are
being placed. Further, subsequent financial years of the Company shall
begin on 1st April and end as on 31st March.
Financial Performance
The Financial performance of the Company during the year 18 months
ended 31st March 2015 as under:
(Rupees in Lacs)
For 18 as at
Months 30th
ended as at September,
31st 2013
March,2015 (Rs.)
(Rs.)
Profit before interest, 3700 3504
depreciation & tax
Less: Interest (1373) (1324)
Depreciation (1426) (901)
Profit before tax 901 1279
Provision for taxation (including (103) -
FBT) (49) (19)
Provision for taxation (deferred)
Net Profit before extraordinary 749 1260
Items
Add: Extra ordinary item (0) (0)
Net Profit 749 1260
Earning Per Share of Rs 2/- each 0.81 1.37
Overall Performance
For the period of 18 months ended on 31st March, 2015, sales stood at
Rs. 55044.84 Lacs (net of excise duty) against the Rs. 27258.79 (net of
excise duty) of previous financial year 2012-13( 12months ended on
30-09-2013). During the financial year under review, the company had
done trading of sugar for Rs. 1330.34 lacs whereas during the
preceding financial year sugar trading was Nil). Profit after interest
and depreciation stood at Rs. 901 Lacs as against the profit of Rs.
1279 Lacs in preceding year. Profit after tax for the 18 months ended
March 31, 2015 was Rs.749 Lacs compared to profit of Rs. 1260 Lacs in
the preceding year.
Dividend
Due to accumulated losses your directors have not recommended any
dividend for the financial year ended 31st March 2015.
Transfer to reserves:
Performance of Divisions:- Sugar Division
Crushing season till 31st March, 2015 consisted of two sugar seasons
for 18 months for the Company. The company has crushed 183.48 Lacs
qtls. of cane and the season ran for 263 days. Sugar sale was Rs.47441
lacs as against Rs.23249 lacs. The other details are as under:
18 months Season
ended 2012-2013
31-03-2015 (12 months)
Gross Working days 263 142
Total Cane Crushed (qtls.) 18348401 9156678
White sugar Produced 1708881 877655
(qtls)
Average Recovery 9.32% 9.60%
Co-Generation:
During the crushing season reported the company produced 16,44,42,230
KWH power and exported 9,82,95,057 KWH to UPPCL. Power sale was Rs.4668
lacs as against Rs.2395 lacs.
Distillery
During the 18 months ended as at 31-03-2015, Company Produced 167.48
Lacs BL of Rectified Spirit with a recovery of 21.12% which is better
in comparison of preceding year production of 85.96 Lacs BL. with a
recovery of 20.41% during preceding Financial Year 2012-2013 ( twelve
months). Sale of RS and Country liquor were Rs.6475 lacs as against
Rs.2587 lacs
Reference to BIFR Under Section 15 and Other Applicable provisions of
the Chapter III of the Sick Industrial Companies ( Special Provisos )
Act , 1985
As mentioned in the last report that due to erosion of the Net worth of
the Company, the reference was registered with the Board for Industrial
and Financial Reconstruction (BIFR) in terms of the provisions of the
Sick Industrial Companies ( Special Provisions) Act , 1985 on
28-02-2013 on the basis of audited accounts for the year ended 30th
September,2012. The reference made with BIFR is still pending.
Auditors
M/s. Mehrotra & Mehrotra, Chartered Accountants, New Delhi, Auditors of
the Company retires at the conclusion of the forthcoming Annual General
Meeting and being eligible, offer themselves for reappointment. They
have furnished a certificate to the effect that their proposed
reappointment, if made, will be in accordance within the limits
specified u/s 139 of the Companies Act, 2013. Pursuant to the
provisions of Section 139, 142 and other applicable provisions, of the
Companies Act, 2013 read with the Companies (Audit and Auditors) Rules,
2014 the existing Auditors can be re-appointed to hold office maximum
up to the conclusion of 44th Annual general meeting of the Company,
where after new Auditor shall be required to be appointed. Accordingly
the Board propose for re- appointment of existing Auditors to hold
office up to the conclusion of 44th Annual General Meeting for audit of
financial statements for year ending at 31st March, 2017, subject to
ratification their continuance by shareholders at annual general
meeting.
Auditors' Report
The comments on the statement of account referred to in the report of
the auditors are self-explanatory, and explained in the appropriate
notes to the accounts.
Secretarial Auditors
M/s Amit Gupta & Associates, Practicing Company Secretaries were
appointed as secretarial auditors of the Company for the year 2013-15
as required under Section 204 of the Companies Act, 2013 and Rules made
thereunder. The secretarial audit report for FY 2013-15 forms part of
the Annual Report (Annexure to the Directors' Report in Form MR. 3) and
carries no qualifications, reservations, adverse remarks or disclaimers
and hence no explanations are required. The Board has further
appointed M/s Amit Gupta & Associates, Practicing Company Secretaries,
as secretarial auditor of the Company for the financial year 2015-16.
Cost Auditors
The Central Government approved the appointment of M/s. Aman Malviya &
Company, Cost Auditor, Lucknow as Cost Auditors for conducting Cost
Audit for Sugar and Industrial Alcohol businesses for the 18 months
ended 31st March 2015, report of which shall be submitted in due course
of time The Board has approved their appointment for the year 2015-16
and their remuneration is subject to approval by the Company in the
forthcoming Annual General Meeting.
Directors
At the ensuing Annual General Meeting Shri L.K. Jhunjhunwala and Shri
Adiya Jhunjhunwala, Directors of your Company, retire by rotation u/s
152 of the Companies Act, 2013 and being eligible had offered
themselves for re-appointment at the ensuing Annual General Meeting.
