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Directors Report of Ugar Sugar Works Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 75th Annual Report together with the Audited Financial Statements for the period ended 31st March, 2015.

GENERAL:

All India Production of Sugar for the Season 2014-15 is expected to reach 280 Lakh tonnes, as compared to the previous year's production of 243 Lakh tonnes. The Government of India, has continued with the decontrol mechanism.

Our total sugar cane crushing at Ugar and Jewargi during the season 2014-15 was 20.07 Lakh MT, bagging 23.13 Lakh Qtls of sugar and recovery 11.61% and 10.62 % respectively.

FINANCIAL RESULTS:

The brief financial results of the Company are as shown below:

31.03.2015 31.03.2014 Particulars Rs. in Lakh Rs. in Lakh



Profit before Depreciation & 960.03 (194.85) Amortisation

Depreciation & Amortisation 1,546.39 (2,560.60)

Profit Before Tax / (Loss) & Exceptional (586.36) (2,755.45) items

Exceptional items — —

Provision for Tax, (including deferred tax adjustment, short provision for tax) / MAT Credit entitlement(261.31) 220.42

Profit after Tax / Net Profit / (Loss) (325.05) (2,975.87) previous year

Balance of profit brought forward from (2,712.14) 263.73

Profit available for appropriation (3,037.19) (2,712.14)

Balance Carried in Profit and Loss (3,037.19) (2,712.14) Account

Earnings Per Share (EPS) (0.29) (2.65)

Explanation for Loss - During the year the Company has shown an operating loss of Rs. 586.36 i.e Loss Before Tax. As compared to previous year, the loss has come down. The Loss is due to the falling sugar prices and low realisation of sugar than the cost of production.

DIVIDEND:

Your directors have not recommended any dividend for the current financial year 2014-15.

OPERATIONS:

SUGAR AT UGAR: Sugar Season Sugar Season Particulars 2014-15 2013-14

Date of beginning of crushing season 30-11-2014 01-12-2013

Date of ending of crushing season 22-04-2015 06-04-2014

Number of Working Days 144 127

Sugar Cane Crushed (Lakh MT) 15.76 13.20

Recovery 11.61% 11.53%

Sugar Produced (Lakh Qtls.) 18.52 15.31

SUGAR AT JEWARGI :



Sugar Season Sugar Season Particulars 2014-15 2013-14

Date of beginning of crushing season 30-11-2014 27-11-2013

Date of ending of crushing season 23-04-2015 11-04-2014

Number of Working Days 145 136

Sugar Cane Crushed (Lakh MT) 4.31 4.05

Recovery 10.62% 10.45%

Sugar Produced (Lakh Qtls.) 4.61 4.25

DISTILLERY, IML PRODUCTION & ELECTRICITY GENERATION :

Financial Year Financial Year Particulars Unit 2014-15 2013-14

Rectified Spirit Produced (Lakh BL) Ugar 129.62 84.44

Denatured Spirit Produced (Lakh BL) Ugar 37.13 15.45

Potable Alcohol Produced (Lakh BL) Ugar 94.51 94.97

Electricity Generated (Lakh KW) Ugar 1071.58 923.98

Electricity Exported (Lakh KW ) Ugar 598.76 461.30

Electricity Generated (Lakh KW ) Jewargi 374.55 349.90

Electricity Exported (Lakh KW ) Jewargi 248.66 210.58

Your Directors expect to procure about 22 Lakh MT sugarcane at Ugar and Jewargi Units during 2015-16 crushing season.

ENVIRONMENTAL SAFETY:

Our Company continues to pursue its environmental friendly approach towards Industrial growth. Constant improvements are being made in the process and equipments, to minimize the discharge of effluents and emissions.

FIXED DEPOSITS:

The Company has repaid the Fixed Deposits of Rs. 2,815.93 Lakh during the year 2014-2015 to comply with the provisions of Section 74 of the Companies Act 2013. The number of Depositors, who have not claimed their deposits after maturity as on 31st March, 2015 were 3 (Three) and the amount outstanding as on that date, was Rs.3.18 Lakh. These amounts are lying with the company as there are litigation amongst the heirs about the true ownership of the deposits. As and when court order is received, amounts will be paid.

The Company has not accepted fresh deposits from public pursuant to Section 73 or 76 of the Companies Act, 2013 read with The Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Company has not advanced any loans pursuant to Section 186 of the Companies Act, 2013. The Guarantees given are given to the financial institutions (i.e. Rs. 40 Cr. to Bank of India and Rs. 25 Cr. to ICICI Bank Ltd.). And Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements at Note No A-11.

DIRECTORS & KMP:

During the year under review following changes have taken place in the composition of the Board of Directors of the Company:

* Shri. R. V. Shirgaokar, Chairman and Mentor of the Company has resigned as Chairman and Mentor as well as member of the board w.e.f. 31st March, 2015. The board places on record appreciation of services rendered and valuable guidance given by Shri R.V. Shirgaokar during his tenure as a Chairman and Mentor of the company. He is now designated as Chairman Emeritus.

* Shri. P. V. Shirgaokar, age 76 years, was appointed on the Board on 05.08.1994. He retired as Executive Vice Chairman on 31st March, 2015 and thereafter he was appointed as Chairman of the Company w.e.f. 01st April, 2015. He is liable to retire by rotation & being eligible offers himself for reappointment.

* Mrs. Shilpa Kumar, a Women Director, has been appointed as an additional Director on the Board on 31st March, 2015. A notice is received from a member proposing her candidature for appointment as Director liable to retire by rotation.

* Shri. Deepak Ghaisas, an Independent Director was appointed by the Company on 23rd May, 2014.

