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Directors Report of Ugar Sugar Works Ltd.

Mar 31, 2018

DEAR SHAREHOLDERS,

The Directors have pleasure in presenting their 78th Annual Report together with the Audited Financial Statements for the period ended 31st March, 2018.

GENERAL:

All India Production of Sugar for the Season 2017-18 is expected to reach 315 Lakh tonnes, as compared to the previous year’s production of203 Lakh tonnes. The Government of India has continued with the decontrol mechanism.

Our total crushing of sugarcane at Ugar and Jewargi, during the season 2017-18 was 21.29 Lakh MT, bagging of Sugar23.96 Lakh Qtls., and recovery of 11.25% and 10.01% respectively.

FINANCIAL RESULTS:

The brief financial results ofthe Company are as shown below:

Particulars

31.03.2018 Rs. in Lakh

31.03.2017 Rs. in Lakh

Total Revenue

80191.41

76166.85

Total Expenditure (excluding Depreciation & Amortisation)

(84876.50)

(71902.66)

Profit before Depreciation & Amortisation

(4685.09)

4264.19

Depreciation & Amortisation

1947.92

1468.39

Profit Before Tax / (Loss) & Exceptional items

(6633.00)

2795.81

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

186.08

198.62

Profit after Tax / Net Profit / (Loss)

(6819.08)

2597.19

Other Comprehensive Income

254.85

(254.51)

Total Comprehensive Income for the period (Comprising Profit (Loss) and other Comprehensive Income for the period)

(6564.23)

2342.68

Earnings Per Share (EPS)

(6.06)

2.31

Although this year Company has done Maximum Crushing with good recovery, due to steep fall in Sugar Prices there is a loss of Rs. (6819.08) Lakh. The Central Government is taking various measures to stabilise the sugar price, like Export of Sugar providing 20 Lakh MT minimum indicative export quotas (MIEQ), Ethanol policy. We are also expecting the following incentives from Central/State Government: 1. Buffer Stock 30 Lakh MT, 2. Increase in Ethanol Price,

3. SugarMSP(Minimumselling price) Rs.30 .

Transfer to Reserve: - No amount has been transferred to Reserve forthe financial year 2017-18. DIVIDEND:

Due to the losses incurred during the year, the Board has not recommended any Dividend forthe Financial Year 2017-18. (Previous year2016-17 Dividend @20% (i.e. Re 0.20 per share of Re 1/- each).

OPERATIONS: SUGAR AT UGAR:

Particulars

Sugar Season 2017-18

Sugar Season 2016-17

Date of beginning of crushing season

Date of ending of crushing season

Number of Working Days

Sugar Cane Crushed (Lakh MT)

Recovery

Sugar Produced (Lakh Qtls.)

27-10-2017

06-03-2018

131

17.84

11.25%

20.50

10-11-2016

30-01-2017

82

8.51

10.53%

9.25

SUGAR AT JEWARGI :

Particulars

Sugar Season 2017-18

Sugar Season 2016-17

Date of beginning of crushing season

Date of ending of crushing season

Number of Working Days

Sugar Cane Crushed (Lakh MT)

Recovery

Sugar Produced (Lakh Qtls.)

08-11-2017

15-03-2018

128

3.45 10.01

3.46

10-11-2016

18-01-2017

70

1.42

8.91%

1.27

DISTILLERY, IML PRODUCTION & ELECTRICITY GENERATION :

Particulars

Unit

Financial Year 2017-18

Financial Year 2016-17

Rectified Spirit Produced (Lakh BL)

Ugar

106.48

87.43

Denatured Spirit Produced (Lakh BL)

Ugar

28.10

37.03

Potable Alcohol Produced (Lakh BL)

Ugar

64.42

70.45

Electricity Generated (Lakh KW)

Ugar

1307.88

646.94

Electricity Exported (Lakh KW )

Ugar

685.00

320.86

Electricity Generated (Lakh KW )

Jewargi

316.70

140.98

Electricity Exported (Lakh KW )

Jewargi

204.09

72.58

Your Directors expect to procure about 20 to 22 Lakh MT sugarcane at Ugar and Jewargi Units during 2018-19 crushing season.

ENVIRONMENTALSAFETY:

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 not accepted fresh deposits from public pursuant to Section 73 or 76 ofthe CompaniesAct, 2013 read with The Companies (Acceptance of Deposits) Rules, 2014. However, 2 (Two) Depositors, who have not claimed their deposits after maturity as on 31st March, 2018 and the amount outstanding as on that date, was Rs.2.92 Lakh. These amounts are lying with the Company as there is litigation amongst the heirs about the true ownership ofthe deposits. As and when court order is received, amounts will be paid.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Company has not advanced any loans pursuantto Section 186 ofthe CompaniesAct, 2013. The Guarantees given to the financial institutions amounting to Rs. 50 Cr. to Union Bank of India, and Rs. 66.55 Cr. to Bank of India. The investments covered under the provisions of Section 186 ofthe CompaniesAct, 2013 are given in the notes to the Financial Statements at Note No. A-03.