Ms. Shruti Modi who was appointed as an Additional Director of the
Company by passing a resolution by circulation on 30-03-2015, resigned
on 28-05-2015. Further, Shri L.K. Jhunjhunwala, Chairman-cum-
Director, Shri Aditya Jhunjhunwala, Managing Director, Shri Sanjay
Jhunjhunwala, Jt. Managing Director and Shri S.C. Agarwal, Executive
Director were appointed at the Annual General Meeting held on
19-03-2012 for a period of three years w.e.f. 1st March,2013 to 28th
February,2015 and their term expire thereafter. After having been
recommended by the Nomination & Remuneration Committee of the Company,
the Board recommended their appointment in the Board meeting held on
14-02-2015 for a period of 5 ( five ) years w.e.f. 1st March,2015 to
29th February,2020. Mrs. Madhu Mathur were appointed as Independent
Directors of the Company by the Board in their meetings held on
28-05-2015 and Mr. H.P. Singhania, Mr. S.K. Gupta, Dr. Kirti Singh and
Mr. R.S. Shukla were appointed as Independent Directors of the Company
by the Board in their meetings held on 11-08-2015 respectively, subject
to approval of the shareholders at general meeting. In terms of Section
149, 150 and 152 read with Schedule IV and any other applicable
provisions, if any of the Companies Act, 2013 and rules made thereunder
and Clause 49 of the Listing Agreement, the approval of the
shareholders is sought for their appointment as Independent Directors
for a term of five consecutive years from the original date of
appointment. The Board considers that their continued association would
be of immense benefit to the Company and it is desirable to continue to
avail their services.
Public Deposits
During the financial year ended 31-03-2015 for the period 18 of months,
the company has not accepted any public deposits.
Listing Agreement
The equity shares of the company are listed with the Bombay Stock
Exchange Limited and National Stock Exchange Limited and listing fees
for 2015-16 had been duly paid.
Directors' Responsibility Statement In pursuance of sub-section (5) of
Section 134 of the Companies Act, 2013, in respect of Directors'
Responsibility Statement, the Board of Directors confirms:
(i) that in the preparation of the annual accounts for the 18 months
ended on March 31, 2015 the applicable accounting standard have been
followed by the Company.
(ii) that the directors of the company have selected such accounting
policies, applied them consistently, made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year and of
the profit of the Company for the year ended on that date.
(iii) that the directors of the Company have taken proper and
sufficient care for the maintenance of adequate accounting in
accordance with provisions of the Companies Act, 2013, for safeguarding
the assets of the company and for detecting fraud and other
irregularities; and
(iv) that the directors of the Company have prepared the annual
accounts on a going concern basis.
(v) that the directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
(vi) that the directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Significant and material orders
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and the
Company's operations in future.
Audit committee and vigil mechanism
Pursuant to requirement of section 177(1) of Companies Act, 2013 read
with Rule 6 of the Companies (Meeting of Board and its Powers) Rules,
2014 and Clause 49 of Listing Agreement, your Company has already
formed the Audit Committee, composition of which is covered under
Corporate Governance report section of this Annual Report. The Vigil
Mechanism of the Company, which also incorporates a Whistle Blower
Policy in terms of the Listing Agreement, includes appointment of a
Whistle Officer who will look into the matter, conduct detailed
investigation and take appropriate disciplinary action. Protected
disclosures can be made by a whistle blower through an e-mail, or
dedicated telephone line or a letter to the Whistle Blower Officer or
to the Chairman of the Audit Committee. The Policy on vigil mechanism
and whistle blower policy will be uploaded very soon on the Company's
website at the link: http://www.kmsugar.com. During the year under
review, no employee was denied access to Whistle Blower Officer or
Audit Committee.
Extract of annual return
Extract of Annual Return of the Company is annexed herewith in form no.
MGT-9 as Annexure 7 to this Report.
Internal financial controls
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weakness in the design or operation
were observed.
Risk management
The Company aims to have a formalised and systematic approach for
managing risks across the Company. It encourages knowledge and
experience sharing in order to increase transparency on the key risks
to the Company to the extent possible. This approach increases risk
awareness, and ensures proper management of risks as part of the daily
management activities.
During the year, the Company has constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in:
- Reviewing and approving the Company's Risk
Management Policy so that it is consistent with the Company's
objectives; and ? Ensuring that all the risks that the Company faces
such as strategic, operational, financial, compliance and other risks
are identified and assessed and there is an adequate risk management
infrastructure in place capable of addressing those risks. The Risk
Management Policy was reviewed and approved by the Committee. The
policy on Risk Management will be uploaded very soon on the Company' s
websi te at the link: http://www.kmsugar.com
The objective of the Company's risk management process is to support a
structured and consistent approach to identify, prioritize, manage,
monitor and report on the principal risks and uncertainties that can
impact its ability to achieve its strategic objectives. The Company
has introduced several initiatives for risk management including the
introduction of audit functions and processes to identify and create
awareness of risks, optimal risk mitigation and efficient management of
internal control and assurance activities.
Corporate social responsibility
The Company strongly believes in concept of sustainable development and
is committed to operate and grow its operations in a socially and
environmentally responsible way. Our vision is to expand our operations
whilst reducing the environmental impact of our operations and
increasing the positive social impact on our community. As per the
Companies Act, 2013, all companies with a net worth of Rs. 100 crore or
more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5
crore or more during any financial year are required to constitute a
Corporate Social Responsibility (CSR) committee of the Board of
Directors comprising of three or more directors, at least one of whom
should be an independent director and such company shall spend at least
2% of the average net profits of the company's immediately preceding
three financial years on CSR activities. The provision regarding CSR
were not applicable on the Company during the period under report.