* Shri. A. B. Kage resigned as a Director due to health problems on 20th May, 2015.

* Shri. Shishir S. Shirgaokar is appointed as a Executive Vice Chairman, Shri. Niraj S. Shirgaokar and Shri. Chandan S. Shirgaokar has been appointed as Managing Director w.e.f. 01st April, 2015.

* Shri. Shishir S. Shirgaokar, Managing Director, Shri. R V Desurkar GM Finance & CFO and Shri. B G Kulkarni GM Corp. Affairs & CS, were designated as KMP during the year.

Directors Retire by Rotation:

* Shri. V. Balasubramanian, (Retd. IAS), age 74 years, is on the Board of the Company as an Independent Director since 1997. He retires at this meeting and is eligible for re-appointment as an Independent Director for a period upto 2019.

Dr. M. R. Desai age 68 years is a qualified doctor, is on the Board as an Independent Director since 2000. He retires at this meeting and is eligible for re-appointment as an Independent Director for a period upto 2019.

* All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The details of appointment of Independent Directors are disclosed on Companies website with following link.

http://web.ugarsugar.com/ investor Relations/Corporate Announcements.asp child=3&parent=7

* Board Evaluation :-

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of Audit, Nomination & Remuneration Committees.

* Nomination & Remuneration Policy:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration and includes other matter as prescribed under the provisions of Section 178 of Companies Act and Clause-49 of the Listing Agreement. The Nomination & Remuneration Policy is available on the website of the Company on the following link.

http://web.ugarsugar.com/Investor Relations/Corporate Announcements.aspchild=3&parent=7

* Meetings:

During the year, Five Board Meetings and Five Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap 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 confirm that-

i] That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures,

ii] The directors had selected such accounting policies and applied them consistently and made judgment 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 and loss of the Company for that period,

iii] The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively, and

vi] The director had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE:

Our Company has been following good Corporate Governance since its inception. The shares of our Company are listed on Bombay Stock Exchange Ltd., and National Stock Exchange of India Ltd., We are regularly and timely complying with the requirements as per the Listing Agreement. Company has paid the Annual Listing Fees for the Financial Year 2015-16. As required by SEBI Guidelines, a Corporate Governance Report is annexed.

CO-GENERATION AT UGAR & JEWARGI:

During this year electricity generated was 1,446.13 Lakh KW of which we have exported 847.42 Lakh KW through Tata Power Trading Company by consuming 5.10 Lakh MT of Bagasse. During the Financial Year 2014-15, the electricity export rates received till March, 2015 were Rs. 4.93 per unit at Ugar and Jewargi as against Rs.5.08 per unit received during previous year.

DISTILLERY:

The production of Rectified Spirit was 129.62 Lakh BL as compared to 84.44 Lakh BL during the previous year. During the year under review, the supply of ethanol has restarted and we have supplied 37.13 Lakh BL to the Oil Companies. The production at distillery has gone up by 45.18 lakh bulk litres during the year.

INDIAN MADE LIQUOR (IML) AT UGAR:

The Company has manufactured 10.73 Lakh cases at Ugar during this year as against 10.84 Lakh cases during the previous year. The sales have slightly come down. Company has continued bottling its products at M/s. K. S. Distilleries M/s. SDF Industries and M/s. Polsons Distilleries.

DEMATERIALIZATION OF SHARES:

Our Company has provided connectivity with NSDL & CDSL for dematerialization of its shares for trading in electronic form under ISIN-No.INE071E01023. So far 89546232 eq. shares have been dematerialised by the shareholders, i.e.79.60% of total shareholding as on 31st March, 2015. The annual fees of depositories for the FY 2014-15 have been paid by the Company.

CONSERVATION OF ENERGY AND PARTICULARS OF EMPLOYEES:

Particulars pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo have been given under Annexure I. The disclosures as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule, 8 of The Companies (Accounts) Rules, 2014 has been given under Annexure II. Both the annexure form part of this report.

ASSOCIATE COMPANIES:

UGAR CONSULTANCY LTD.

Ugar Consultancy was incorporated on 10-11-1987, with an intention to provide consultancy services for power generation projects, including its implementation. The company was also providing services for erection of sugar manufacturing plants, electrical maintenance and ancillary services. Since the consultancy for power projects has reduced substantially, the company has stopped its activities and is under voluntary winding up process.

UGAR THEATRE PVT. LTD.

Ugar Theatre Pvt. Ltd was incorporated on 29-11-1977, with an intention to exhibit films for the Ugar people, with increased media facilities, the film exhibition has become un-remunerative, hence the activity of film exhibition was stopped w. e. f. 30th January, 2004 and the machinery was sold. The Company is presently engaged in providing warehousing facility to others.

UGAR QUALITY PACKAGING PVT. LTD.

Ugar Quality Packaging Pvt. Ltd was incorporated on 21-06-2006 as a 100% Export Oriented Unit (EOU) to cater the entire printing/packaging needs of Ugar's Sugar Ship EOU project. This plant was set up at Ratnagiri, Maharashtra and commercial production was started from October 2007. However, with the reduced orders from Sugar Ship Unit, the

Ugar Quality Packaging Pvt. Ltd. went in loss and the activities were stopped from April, 2013.

QUALIFYING REMARKS IN AUDITORS' REPORT:

There are no qualifying remarks in the Statutory Auditors Report and Secretarial Audit Report.