DIRECTORS RETIRE BY ROTATION:

- Shri. P. V. Shirgaokar, age 79 years, is liable to retire by rotation at this AGM & being eligible offers himself for reappointment. Being a fit and proper person Board intends to reappoint him as a Director.

- Shri. Shishir Shirgaokar aged 73 years, is liable to retire by rotation at this AGM & being eligible offers himself for reappointment. Being a fit and proper person Board intends to reappoint him as a Director.

- Declaration is given by all Independent Directors:

- All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) ofthe CompaniesAct, 2013 and Regulation 46 of SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015. The details of appointment of independent Directors are disclosed on Company’s 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 SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015, 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 its 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 matters as prescribed under the provisions of Section 178 of Companies Act and Regulation 19 of SEBI (LODR) 2015. The Nomination & Remuneration Policy is available on the website ofthe Company on the following link......

http://web.ugarsugar.com/Investor_Relations/Corporate_Announcements.asp?child=3&parent=7

- Meetings:

During the year, Seven Board Meetings and FourAudit 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 underthe CompaniesAct, 2013.

DIRECTORS’RESPONSIBILITYSTATEMENT:

Pursuantto the provisions of Section 134(5) ofthe CompaniesAct, 2013, we confirm that-

i] That in the preparation ofthe 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 ofthe state of affairs ofthe Company at the end ofthe financial year and ofthe profit and loss ofthe Company forthat 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 ofthe Company and for preventing and detecting fraud and other irregularities;

iv] The directors had prepared the annual accounts on a going concern basis;

v] The directors, in case of listed company had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and;

vi] The directors 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 perthe Listing Agreement. Company has paid the Annual Listed Fees forthe Financial Year2017-18.As required by SEBI Guidelines, a Corporate Governance Report is annexed.

CO-GENERATIONATUGAR&JEWARGI:

During this year electricity generated was 1624.58 Lakh KWof which we have exported 889.09 Lakh KWthrough Tata PowerTrading Company, HESCOM, BESCOM, CESCOM, MESCOM and GESCOM by consuming 5.44 Lakh MT ofBagasse.

DISTILLERY:

The production of Rectified Spirit was 106.48 Lakh BLas compared to 87.43 Lakh BLduring the previous year. During the year under review, we have supplied 28.10 Lakh BL to the Oil Companies. The production at distillery has improved during the year.

INDIAN MADE LIQUOR(IML) AT UGAR:

The Company has manufactured 7.34 Lakh cases at Ugar during this year as against 7.93 Lakh cases during the previous year. The sales have substantially come down due to non working of IML Section for 2 months, which has effected on oursales. Company has continued bottling of its products at M/s. K. S. Distilleries and M/s. SDF Industries.

DEMATERIALIZATION OF SHARES:

Our Company has provided connectivity with NSDL & CDSL for dematerialization of its shares fortrading in electronic form under ISIN-No: INE071E01023. So far 9,18,64,682. Equity shares have been dematerialised by the shareholders, i.e.81.66% of total shareholding as on 31st March, 2018. The annual fees of depositories forthe FY 2017-18 have been paid by the Company.

CONSERVATION OF ENERGYAND 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) ofthe Companies Act, 2013, read with Rule, 8 ofThe Companies (Accounts) Rules, 2014 have been given under Annexure II. Both the annexures form part of this report.

ASSOCIATE COMPANIES: UGAR THEATRE PVT. LTD.

Ugar Theatre Pvt Ltd, has again become our Associate Company during the year. It was incorporated on 29-11-1977, with an intention to exhibit films forthe 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. As the transactions are not material in nature, the financials have not been consolidated as perthe relevantAccounting Standards.

Brief Financials ofthe Company:

Particulars

31.3.2018 Rs. in Lakh

31.03.2017 Rs. in Lakh

Total Revenue

378,600

375,503

Total Expenditure

458,272

208,506

Profit Before Tax / (Loss)

(79,672)

166,997

QUALIFYINGREMARKSINAUDITORS’REPORT:

There are no qualifying remarks in the StatutoryAuditors Report.

The SecretarialAuditorhas made following observations in his Report,

i) Company has received a letter levying penalty from Bombay Stock Exchange for delay in submission of PDF scan copy ofthe financial results forthe Quarter ended September, 2017 under Regulation 33 of SEBI (LODR) 2015.

- Reply:- Company has submitted the Financial Results for September, 2017 quarter in XBRL Format within the stipulated time however, there was delay in forwarding the PDF Scan copies due to the technical issues with the system. The Company has given a letterforwaiverof penalty to BSE which is underconsideration.

i) There has been delay in payment of Fair and Remunerative Price of Sugarcane forthe sugarseason 2017-18.