The Company has duly constituted a Corporate Social Responsibility
(CSR) Committee pursuant to the requirement of Section 135(1) of
Companies Act, 2013 and the Rules made thereunder.
Conservation Of Energy, Technology Absorption and Foreign Exchange and
Outgo Information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo as required under
Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the
Companies (Accounts) Rules, 2014 is given in Annx-1.
Research and Development
The details relating to Research and Development activities carried out
by the company during the year are stated in annexure to this report.
Particulars of Employees
The disclosure as required under the provisions of Section 197 (12) of
the Companies Act, 2013, read with Rule 5(2) of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in
respect of the employees of the Company has been given in 'Annexure 2'
and forms part of this Report.
Corporate Governance
As stipulated in Clause 49 of the Listing Agreement, a separate section
on Corporate Governance forming part of the Directors' Report and
Management Discussion & Analysis Report and the certificate from
Practicing Company Secretary confirming the compliance of the
conditions on Corporate Governance are included in the Annual Report.
The Report on Corporate Governance is attached as Annexure-3 to this
report. A certificate from M/s. Amit Gupta & Associates, Company
Secretaries regarding compliance of conditions of Corporate Governance
as stipulated under 49 of the Listing Agreement is also annexed to this
report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report on the business and
operations of the company is attached to this report as 'Annexure-4'.
Industrial Relation
The industrial relations have been cordial at all plants of the Company
during the year.
Subsidiary Company
Your Company has a subsidiary a company viz. M/s. K.M. Energy Private
Limited, incorporated on 01-12- 2014 for setting up of Solar Power
Project. There was no operational activities during the period under
review. However, this company has loss Rs.6.77 lacs for the year ended
31-03-2015. Further, your Company had given a loan of Rs.285.00 lacs to
it at interest @10%. In terms of proviso to section 139(3) of the
Companies Act,2013, the salient features of the financial statements of
the subsidiary is set out in the prescribed form (AOC-1) under Rule-5
of the Companies (Accounts) Rules,2014 as Annex.5 The consolidated
financial statements presented by the Company include financial
information of its subsidiary prepared in compliance with applicable
Accounting Standards.
The Company will make available the annual report of subsidiary Company
upon request by any shareholder of the Company interested in obtaining
the same. Pursuant to the provisions of section 136 of the Act, the
financial statements of the Company, consolidated financial statements
along with relevant documents and separate audited accounts in respect
of subsidiary, are available on the website of the Company.
Number of meetings of the Board
The Board met six times during the financial year, the details of which
are given in the Corporate Governance Report that forms part of this
Annual Report. The intervening gap between any two meetings was within
the period prescribed by the Companies Act, 2013 and the Listing
Agreement.
Policy on directors' appointment and remuneration
The Company seeks to maintain an appropriate mix of executive and
independent directors in order to maintain the independence of the
Board and segregate the functions of governance and management. As at
year end, the Board consists of 10 members, four of whom are Whole-time
directors, five are Independent directors and one is a Nominee
director. The Company has five independent directors and all are
qualified personnel with requisite qualifications, experience, positive
attributes and satisfy all the criteria as set out under Schedule IV of
Companies Act, 2013. These appointees are only eligible for sitting
fees for attending Board meetings and Committee meetings and other out
of pocket expenses duly made for attending meetings of the Board or any
committee of the Board thereof. Remuneration proposed for whole time
directors is in accordance withj the Remuneration Policy approved by
Nomination and Remuneration Committee of the Board.
Your Company, in compliance with section 178(1) of the Companies Act,
2013 read with The Companies (Meeting of Board and its Powers) Rules,
2014, has duly constituted a Nomination and Remuneration Committee.
This committee is chaired by an independent director and formulates the
criteria for determining qualifications, positive attributes,
independence of a director and other matters. Appointment and the
remuneration of Board members, key managerial personnel or one level
below the Board level is fixed on the basis of the recommendation of
the Nomination and Remuneration Committee made to the Board, which may
ratify them, with or without modifications. Disclosures pursuant to
the requirements of section 197(12) read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 have been made in Annexure 2 of this Board Report.
Declaration by independent directors
As per the requirement of section 149(7), the Company has received a
declaration from every Independent Director that he or she meets the
criteria of independence as laid down under section 149(6) read with
rule 5 of the Companies (Appointment and Qualification of Directors)
Rule, 2014 and Clause 49 of the Listing Agreement.
Board evaluation
Pursuant to the requirement of the Companies Act, 2013, a formal annual
evaluation needs to be made by the Board of its own performance and
that of its committees and individual directors. The Act states that
the performance evaluation of the independent directors shall be done
by the entire Board of Directors, excluding the director being
evaluated. The evaluation of all the directors and the Board as a
whole was conducted based on the criteria and framework adopted by the
Board as explained under the Corporate Governance section of this
Annual Report. In a separate meeting of independent Directors,
performance of non-independent directors was evaluated.
Committees of the board
Currently, the Board has 4 nos of committees. A detailed note on the
Board and its committees is provided in the Corporate Governance Report
section of this Annual Report. The composition of the committees and
compliances, as per applicable provisions of the Act and Rules, are as
follows:
Particulars of Loans, Guarantee or Investments
As per the requirement of section 186(4) of Companies Act, 2013,
particulars of loans given, investments made, guarantees given or
securities provided along with the purpose for which the loan or
guarantee or security is proposed to be utilized by the recipient are
provided in the standalone financial statements. The Company is in
compliance with the limits as prescribed under Section 186 of Companies
Act, 2013 read with rule 11 of the Companies (Meeting of Board and its
Powers) Rules, 2014.