AUDITORS:

Statutory Auditors

The Company's Auditors, M/s. P. G. Bhagwat, Chartered Accountants, having FRN - 101118W retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

You are requested to appoint auditors for the ensuing year and to authorise the Board to fix their remuneration.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its the Cost Audit of Sugar and Electrical Energy. Your Directors have appointed Shri. V. V. Deodhar, Cost Auditor, Mumbai (Membership No. 3813) on the recommendation of the Audit Committee, to audit the cost accounts of the Company for the financial year 2015-16 on a remuneration of Rs. 1.70 Lakh, subject to the ratification of General Body.

You are requested to ratify the remuneration payable to him.

Secretarial Audit

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 has appointed CS Abhay Gulavani, Company Secretary in Practice, Miraj (Membership No A28983) to undertake the Secretarial Audit of the Company who had consented to the same. The Report of the Secretarial Auditor is annexed herewith as "Annexure III". Management response for the observations stated in the report are as below-

1) NSE Fine - Due care will be taken to avoid the delays in future.

2) Issue relating to Cane Price - Company has filed the petition int High Court, of Karnataka through its association.

CORPORATE SOCIAL RESPONSIBILITY

In view of the loss during previous years and expected loss during this year, the company has not spent any specific amount towards corporate social responsibility. The Report of the CSR is annexed herewith as "Annexure IV".

INTERNAL FINANCIAL CONTROL:

The Company has adequate Internal Financial Controls with proper checks and balances to ensure that transactions are properly authorized, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. The transactions entered into by the Company during the year were within the limits of the Powers of the Board as prescribed in Section 188 read with Companies (Meetings of Board & its Powers) Rules, 2014. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel, other designated persons or other related parties which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions were placed before the Audit Committee and the Board for their approval.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

Form No. AOC-2: (Pursuant to clause (h) of sub-section (3) of section 134 of the Act 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 annexed herewith as "Annexure VI".

DETAILS OF REMUNERATION AS REQUIRED UNDER SECTION 197 (12):

Details of Remuneration as required under Section 197 (12) of the Companies Act, 2013 Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as "Annexure VII."

WHISTLE BLOWER POLICY / VIGIL MECHANISM:

Pursuant to the provisions of Section 177 of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Company has adopted a Whistle Blower Policy / Vigil Mechanism that encourages and supports its Directors & employees to report instances of unethical behaviour, actual or suspected frauds or violation of Company's Code of Conduct. It also provides adequate safeguards against victimisation of persons who use this mechanism and direct access to the Chairman of Audit Committee in exceptional cases. The Whistle Blower Policy / Vigil Mechanism policy has been posted on web site of company on the link http://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 sexual harrassment of women at work place and an internal complaints committee has been constituted. No complaints are received during the year.

ACKNOWLEDGMENT:

Your Directors wish to place on record their sincere appreciation for the continued support received from Managements of Central Bank of India, Bank of Baroda, Union Bank of India and Bank of India for providing working capital finance and Central Bank of India, Bank of Baroda, Sugar Development Fund, for providing long term finance for capital Investments, Tata Power Trading Co. Ltd., and HESCOM, for transmission of energy.

Your Directors thank the Government of India, Government of Karnataka, Government of Maharashtra, Government Authorities, Shareholders, Cane suppliers, Workers and Staff for their co-operation and contribution to the overall progress of the Company.

By order of the Board of Directors For The Ugar Sugar Works Limited

Place: Pune P. V. Shirgaokar Chairman Date: 29-05-2015 DIN - 00151114


Mar 31, 2014

DEAR SHAREHOLDERS,

The Directors have pleasure in presenting their 74th Annual Report together with the Audited Financial Statements for the period ended 31st March, 2014.

GENERAL:

All India Production of Sugar for the Season 2013-14 is expected to reach 243 lakh tonnes, as compared to the previous year''s production of 245 lakh tonnes. The Government of India, has continued with the decontrol mechanism. The levy obligation has been removed and the Release Mechanism has been done away.

Our total crushing at Ugar and Jewargi, during the season 2013-14 was 17.25 Lakh MT of sugar cane, bagging 19.56. Lakh Qtls. of sugar, with a recovery of 11.53% and 10.45% respectively.

FINANCIAL RESULTS:

The financial results of the Company are as shown below:

Particulars 31.03.2014 31.03.2013 Rs. in Lakh Rs. in Lakh

Profit before Depreciation & Amortisation (194.85) 4,412.51

Depreciation & Amortisation (2,560.60) (2,469.94)

Profit Before Tax & Exceptional items (2,755.45) 1,942.57

Exceptional items --- ---

Provision for Tax, (including deferred tax adjustment, short provision for tax) / MAT Credit entitlement 220.42 197.56

Profit after Tax / Net Profit (2,975.87) 1,745.01

Balance of profit brought forward from previous year 263.73 205.22

Profit available for appropriation (2,712.14) 1,950.23

Appropriation to General Reserve 0 1,423.26

Proposed Dividend 0 225.00

Corporate Dividend Tax 0 38.24

Balance Carried in Profit and Loss Account (2,712.14) 263.73

Earning Per Share (EPS) (2.65) 1.55

Explanation for Loss - During the year the Company has shown a loss of Rs. 2,755.45. The Loss is due to the falling sugar prices and lower realisation of sugar than the cost of production.

DIVIDEND:

In view of the losses, your directors have not recommended any dividend for the current financial year 2013-14. (Previous Year dividend - @ 20%).

ENVIRONMENTAL SAFETY:

Our Company continues to pursue its environmental friendly approach towards Industrial growth. Constant improvements are being made in the process and equipments, to minimize the discharge of effluents and emissions.

FIXED DEPOSITS:

The number of Depositors, who have not claimed their deposits after maturity as on 31st March, 2014 was 12 and the amount outstanding as on that date was Rs. 10.28 Lakh.

COST AUDIT:

Our Company has received the approval of the Central Government for the appointment of Shri. V. V. Deodhar, Cost Auditor, Mumbai to conduct the Cost Audit of Sugar and Electrical Energy for the Financial Year 2013-14.

DIRECTORS:

Sarvashri. R. V. Shirgaokar (DIN No. 00542644) retires by rotation and being eligible offers himself for re-appointment.

During the year Shri. Sanat K. Shirgaokar (DIN No. 00208235) Director of the Company passed away on 13th October, 2013. The Board mourns the sad demise of Shri. Sanat K. Shirgaokar and places on record the contribution made by him during his tenure. To fill the casual vacancy caused by his death, Shri. Sachin R. Shirgaokar (DIN No. 01512497) was appointed by the Board in their meeting held on 29th January , 2014. Shri. Sachin R. Shirgaokar (DIN No. 01512497) retires at this meeting and being eligible offers himself for reappointment.

Shri. Sohan S. Shirgaokar (DIN No. 00217631) was appointed by the Board as an Additional Director in their meeting held on 29th January, 2014, liable to retire at this meeting and being eligible offers himself for reappointment.

Shri. Rakesh Kapoor (DIN No. 00015358) was appointed by the Board as an Additional Director in their meeting held on 29thJanuary, 2014, liable to retire at this meeting and being eligible offers himself for reappointment.

Shri. A. B. Kage (DIN No. 00323526) Director of the Company resigned due to health problems. The Board places on record the appreciation of the services rendered by him during his long tenure as a member of the Board. To fill the casual vacancy caused by his resignation Shri. Deepak Ghaisas (DIN No. 00001811) was appointed by the Board in their meeting held on 23rd May, 2014. Shri. Deepak Ghaisas (DIN No. 00001811) retires at this meeting and being eligible offers himself for reappointment.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of section 217(2AA) of the Companies Act, 1956, we confirm:

i] That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii] That the directors have selected such accounting policies and applied them consistently and made judgment 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 or loss of the Company for that period.

iii] That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv] That the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

Our Company has been following good Corporate Governance since its inception. The shares of our Company are listed on Bombay Stock Exchange Ltd., and National Stock Exchange of India Ltd., We are regularly and timely complying with the requirements as per the Listing Agreement. As required by SEBI Guidelines, a Corporate Governance Report is annexed.

CO-GENERATION AT UGAR & JEWARGI:

During this year electricity generated was 1,273.89 Lakh KW of which we have exported 671.88 Lakh KW through Tata Power Trading Company by consuming 4.79 Lakh MT of Bagasse. During the Financial Year 2013-14, the electricity export rates received till March, 2014 were quite reasonable and the average rate realised during this year was Rs. 5.08 per unit at Ugar and Jewargi.

DISTILLERY:

The production of Rectified Spirit was 84.44 Lakh BL as compared to 88.48 Lakh BL during the previous year. During the year under review, the production of ethanol restarted and we have supplied 15.45 Lakh BL to the Oil Companies. The production during the year has not improved much as the distillery was closed during the off season.

INDIAN MADE LIQUOR (IML) AT UGAR:

The Company has manufactured 10.84 Lakh cases at Ugar during this year as against 10.94 Lakh cases during the previous year. Company has continued bottling 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 its shares for trading in electronic form under ISIN-No.INE071E01023. So far 8,85,91,189 eq. shares have been dematerialised by the shareholders, i.e. 78.75% of total shareholding as on March 31st 2014.

CONSERVATION OF ENERGY AND PARTICULARS OF EMPLOYEES:

Particulars pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo have been given under Annexure I. The disclosures as required under section 217(2A) of the Companies Act, 1956, has been given under Annexure II. Both the annexures form part of this report.

QULIFYING REMARKS IN AUDITORS'' REPORT:

There are no qualifications in Auditors report.

AUDITORS:

You are requested to appoint auditors for the ensuing year and to fix their remuneration. Present auditors M/s. P.G. Bhagwat, Chartered Accountants, having Firm Registration No: 101118W, are eligible for re-appointment.

ACKNOWLEDGMENT:

Your Directors wish to place on record their sincere appreciation for the continued support received from Managements of Central Bank of India, Bank of Baroda, Union Bank of India and Bank of India for providing working capital finance and Central Bank of India, Bank of Baroda, Sugar Development Fund, for providing long term finance for capital Investments, Tata Power Trading Co. Ltd., HESCOM & JESCOM for transmission of energy.

Your Directors thank the Government of India, Government of Karnataka, Government of Maharashtra, Government Authorities, Shareholders, Cane suppliers, Workers and Staff for their co-operation and contribution to the overall progress of the Company.

By order of the Board of Directors, For The Ugar Sugar Works Limited,

Place : Pune Date: 23-05-2014 R.V. Shirgaokar Chairman & Mentor


Mar 31, 2013

DEAR SHAREHOLDERS,

The Directors have pleasure in presenting their 73 rd Annual Report together with the Audited Financial Statements for the period ended 31 st March, 2013.

GENERAL:

All India Production of Sugar for the Season 2012-13 is expected to reach 245 lakh tonnes, as compared to the previous year''s production of 247 lakh tonnes. The Government of India, vide Gazette Notification dated 02/05/2013 has taken steps towards the decontrol of the Sugar Industry. The levy obligation has been removed from the production of 2012-13 season, so also the release mechanism has been done away.

Our total crushing at Ugar and Jewargi, during the season 2012-13 was 14.75 Lakh MT of sugar cane, bagging 15.28 Lakh Qtls. of sugar, with a recovery of 10.53% and 9.82% respectively.