Particulars of contracts or arrangements with Related Party
The Company's policy on related party transactions may be accessed on
the Company's website at http://www.kmsugar.com.. Particulars of
contracts or arrangements with Related Parties referred in Section
188(1) of the Companies Act, 2013 is furnished in accordance with Rule
8(2) of the Companies (Accounts) Rules, 2014 is given Not to Accounts
no.2.29-(12-D) also in Form AOC-2 as Annexure-6.
Material changes and commitments affecting financial position between
the end of the financial year and date of report
No material changes and commitments have occurred after the close of
the year till the date of this Report, which affect the financial
position of the Company.
Acknowledgement
Yours Directors place on record their acknowledgement and sincere
appreciation of all the bankers and financial institutions for their
continued assistance. They further appreciate and acknowledge with
gratitude the co-operation and assistance received from all executives,
staff and workmen of the Company.
For and on behalf of the Board
of K. M. Sugar Mills Ltd.
Sd/-
L K. Jhunjhunwala
Chairman
Date : 11.08.2015
Place: Lucknow
Sep 30, 2013
The Directors have pleasure in placing the 41st Director''s Report
along with the Audited Statement of Accounts for the financial year
ended on 30th September, 2013.
Financial Performance
The Financial performance of the Company during the year 2012-13 as
under: (Rupees in Lacs)
2012- 2011-
2013 2012
Profit before interest, depreciation &
tax 3504 1862
Less: Interest (1324) (1390)
Depreciation (901) (1034)
Profit before tax 1279 (562)
Provision for taxation (including FBT)
Provision for taxation (deferred) (19) (62)
Net Profit before extraordinary Items 1260 (624)
Add: Extra ordinary item (0) (0)
Net Profit 1260 (624)
Earning Per Share of Rs 2/ - each 1.37 0.68
Overall Performance
For the year ended on 30th September, 2013 sales stood at Rs. 27258.79
Lacs (net of excise duty) against the Rs. 25456.41 (net of excise duty)
of last year. During the financial year under review, the company had
done trading of sugar for Rs. Nil lacs whereas during the preceding
financial yeartrading activity was done for Rs. 1330.34 lacs). Profit
after interest and depreciation stood at Rs. 1279 Lacs as against the
loss of Rs. 562. Lacs in preceding year. Profit after tax for the year
ended September 30, 2013 was Rs.1260 Lacs compared to loss of Rs. 624
Lacs in the preceding year.
Dividend
Due to accumulated losses your directors have not recommended any
dividend for the financial year ended September30,2013.
Performance of Divisions:- Sugar Division Crushing season 2012-2013 was
comparatively a long Season for the Company. The company has crushed
91.57 Lacs qtls. of cane and the season ran for 142 days. The other
details are as under:
Co-Generation:
During the crushing season reported the company produced 8,06,32,125
KWH power and exported 5,78,05,627 KWH to UPPCL.
Distillery
The year 2012-2013 Company Produced 85.96 Lacs BL of Rectified Spirit
with recovery of 20.41% which is much better in comparison of preceding
year production of 71.51 Lacs BL. , but recovery has decreased by 0.63%
from preceding Financial Year 2011-2012.
In current year 2013-14, the Company expects better margins due to
increase in alcohol price in the market.
Reference to BIFR Under Section 15 and Other Applicable provisions of
the Chapter III of the Sick Industrial Companies ( Special Provisos )
Act , 1985
It was reported in the last report that the Net worth of the Company
was completely eroded during the financial year 2011-12 and accordingly
a reference was registered with the Board for Industrial and Financial
Reconstruction (BIFR) as required by the provisions of the Sick
Industrial Companies ( Special Provisions) Act, 1985 on 28-02-2013.
Auditors
M/s. Mehrotra & Mehrotra, Chartered Accountants, New Delhi, Auditors of
the Company retires at the conclusion of the forthcoming Annual General
Meeting and being eligible, offer themselves for reappointment. They
have furnished a certificate to the effect that their proposed
reappointment, if made, will be in accordance within the limits
specified u/s 224 (IB) of the Companies Act, 1956. Auditors'' Report
The comments on the statement of account referred to in the report of
the auditors are self-explanatory, and explained in the appropriate
notes to the accounts. Cost Auditors
The Central Government approved the appointment of M/s. Aman Malviya &
Company, Cost Auditor, Lucknow as Cost Auditors for conducting Cost
Audit for Sugar and Industrial Alcohol businesses for the
financialyear2013-14. Directors
Mr. P. N .Mathur was appointed as the Nominee Director in the meeting
of the Board of Directors of the Company held on 10-08-2013, pursuant
to Clause 41of Annexurel of CDR and letter of approval dated
27-03-2012. Mr. P.N. Mathur is Circle Head, Punjab National Bank,
Lucknow Circle and has a vast experience in Banking services. His
guidance and suggestions will be in the interest of the Company. The
Board recommended his appointment as Director, subject to confirmation
by the Shareholders in the General Meeting.
At the ensuing Annual General Meeting Shri Sanjay Jhunjhunwala and Shri
Subhash Chandra Agarwal Directors of your Company, retire by rotation
u/s 256 of the Companies Act, 1956 and are being eligible, offer
themselves for re-appointment at the ensuing Annual General Meeting.