FINANCIAL RESULTS:

The financial results of the Company are as shown below:

31.03.2013 31.03.2012 Particulars Rs. in Lakh Rs. in Lakh

Profit before Depreciation & Amortisation 4,412.51 5,694.04

Depreciation & Amortisation (2,469.94) (2,516.58)

Profit Before Tax & Exceptional items 1,942.57 3,177.46

Exceptional items 431.16

Provision for Tax, (including deferred tax adjustment, short provision for tax) / MAT Credit entitlement 197.56 1,037.06

Profit after Tax / Net Profit 1,745.01 1,709.24

Balance of profit brought forward from previous year 205.22 (997.14)

Profit available for appropriation 1,950.23 712.10

Appropriation to General Reserve 1,423.26 180.00

Proposed Dividend 225.00 281.25

Corporate Dividend Tax 38.24 45.63

Balance Carried in Profit and Loss Account 263.73 205.22

Earning Per Share (EPS) 1.55 1.52

DIVIDEND:

Your directors are pleased to recommend a dividend @ 20% (i.e. 20 paise per share) for the current financial year 2012-13.

OPERATIONS : SUGAR AT UGAR :

Sugar Season Sugar Season Particulars 2012-13 2011-12

Date of beginning of crushing season 19-10-2012 25-11-2011

Date of ending of crushing season 26-02-2013 04-04-2012

Number of Working Days 131 132

Sugar Cane Crushed (Lakh MT) 11.39 13.23

Recovery 10.53% 11.86%

Sugar Produced (Lakh Qtls.) 11.99 15.69

SUGAR AT JEWARGI :

Sugar Season Sugar Season Particulars 2012-13 2011-12

Date of beginning of crushing season 01-11-2012 11-11-2011

Date of ending of crushing season 26-03-2013 04-04-2012

Number of Working Days 146 146

Sugar Cane Crushed (Lakh MT) 3.36 3.66

Recovery 9.82% 10.86%

Sugar Produced (Lakh Qtls.) 3.29 3.97

DISTILLERY, IML PRODUCTION & ELECTRICITY GENERATION :

Financial Year Financial Year Particulars Unit 2012-13 2011-12

Rectified Spirit Produced (Lakh BL) Ugar 88.48 116.57

Denatured Spirit Produced (Lakh BL) Ugar 23.83 46.26

Potable Alcohol Produced (Lakh BL) Ugar 95.78 90.83

Electricity Generated (Lakh KW) Ugar 1,030.70 1,317.39

Electricity Exported (Lakh KW ) Ugar 611.00 800.23

Electricity Generated (Lakh KW ) Jewargi 345.44 436.35

Electricity Exported (Lakh KW ) Jewargi 227.82 283.76

Your Directors expect to procure about 16 to 18 Lakh MT sugarcane at Ugar and Jewargi Units during 2013-14 crushing season.

ENVIRONMENTAL SAFETY:

Our Company continues to pursue its environmental friendly approach towards Industrial growth. Constant improvements are being made in the process and equipments, to minimize the discharge of effluents and emissions.

FIXED DEPOSITS :

The number of Depositors, who have not claimed their deposits after maturity as on 31 st March, 2013, was 7 and the amount outstanding as on that date was Rs. 6.06 Lakh.

COST AUDIT :

Our Company has received the approval of the Central Government for the appointment of Shri. V. V. Deodhar, Cost Auditor, Mumbai to condu ct the Cost Audi t of Sugar and Ele ctrical Energy for the Financial Year 2012-13.

DIRECTORS :

Sarvashri. S.N. Inamdar, M. G. Joshi and D. B. Shah, retire by rotation and being eligible offer themselves for re-appointment. Their brief profile is given in the corporate Governance report.

DIRECTORS'' RESPONSIBILITY STATEMENT :

Pursuant to section 2 17 (2AA) of the Companies Act, 1956.

We confirm :

i] That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii] That the directors have selected such accounting policies and applied them consistently and made judgment 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 or loss of the Company for that period.

iii] That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv] That the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE :

Our Company has been following good Corporate Governance since its inception. The shares of our Company are listed on Bombay Stock Exchange Ltd., and National Stock Exchange of India Ltd., We are regularly and timely complying with the requirements as per the Listing Agreement. As required by SEBI Guidelines, a Corporate Governance Report is annexed.

CO-GENERATION AT UGAR & JEWARGI :

During this year electricity generated was 1,376.14 Lakh KW of which we have exported 838.82 Lakh KW through Tata Power Trading Company by consuming 4.39 Lakh MT of Bagasse & 0.02 Lakh MT of coal. During the Financial Year 2012-13, the electricity export rates received till March, 2013 were quite reasonable and the average rate realised during this year was Rs 4.88 per unit at Ugar and Jewargi.

DISTILLERY :

The production of Rectified Spirit was 88.48 Lakh BL as compared to 116.57 Lakh BL during the previous year. During the year under review, the supply of ethanol restarted and we have supplied 23.83 Lakh BL to the Oil Companies. The production during the year has come down as the distillery was closed for maintenance and expansion from 29 th June, 2012 till 19 th October, 2012.

We have commissioned 45 KLPD New Praj Distillery Unit at Ugar on 18 th October, 2012. The commercial production has started in the new distillery w.e.f. 20 th October, 2012.

INDIAN MADE LIQUOR (IML) AT UGAR :

The Company has manufactured 10.94 Lakh cases at Ugar during this year as against 10.34 Lakh cases during the previous year. Company has continued bottling its products at M/s. K. S. Distilleries and M/s. SDF Industries.

100% EXPORT ORIENTED UNIT (SUGAR SHIP) :

During the year under review EOU has exported sugar worth Rs.153.40 Lakh to maintain the positive Net Foreign Exchange status. We are receiving enquiries for providing the fondant mass and the response is positive.

UGAR QUALITY PACKAGING PVT. LTD., RATNAGIRI :

The Packaging Unit has incurred losses in the previous years and the bank has informed us to clear the outstanding loan of Rs. 599.00 Lakh, for which we have given Corporate Guarantee. As there was no possibility of revival of this unit, we have approached the Bank for one time settlement and as per Bank''s approval we have made payment of Rs 352.00 Lakh during the current year 2012-13, and the balance amount is paid on 30 th April, 2013. All the assets will be now transferred in o ur favou r.

DEMATERIALIZATION OF SHARES :

Our Company has provided connectivity with NSDL & CDSL for dematerialization of its shares for trading in electronic form under ISIN-No.INE071E01023. So far 8,83,16,898 equity shares have been dematerialised by the shareholders, i.e. 78.50% of total shareholding as on 31 st March,2013.

CONSERVATION OF ENERGY AND PARTICULARS OF EMPLOYEES :

Particulars pertaining to conservation of energy, technology absorption and foreign exchange earnings and out go have been given under Annexure I. The disclosures as required under section 217(2A) of the Companies Act, 1956, has been given under Annexure II. Both the annexures form part of this report.

QULIFYING REMARKS IN AUDITOR''S REPORT :

There are no qu alifying remarks in the Auditors Report.

AUDITORS :

You are requested to appoint auditors for the ensuing year and to fix their remuneration. Present auditors M/s. P.G. Bhagwat, Chartered Accountants, having Firm Registration No: 101118W, are eligible for re-appointment.

ACKNOWLEDGMENT :

Your Directors wish to place on record their sincere appreciation for the continued support received from Managements of Central Bank of India, Bank of Baroda, Union Bank of India, IDBI Ltd., and Bank of India for providing working capital finance and Central Bank of India, Bank of Baroda, Technology Development Board, Sugar Technology Mission and Sugar Development Fund, for providing long term finance for capital Investments, Tata Power Trading Co. Ltd., and HESCOM, for transmission of energy.

Your Directors thank the Government of India, Government of Karnataka, Government of Maharashtra, Government Authorities, Shareholders, Cane suppliers, Workers and Staff for their co-operation and contribution to the overall progress of the Company.

By order of the Board of Directors

For The Ugar Sugar Works Limited

Place : Panhala R. V. Shirgaokar

Date : 29-05-2013 Chairman & Mentor


Mar 31, 2010

The Directors have pleasure in presenting their 70lh Annual Report together with the Audited Financial Statements for the period ended 31st March, 2010.

GENERAL:

The Financial Year and Sugar Season 2009-10 was very dramatic for the entire sugar industry. As per the Agriculture Ministrys Report, during the crushing season 2009-10 the production was expected only upto 145 Lakh MT initially which lead to huge spurt in sugar prices upto January, 2010. Further Sugar Imports were allowed duty free and sugar export was banned. Government increased the Levy Sugar Ratio from 10% to 20% to improve the quantity of sugar for public distribution and to ease the sugar prices. The price of Levy Sugar remained unchanged at Rs. 1,345 per Qtl., till 31s March 2010. But suddenly the scenario changed as the production estimates were changed due to late rains and the sugar production was expected around 185 Lakh MT due to which sugar prices tumbled. The cane area is expected to increase during Sugar Season 2010-11 and the production is expected to be around 210 Lakh MT.

Our total crushing at Ugar and Jewargi, during the season 2009-10 was 16.29 Lakh MT of sugar cane with bagging of 18.64 Lakh Qtls. of sugar with a recovery of 11.54% and 10.09% respectively. The ratio of Levy to Free has been changed to 20% Levy and 80% Free sale.

FINANCIAL RESULTS:

The financial results of the Company are as shown below:

31.03.2010 31.03.2009 Particulars Rs in Lakh Rs in Lakh

Profit before Depreciation & Amortisation 636.11 4,673.21

Depreciation & Amortisation (3,442.45) 1,690.40

Profit Before Tax (2,806.34) 2,982.81

Provision forTax, (including deferred tax adjustment and short/excess provision for tax) 802.70 1,495.90

Profit afterTax/Net Profit (2,003.64) 1,486.91

Balance of profit broughtforward from previous year 604.93 647.07

Profit available forappropriation (1,398.71) 2,133.98

Appropriation to General Reserve 0.00 1,200.00

Proposed Dividend 0.00 281.25

Corporate Dividend Tax 0.00 47.80

Balance Carried in ProfitandLossAccount (1,398.71) 604.93

Earning PerShare(EPS) (1.78) 1.54

REASONS FOR LOSS FORTHE FY2009-10

The Company has suffered a loss of Rs. 1,398.71 Lakh during the Financial Year 2009-10 after adjusting carried forward profits for previous year as compared to profit of Rs. 2,133.98 Lakh during last year due to following reasons:

a) The Company has paid additional cane price of Rs. 300/- (total Rs. 1,700/-) amounting to Rs.3,436.36 Lakh forthe season 2008-09.

b) The average rate of Electricity exported has come down from Rs.7.48 per unit in the previous year to Rs.3.36 per Unit in current year.

c) Depreciation provided on the assets pertaining to Jewargi Unit amounted to Rs. 2,155.22 Lakh and interest on Term Loans pertaining to Jewargi Unit amounted to Rs. 766.17 Lakh aggregating to Rs. 2,921.39 Lakh i.e. depreciation and interest on Jewargi Unit during Financial Year 2009-10.

d) Higher payment of Harvesting & Transport charges amounting to Rs. 834.80 Lakh has increased the cost of production at Jewargi Unit and further substantial fall in ex-factory sugar prices from Rs. 3,900 per Qtl. to Rs. 2,600 per Qtl. has resulted into loss at Jewargi Unit being production cost more than the market price.