Public Deposits
During the year 2012-2013 the company has not accepted any public
deposits.
Listing Agreement
The equity shares of the company are listed with the Bombay Stock
Exchange Limited and National Stock
Exchange Limited.
Directors''Responsibility Statement
In pursuance of sub-section (2AA) of Section 217 of the Companies Act,
1956, in respect of Directors'' Responsibility Statement, the Board of
Directors confirms:
(i) that in the preparation of the annual accounts for the year ended
on September 30, 2013 the applicable accounting standard have been
followed by the Company.
(ii) that the directors of the company have selected such accounting
policies, applied them consistently, made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year and of
the profit of the Company for the year ended on that date.
(iii) that the directors of the Company have taken proper and
sufficient care for the maintenance of adequate accounting in
accordance with provisions of the Companies Act, 1956, for safeguarding
the assets of the company and for detecting fraud and other
irregularities; and
(iv) that the directors of the Company have prepared the annual
accounts on a going concern basis. Conservation of Energy, Technology
Absorption and Foreign Exchange and Outgo
The particulars required under Section 217(l)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors), Rules, 1988 are given in ''Annexure 1'' and
forms part of this Report.
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended are given in ''Annexure 2'' and forms part of this
Report.
Corporate Governance
The Directors'' Report on Corporate Governance is attached as Annexure-3
to this report. A certificate from M/s. Amit Gupta & Associates,
Company Secretaries regarding compliance of conditions of Corporate
Governance as stipulated under 49 of the Listing Agreement is also
annexed to this report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report on the business and
operations of the company is attached to this report as ''Annexure-4''.
Research and Development
The details relating to Research and Development activities carried out
by the company during the year are stated in Form B of the this report
as required under the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988.
Industrial Relation
The industrial relations have been cordial at all plants of the Company
during the year.
Acknowledgements
Yours Directors place on record their acknowledgment and sincere
appreciation of all the bankers and financial institutions for their
continued assistance.
They further appreciate and acknowledge with gratitude the co-operation
and assistance received from all executives, staff and workmen of the
Company.
For and on behalf of the Board
of K. M. Sugar Mills Ltd.
Sd/-
Date: 08.02.2014 L K.Jhunjhunwala
Place: Lucknaw Chairman
Sep 30, 2012
To, The Members,
The Directors have pleasure in placing the director''s report along
with the Audited Statement of Accounts for the financial year ended on
30th September, 2012.
Financial Performance
The Financial performance of the Company during the year 2011-2012 as
under:
(Rupees in Lacs)
2011- 2010-
2012 2011
Profit before interest, depreciation & tax 1862 1571
Less: Interest (1390) (1420)
Depreciation (1034) (1229)
Profit before tax (562) (1078)
Provision for taxation (including FBT)
Provision for taxation (deferred) (62) (47)
Net Profit (624) (1125)
Earning Per Share of Rs 2/- each (0.68) (1.22)
Overall Performance
For the year ended on 30th September, 2012 sales stood at Rs. 25471.35
Lacs (net of excise duty) against the Rs. 28707.11 (net of excise duty)
of last year. During the last financial year the company had done
trading of sugar for Rs. 6837.87 lacs whereas during the reported
financial year trading activity was done for Rs. 8206.96 lacs). Loss
after interest and depreciation stood at Rs. 562 Lacs against the loss
of Rs. 1078 Lacs in last year. Loss after tax for the year ended
September 30, 2012 was Rs. 624 Lacs compared to loss of Rs. 1125 Lacs
of the previous year.
Dividend
Rue to accumulated losses your directors have not declared any dividend
for the financial year ended September 30,2012
Performance of Divisions
Sugar Division
Crushing seasbn 2011-2012 was long Season for the Company. The company
has crushed 68.41 Lacs qtl. and the season runs for 116 days. The
other details are asunder:
Season Season
2011-2012 2010-2011
Gross Working days 116 104
Total Cane Crushed (qtls.) 6841970.96 5485290.31
White sugar Produced (qtls) 653710 517375
Average Recovery 9.57% 9.45%
Cane Management
Cane management is the most indispensable part of the whole sugar
manufacturing process. It is said "Sugar is produced in the field and
extracted in the factory ''''This makes the Cane management as most
important part of the Sugar Industry. The Uttar Pradesh Government
through an order dated 08.11.2012 , raised the State Advised Cane Price
( SAP ) for the early maturing varieties from Rs. 205/- per quintals
for the Sugar Season 2010-2011 to Rs. 240/- per quintal forthe Sugar
Season 2011-2012 and that for the early maturing varieties from Rs
210/- per quintals to Rs. 250/- per quintal. For the rejected
varieties, the SAP was raised from Rs. 200/- perquintalto Rs. 235/-
perquintal. Sugar Mills in UP pay SAP for sugar cane which historically
is significantly higher than the FRP fixed by the Central Government.
Co-Generation:
During the crushing season reported the company produced only 56949160
MWh power and exported 40005496 MWh to UPPCL.