Managements view on future operations :

Although there is a loss at Jewargi Unit, the unit has performed well during the season 2009-10. We were able to crush around 2.02 Lakh MT of sugar cane and production was 2.08 Lakh Qtls of sugar at a recovery of 10.09%. The harvesting cost will be reduced in the coming season by bringing more cane from nearby area and improvement in the recovery by procuring better quality cane. Management is confident of turning the table during the coming years by improving the performance of Jewargi as well as all other units and to show profits during the coming year.

DIVIDEND:

In view of inadequate profits, your directors have not recommended any dividend for the Financial Year 2009-10.

OPERATIONS:

SUGAR at UGAR :

Particulars Sugar Season Sugar Season 2009-10 2008-09

Date of beginning of crushing season 26-10-2009 10-10-2008

Date of ending of crushing season 03-04-2010 01-03-2009

Number of Working Days 160 143

SugarCane Crushed (Lakh MT) 14.27 13.34

Recovery 11.54% 10.94%

Sugar Produced (Lakh Qtls.) 16.56 14.68

SUGAR at JEWARGI:

Particulars Sugar Season 2009-10

Date of beginning of crushing season 02-11-2009

Date of ending of crushing season 21-04-2010

NumberofWorking Days 171

SugarCane Crushed (Lakh MT) 2.02

Recovery 10.09%

Sugar Produced (Lakh Qtls.) 02.08

DISTILLERY, IML PRODUCED & ELECTRICITY GENERATED:

Particulars Financial Year Financial Year 2009-10 2008-09

Rectified Spirit Produced (Lakh BL) 85.94 98.87

Denatured Spirit Produced (Lakh BL) 16.95 38.33

PotableAlcohol Produced (Lakh BL) 82.25 53.87

Electricity Generated (Lakh KW) 1,358.60 1,247.71

Electricity Exported (LakhKW) 772.57 697.11

Electricity includes generation & export of Jewargi Unit.

Your Directors expect to procure about 20 Lakh MT sugarcane at Ugarand Jewargi Unit during 2010-11 crushing season.

ENVIRONMENTAL SAFETY:

Our Company continues to pursue its environmental friendly approach towards Industrial growth. Constant improvements are being made in the process and equipments, to minimize the discharge of effluents and emissions.

FIXED DEPOSITS:

The number of Deposit-holders, who have not claimed their deposits after maturity as on 31s March, 2010 were 4 and the amount outstanding as on that date was Rs. 4.42 Lakh.

COST AUDIT:

Our Company has received the approval of Central Government for the appointment of Shri. V. V. Deodhar- Cost Auditor, Mumbai to conduct the Cost Audit of Sugar and Industrial Alcohol for the Financial Year 2009-10.

DIRECTORS:

Sarvashri.S. N. Inamdarand M. G. Joshi, retire by rotation and being eligible offerthemselves for re-appointment.

Shri. Sanat K. Shirgaokar was appointed as an Additional Director on 28" January, 2010. He being eligible, offers himself for re-appointment and a notice from a member proposing his candidature has been received under section 257 of the Companies Act, 1956.

Shri. B. N. Kalyani and Shri. B. S. Patil have resigned from the Board w.e.f. 19:" March, 2010.The Board places on record its appreciation for the services rendered by them during their tenure as member of the Board.

DIRECTORSRESPONSIBILITY STATEMENT:

We confirm:

i] That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii] That the directors have selected such accounting policies and applied them consistently and made judgment 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 or loss of the Company for that period.

iii] That the directors have taken proper and sufficient care for the maintenance of adecuate accounting records in accordance with the provisions of this Act tor safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv] That the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

Our Company has been following good Corporate Governance since its inception. The shares of our Company are listed on Bombay Stock Exchange Ltd., and we are regularly and timely complying with the filing requirements as per Listing Agreement. As required under SEBI Guidelines, a Corporate Governance Report is annexed.

CO-GENERATION AT UGAR:

During this year electricity generated was 1,128.11 Lakh KWatUgar of which we have exported 611.72 Lakh KW through Tata Power Trading Company by consuming 4.27 Lakh MT of Bagasse. During the Financial Year 2009-10 the electricity purchase rate was very low, due to which export of power has come down. The repaired turbine was received at the middle of the crushing season 2009-10, however due to low tariff rates we have not operated the same. The average electricity export rate realised during the season was Rs 3.36 at Ugar and Rs 4.25 at Jewargi.

DISTILLERY:

The production of Rectified Spirit was 85.93 Lakh BL as compared to 98.87 Lakh BL during the previous year. The Evaporator and Dryer System of the ETP has underperformed due to technical problems resulting in lower production.

During the year under review, the production of ethanoi has come down substantially due to absence of demand from the Oil Companies.

INDIAN MADE LIQUOR (IML):

The Company manufactured 9.39 Lakh cases during this year as against 6.14 Lakh cases during the previous year. During the year the sales have gone up by 53% as cpmpared to last year. Company is making further efforts to enter in the Andhra Pradesh, Delhi liquor market in addition to Karnataka and Kerala.

Company has introduced new premium range "Sandpiper" Whisky and Brandy into the market which is well received. We expect to substantially improve the performance during the next year.