Distillery
During the year 2011-2012 Company Produced 71.510 Lacs BL of Rectified
Spirit with recovery of 21.04%, which is much better in Comparison of
last year production of 53.98 Lacs BL. and has improved the recovery by
0.44% from last Financial Year 2010-2011
Reference to BIFR Under Section 15 and other Applicable provisions of
the Chapter III of the Sick Industrial Companies (Special Provisions)
Act , 1985
The Net worth of the Company has fully eroded. Accordingly the
Directors have filed a reference with the Board for Industrial and
Financial Reconstruction (BIFR) as required by the provisions of the
Sick Industrial Companies (Special Provisions) Act, 1985
Auditors
M/s. Mehrotra & Mehrotra, Chartered Accountants, New Delhi, Auditors of
the Company retires at the conclusion of the forthcoming Annual General
Meeting and being eligible, offer themselves for reappointment. They
have furnished a certificate to the effect that their proposed
reappointment, if made, will be in accordance within the limits
specified u/s 224 (IB) of the Companies Act, 1956.
Auditors'' Report
The comments on the statement of account referred to in the report of
the auditors are self-explanatory, and explained in the appropriate
notes to the accounts.
Directors
At the Annual General Meeting Shri H P
Singhania and Shri S K Gupta both are independent f2f$|jS@ors of your
Company are due to retire by lifSlation u/s 256 of the Companies Act,
1956. They are eligible for re-appointment and offer themselves for the
same
Public Deposits
During the year 2011-2012 the company has not accepted any public
deposits.
Listing Agreement
The equity shares of the company are listed with the Bombay Stock
Exchange Limited and National Stock Exchange Limited.
Directors'' Responsibility Statement
In pursuance of sub-section (2AA) of Section 217 of the Companies Act,
1956, in respect of Directors'' Responsibility Statement, the Board of
Directors confirms:
(i) that in the preparation of the annual accounts for the year ended
on September 30, 2012 the applicable accounting standard have been
followed by the Company.
(ii) that the directors of the company have selected such accounting
policies, applied them consistently, made judgments estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year ended on that date.
(iii) that the directors of the Company have taken proper and
sufficient care for the maintenance of adequate accounting in
accordance with provisions of the Companies Act, 1956, for safeguarding
the assets of the company and for detecting fraud and other
irregularities; and
(iv) that the directors of the Company have prepared the annual
accounts on a going concern basis.
Conservation Of Energy, Technology Absorption and Foreign Exchange and
Outgo
The particulars required under Section 217(l)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors), Rules, 1988 are given in ''Annexure 1'' and
forms this Report.
Particulars of Employees ;
Particulars of employees as required "|Ser 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended are given in ''Annexure 2'' and forms part of this Report.
Corporate Governance
A certificate from M/s. Amit Gupta & Associates, Company Secretaries,
regarding compliance of conditions of Corporate Governance as
stipulated under clause 49 of the Listing Agreement along with the
report on Corporate Governance is attached to this report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report on the business and
operations of the company is attached to this report.
Research and Development
The details relating to Research and Development activities carried out
by the company during the year are stated in Form B of the this report
as required under the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988.
Industrial Relation
The industrial relations have been cordial at all plants of the Company
during the year.
Acknowledgments
Yours Directors place on record their acknowledgment and sincere
appreciation of all the bankers and financial institutions for their
continued assistance. They further appreciate and acknowledge with
gratitude the co-operation and assistance received from all executives,
staff and workmen of the Company.
For and on behalf of the Board
K. M. Sugar Mills Ltd.
Sd/-
Date: 11.02.2013 L.K. Jhunjhunwala
Place: Lucknow Chairman
Sep 30, 2010
The Directors have pleasure in placing the directors report along
with the Audited Statement of Accounts for the financial year ended on
30th September, 2010.
Financial Performance
The Financial performance of the company during the year 2009-10 is as
under:
2009-10 2008-09
Profit before interest, depreciation & tax 172 3203
Less: Interest (1284) (1196)
Depreciation (1359) (1581)
Profit before tax (2471) 426
Provision for taxation (including FBT) (2)
Provision for taxation (deferred) (643) (36)
Net Profit before extraordinary Items (1828) 460
Add: Extra ordinary item (1) (39)
Net Profit (1829) 421
Add: Balance brought forward from Previous year (2548) (2967)
Transfer to Molasses Reserve Fund (3) (2)
Amount available for Appropriation (4380) (2548)
Transfer to general reserve NIL NIL
Balance carried to Balance Sheet (4680) (2548)
Overall Performance
For the year ended on 30th September, 2010 your company recorded sales
of Rs. 1782.45 lacs(net of excise duty) against the Rs. 1511.18 Lacs
(net of excise duty) of last year. During the last financial year the
company had done trading of sugar for Rs. 1760.98 Lacs whereas during
the reported financial year trading activity was done only for Rs.
749.79 Lacs . Loss after interest and depreciation stood at Rs.2471
lacs against the Profit of Rs. 426 Lacs in last year. Loss after tax
for the year ended September 30,2010 was Rs. 1829 Lacs compared to
profit of Rs. 421 iacs of the previous year.
Dividend
Your directors have not declared any dividend for the financial year
ended September 30,2010.
Performance of Divisions
Sugar Division
During crushing Season 2009-10, the company has crushed 5070800.71 qtl.
and the season ran for 93 days. The other details are as under:
Season 2009-10 Season 2008-09
Gross Working days 93 79
Total Cane Crushed (qtls.) 5070800.71 3274866.32
Average cane crushed
per day (qtls.) 54524.74 41514.01
Average Recovery 8.97%_8.92%
Cane Management
Sugar Cane is the primary raw material for this business and
constitutes the majority portion of the cost, therefore, the cane
management is one of the most essential part of the sugar manufacturing
process. The quality as well as price of sugar cane determines the
prospects of the company. For the season 2009-10 the State Government
of Uttar Pradesh announced State advised price of cane at Rs. 165 per
qtl., an approximately 18% increase over the last year price of Rs. 140
per Qtl. The Central Government provided a mechanism for Fair &
Remunerative Price for cane which stood at Rs. 129.85 per qtl. which
represented an increase of 60% against the earlier practice of fixing
Statutory Minimun of Rs. 81.18 per qtl. However, because of the
overall shdrtage of cane and the price hike of the sugar in domestic
market the sugar mill paid a higher price for cane. Moreover, to meet
the challenges of low sugar cane yield the company has started immense
drive for cane development in the area by distributing pesticides,
seeds, fertilizers etc. We are expecting good sugar cane during the
current season 2010-11.