EXPORT ORIENTED SUGARSHIP (100% EOU):

During the year under review the EOU has exported sugar ships worth Rs. 260 Lakh as against Rs. 71.73 Lakh in the previous year to M/s Fragies (GmbH), Germany including one container each exported to Dubai and Qatar. The export orders from M/s. Fragies could take good shape after their agreement with Netto materialized from November, 2009. Although the supplier of the machinery M/s. Kloeckner, has assured the production of 75,000 ships per hour, the maximum production achieved till the previous year was approximately 50,000 ships per hour. Due to the modifications carried out internally by our staff, the production of 58,000 to 60,000 exportable ships is possible now. M/s. Fragies (GmbH), Germany, who are supposed to buy-back 100% of the capacity, has not been able to do so in the current year. We are following up with both of them in this regard.

The EOU has maintained the positive NFE status as achieved in the previous year. We have received the permission from Asst. Development Commissioner, Bangalore, for sale of sugar ships in Domestic Tariff Area (DTA). The DTA sales activity and brand development as per consultation with SAMSIKA MARKETING CONSULTANTS PVT LTD., MUMBAI are being done. The DTAsales are picking up slowly and we could sell sugar ships worth Rs. 3.98 Lakh during the year.

EXPANSION AND DIVERSIFICATION:

1. Jewargi Unit:

The crushing activity has started at this unit from 02";: November, 2009. Crushing at this unit during season 2009-10 was satisfactory due to good cane availability and satisfactory performance of the machineries installed. The sugar cane crushed at this unit was 2.02 Lakh MT sugar cane and production was 2.08 Lakh Qtls. of sugar with a recovery of 10.09% upto season end. The recovery was on the lower side as we had to bring cane from longer distance to the factory.

We have generated 234.24 Lakh KW and exported 155.82 Lakh KW of electricity to Tata Power Trading Company by consuming 0.58 Lakh MT of Bagasse and 0.09 Lakh MTofCoal.

2. Joint Venture Sadashiva Sugars Ltd.

During the year under report the Company came out of the Joint Venture with M/s Sadashiva Sugars Ltd., during the month of October, 2009 and the value of investment i.e. the equity shares amounting to Rs. 22,33,54,000/-was realized.

3. Packaging Unit: M/s. Ugar Quality Packaging Pvt. Ltd.

The production has started at this unit in full swing. The Company has received and executed export orders (Export & Deemed Export) worth Rs. 602 56 Lakh during current financial year 2009-10 as compared to Rs. 495.91 Lakh during the previous year. The Company has received good and repeated orders for export and local market. The Company has incurred a cash loss of Rs. 44.71 Lakh in the first half i.e. April, 09 to September, 09, however, during the second half the working capital in form of Packing Credit was made available and also the cost of Interest was reduced due to lower rate of interest on Packing Credit, similarly the Letter of Credit (LC) facility helped in reducing the cost of purchase, which has resulted in Cash Profit of Rs. 8.38 Lakh during second half. Over all the Company has incurred a Cash loss of Rs. 36.33 Lakh during the current financial year. The management expects to achieve a sales target of about Rs. 900 Lakh during the next Financial Year 2010-11. The Company has also taken steps to reduce the cost by importing the raw material required for the production and better sourcing locally and also by improvising manufacturing process.

BOTTLING:

We have continued the arrangements to bottle our IML products with M/s. K.S. Distilleries, M/s. Kaycee Distilleries and M/s. S. D. F. Industries in Kerala State. During the year 2009-1 Owe have bottled 9.40 Lakh cases.

SAP-SYSTEM, APPLICATIONS AND PRODUCT:

In our last Annual Report, we had informed that the new SAP system is introduced at Ugar w.e.f, 05:" December, 2008. The system is functioning quite well due to lot of efforts put in by our staff and senior members.

Further, Company has also implemented the SAP at Jewargi Unit w.e.f. 01st April, 2010.

DEMATERIALIZATION OF SHARES:

Our Company has provided connectivity with NSDL & CDSL for dematerialization of its shares for trading in electronic form under ISIN-No.lNE071E01023. So far 8,07,04,349 shares have been dematerialised by the shareholders, i.e. 71.73% of total shareholding.

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CONSERVATION OF ENERGY AND PARTICULARS OF EMPLOYEES:

Particulars pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo and particulars of employees pursuant to sections 217(1 )(e) and 217(2A) respectively of the Companies Act, 1956 have been given underAnnexure I & II respectively, forming an integral part of this Report.

AUDITORS:

You are requested to appoint auditors for the ensuing year and to fix their remuneration. Present auditors M/s. P.G. Bhagwat, Chartered Accountants, having Firm Registration No. 101118W, are eligible for re-appointment.

ACKNOWLEDGMENT:

Your Directors wish to place on record their sincere appreciation for the continued support received from Managements of Central Bank of India, Bank of Baroda, Union Bank of India, The IDBI Ltd., Bank of India, ICICI Bank Ltd., and IFCI Factors Ltd., for providing working capital finance and Central Bank of India, Bank of Baroda, Rabo International., Axis Bank Ltd., Technology Development Board, Sugar Technology Mission and Sugar Development Fund, for providing long term finance for capital Investments and Government of India and Government of Karnataka for sanctioning subsidy and Deferment of Cane Purchase Tax and Tata Power Trading Co. Ltd., and HESCOMj for transmission and purchase of energy.

Your Directors thank the Government of Karnataka, Government Authorities, Shareholders, Cane suppliers, Workers and Staff for their co-operation and contribution to the general progress of the Company.

By order of the Board of Directors ForThe UgarSugarWorks Limited Place:Pune R.V.Shirgaokar Date:28-05-2010 Chairman &Mentor

 
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