Co-Generation:
Sugar is a power demanding business and the saving grace lies in the
Companys ability to generate power from sugar by- product bagasse. The
bagasse- based Co- generation units qualify as a Clean Development
Mechanism (CDM) project that helps the company to earn the carbon
credits. The company has an exportable surplus of 20 MW Co- generation
capacities.
Distillery The year2009-10
During the year the production of Alcohol increased by 25% in
comparison of last sugar season. But due to higher cane price vis-a-vis
higher Molasses price the cost of Production increased, however the
Alcohol price in Market did not pick up in proportion to Molasses
price, which increased the loss of the unit.
The Company expect better Alcohol Price in current season 2010-11 due
to blending of Etnanol restarted by Petroleum Companies. In the other
hand the company also expect better cane crushing during current
season, which will increase availability of captive Motasses as well as
molasses in market.
Auditors
M/s. Mehrotra & Mehrotra, Chartered Accountants, New Delhi, Auditors of
the Company retires at the conclusion of the forthcoming Annual General
Meeting and being eligible, offer themselves for reappointment. They
have furnished a certificate to the effect that their proposed
reappointment, if made, will be in accordance within the limits
specified u/s 224 (1B) of the Companies Act, 1956.
AuditorsReport
The comments on the statement of account referred to in the report of
the auditors are self-explanatory, and explained in the appropriate
notes to the accounts. Directors
At the ensuing Annual General Meeting Shri H.P. Singhania, Shri R. S.
Shukla, Shri S. K. Gupta, Dr. Kirti Singh and Shri S. C. Agrawal
Directors of your Company are retiring by rotation and being eligible
offer themselves for re-appointment.
Public Deposits
During the year 2009-10 the company has not accepted any public
deposits.
Listing Agreement
The equity shares of the company are listed with the Bombay Stock
Exchange Limited and National Stock Exchange Limited. The suspension
of trading from National Stock Exchange of India Ltd. has been revoked
during the year 2009-10. The company has completed all the compliances
relating to listing agreement.
Directors Responsibility Statement
In pursuance of sub-section (2AA) of Section 217 of the Companies Act,
1956, in respect of Directors Responsibility Statement, the Board of
Directors confirms:
(i) that in the preparation of the annual accounts for the year ended
on September 30, 2010 the applicable accounting standard have been
followed by the Company.
(ii) that the directors of the company have selected such accounting
policies, applied them consistently, made judgments estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company of the financial year and of the loss of the
Company at the end for the year ended on that date.
(iii) that the directors of the Company have taken proper and
sufficient care for the maintenance of adequate accounting in
accordance with provisions of the Companies Act, 1956, for safeguarding
the assets of the company and for detecting fraud and other
irregularities; and
(iv) that the directors of the Company have prepared the annual
accounts on a going concern basis.
Conservation Of Energy, Technology Absorption and Foreign Exchange and
Outgo
The particulars required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors), Rules, 1988 are given in Annexure 1 and
forms part of this Report.
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended are given in Annexure 2 and forms part of this
Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report on the business and
operations of the company is attached to this report asAnnexure-4.
Research and Development
The details relating to Research and Development activities carried out
by the company during the year are stated in Form B of this report as
required under the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988.
Industrial Relation
The industrial relations have been cordial at all plants of the Company
during the year.
Acknowledgements
Yours Directors place on record their acknowledgement and sincere
appreciation of all the bankers and financial institutions for their
continued assistance. They further appreciate and acknowledge with
gratitude the co-operation and assistance received from all executives,
staff and workmen of the Company.
For and on behalf of the Board of
K. M. Sugar Mills Ltd.
Sd/-
L. K. Jhunjhunwala
Chairman
Date: 14.02.2011
Place: Lucknow
Sep 30, 2009
The with the Audited Statement of Accounts for the financial year ended on
30th September, 2009. Financial Performance
After two consecutive financial years of losses your company has earned
net profit for the year Rs. 426,32 Lacs before tax. However that is not
sufficient to cover the accumulated losses of the last two financial
years. The details are as under:
(Rupees in Lacs)
2008-09 2007-08
Profit before interest, depreciation & tax 3203 1534
Less: Interest (1196) (1029)
Depreciation (1581) (1605)
Protif before tax 426 (1100)
æ Provision for taxation (including FBT) (2) (8)
Provision for taxation (deferred) 36 (111)
Net Profit before extraordinary Items 460 (1219)
Add: Extra ordinary item (39) 4
Net Profit 421 (1215)
Add Balace brought forward from
Previous year (2967) (1746)
Transfer to Molasses Reserve Fund (2) (6)
Amount available for Appropriation (2548) (2967)
transfer to general reserve NIL NIL
Balance carried to Balance Sheet (2548) (2967)
Overall Performance
For the year ended on 30th September, 2009 sales stood at Rs, 1511.18
Lacs (net of excise duty) against the Rs. 3133.80 (net of excise duty)
of last year. The fall in sales is due to absence of opportunity for
trading of sugar activities during the reported financial year. During
the last financial year the company had done trading of sugar for Rs.
2200.33 Lacs whereas during the reported financial year trading
activity was done only for Rs. 749.79 Lacs. Profit after interest and
depreciation stood at Rs. 426 Lacs against the loss of Rs. 1215 Lacs in
last year. Profit after tax for the year ended September 30, 2009 was
Rs. 421 Lacs compared to loss of Rs. 1219 lacs of the previous year.
Dividend
Due to accumulated losses your directors have not declared any dividend
for the financial year ended September 30,2009.
Performance of Divisions Sugar Division
Crushing season 2008-09 was one of the shortest seasons in the history
of the Company from the point of view of the cane availability. The
company has crushed only 32.74 Lacs qtl. and the season was ran only
for 79 days. The other details are
as under
Season 2008-09 Season 2007-08
Gross Working days 79 117
Total Cane Crushed (qtls.) 3274866.32 5446935.57
Average cane crushed per
day (qtls.) 4151 401 46556.52
Average Recovery 8.92% 9.50%
Cane Management
Cane management is the most indispensable part of the whole sugar
manufacturing process, The quality as well as price of sugar cane
determines the prospects of the company. For the season 2008-09 State
Advisory Price was higher at Rs. 140 in comparison of last season.
Whereas the ground realities was much different and to achieve the
optimum level of cane crushing your company paid incentive. In spite-
of that the company crushed merely 32.74 lacs qtl towards the end of
the season, for which there were several reasons like untimely rains,
shifting of farmers from cane crop to other crops and which reduced
cane yield during the season 2008-09. Moreover, to meet the challenges
of low sugar cane yield the company has started immense drive for cane
development in the area by distributing pesticides, seeds, fertilizers
etc. The results are overwhelming and we are expecting good sugar cane
during the current season 2009-10.
Co-Generation;
Low cane crushing has also affected the power production during the
crushing season 2008-09, The bagasse generated by the lower crushing
was not enough to run the Co-Gen plant once the crushing was stopped.
During the crushing season reported the capacity utilization was merely
46,58% as the company produced only 22079 MWh power and exported 19588
MWh to UPPCL.
Distillery
The year 2008-09 was not good for the distillery also. As the lower
cane crushing not only affected the sugar division but all related
activities. The distillery division was also no exception. Its
performance was badly affected as the captive molasses was not
available in required quantities. The price of molasses was also high
leading to higher cost of production as the molasses price in open
market peaked up to Rs. 500 per qtl.
Auditors
M/s. Mehrotra & Mehrotra, Chartered Accountants, New Delhi, Auditors of
the Company retires at the conclusion of the forthcoming Annual General
Meeting and being eligible, offer themselves for reappointment, They
have furnished a certificate to the effect that their proposed
reappointment, if made, will be in accordance within the limits
specified u/s 224 (16) of the Companies Act, 1956.
Auditors Report
The comments on the statement of account referred to in the report of
the auditors are self-explanatory, and explained in the appropriate
notes to the accounts.
Directors
At the ensuing Annual General Meeting Dr. Kirti Singh and Shri R,
S.Shukla both are independent Directors of your Company are due to
retire by rotation u/s 256 of the Companies Act, 1956. They- are
eligible for re-appointment and offer themselves for the same Public
Deposits During the year 2008-09 the company has not accepted any
public deposits.
Listing Agreement
The equity shares of the company are listed with the Bombay Stock
Exchange Limited and National Stock Exchange Limited, However, the
National Stock Exchange Limited has suspended the trading on the basis
of some non compliance of the Listing agreement. Although the company
has completed all the compliances but the resumption of trading is
awaited,
Directors Responsibility Statement
In pursuance of sub-section (2AA) of Section 217 of the Companies Act,
1956, in respect of Directors Responsibility Statement, the Board of
Directors confirms:
(i) that in the preparation of the annual accounts for the year ended
on September 30,2009 the applicable accounting standard have been
followed by the Company.
(ii) that the directors of the company have selected such accounting
policies, applied them consistently, made judgments estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year ended on that date,
iii) that the directors of the Company have taken proper and sufficient
care for the maintenance of adequate accounting in accordance with
provisions of the Companies Act, 1956, for safeguarding the assets of
the company and for detecting fraud and other irregularities; an d
(iv) that the directors of the Company have prepared the annual
accounts on a going concern basis, Conservation Of Energy, Technology
Absorption and Foreign Exchange and Outgo
The particulars required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors), Rules, 1988 are given in Annexure 1 and
forms part of this Report.
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended are given in Annexure 2 and forms part of this
Report.
Corporate Governance
A separate section on Corporate Governance" including a certificate
from the Auditors of the Company regarding the confirmation of the
compliance of conditions of the Corporate Governance as stipulated
under clause 49 of the Listing Agreement with Stock Exchanges is given
in Annexure -3 and forms part of this report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report on the business and
operations of the company is attached to this report asAnnexure-4.
Research and Development
The details relating to Research and Development activities carried out
by the company during the year are stated in Form B of the this report
as required under the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988.
Industrial Relation
The industrial relations have been cordial at all plants of the Company
during the year.
Acknowledgments
Your Directors place on record their acknowledgment and sincere
appreciation of all the bankers and financial institutions for their
continued assistance. They further appreciate and acknowledge with
gratitude the co-operation and assistance received from alt executives,
staff and workmen of the Company.
For and on behalf of the Board
of K.M. Sugar Mills Ltd.
L. K.Jhunjhunwala
Chairman
Date: 29,01,2010
Place: Lucknow