- Reply:- Due to sudden fall in Sugar Prices there are financial crisis forthe entire Sugar Industry and efforts are on for completing the obligation.

AUDITORS: StatutoryAuditors

The Company’s Auditors, M/s. Kirtane & Pandit LLP, Chartered Accountants, having FRN- 105215Wwere appointed fora term of five years subject to ratification every year. They have confirmed their eligibility under Section 141 ofthe Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors ofthe Company for financial year2018-19.As required under Clause 49 ofthe ListingAgreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.

Cost Auditors

Pursuantto Section 148 ofthe Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records are maintained by the Company in respect of its Cost Audit of Sugar and Electrical Energy. Your Directors have appointed Mr. V. V. Deodhar, Cost Accountant, Mumbai (Membership No. 3813) on the recommendation of the Audit Committee, to audit the cost accounts ofthe Company for the financial year2018-19 on a remuneration ofRs.2,30,000/-subjectto the ratification by General Body.

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 Secretaries in Practice, Miraj (Membership No A28983) to undertake the Secretarial Audit ofthe Company who has consented to the same. The Report ofthe SecretarialAudit Report is annexed herewith as “Annexure III”.

CORPORATE SOCIAL RESPONSIBILITY

In orderto fulfill the Social Commitments ofthe Company, it has carried out CSR activity and the eligible amount has been spent for various CSR activities. The Report ofthe CSR is annexed herewith as “Annexure IV”.

INTERNAL FINANCIAL CONTROL:

The Company has Internal Financial Controls with proper checks and balances to 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 PARTYTRANSACTIONS:

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 ofthe 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 ofthe Company at large.

The Company has taken Omnibus approval of Audit Committee for the Related Party Transaction. All Related Party Transactions were placed before theAudit Committee and the Board fortheir approval.

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

Details relating to Related Party Transactions are shown in Form No. AOC-2: (Pursuantto clause (h) ofsub-section (3) of section 134 oftheActand Rule 8(2) ofthe Companies (Accounts) Rules, 2014) is attached as Annexure V.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRUBUNALS IMPACTING THE GOING CONCERNS STATUSAND COMPANY’S OPERATION IN FUTURE:

There are no significant and material orders passed by any regulatory authority, court ortribunal which shall impact the going concern status and company’s operations in future.

EXTRACT OFANNUAL RETURN

The details forming part ofthe extract of theAnnual Return in Form MGT-9 is annexed herewith as “Annexure VI”. DETAILS OF REMUNERATIONAS REQUIRED UNDERSECTION 178 &197 (12):

Details of Remuneration as required under Section 178 and 197 (12) ofthe CompaniesAct, 2013 Read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as “Annexure VII.”

WHISTLE BLOWER POLICY/VIGIL MECHANISM:

Pursuant to the provisions of Section 177 ofthe Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 22 ofthe SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, 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 HARASSMENTOFWOMENATWORKPLACE:

The Company has in place a policy on prevention, prohibition & redressal of sexual harassment of women at work place and an Internal Complaints Committee has been constituted. No complaints are received during the year.

RISK MANAGEMENT POLICY

Details of Risk Management Policy as required under the provisions of Companies Act 2013 is placed on the Company’s website www.ugarsugar.com.

CHANGE IN NATURE OF BUSINESS, IFANY

There is no change in nature of Business ofthe company 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 forCapital Investments, Tata PowerTrading Co. Ltd., and Electricity Supply Company (ESCOMS), 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 ofthe Company.

By order of the Board of Directors,

For The Ugar Sugar Works Limited,

B. G. Kulkarni

Place : Pune GM Corporate Affairs & Company Secretary

Date : 25-05-2018 (F-2805)

Regd. Office: Mahaveer Nagar,

Sangli-416416.


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, 2012

The Directors have pleasure in presenting their 72nd Annual Report together with the Audited Financial Statements for the year ended 31st March, 2012.

GENERAL:

All India Production of Sugar for the Season 2011-12 is expected to reach 26 million tonnes as a result of good monsoon and increase in sugar plantation area, as compared to the previous years production of 24.3 million tonnes. The government has permitted export of 3 million tonnes sugar during the year. The levy obligation remain stable at 10%.

The sugar cane crushed during the season 2011-12 at Ugar and Jewargi was 16.89 Lakh MT. Your company has produced 19.78 Lakh Qtls., of sugar at Ugar and Jewargi at an average recovery of 11.86% and 10.86% respectively.

FINANCIAL RESULTS:

The financial results of the Company are as shown below:

31.03.2012 31.03.2011 Particulars Rs. in Lakh Rs. in Lakh

Profit before Depreciation & Amortisation 5,694.04 3,251.89

Depreciation & Amortisation (2,516.58) (2,866.44)

Profit Before Tax & Exceptional items 3,177.46 385.45

*Exceptional items 431.16 0.00

Provision for Tax, (including deferred tax adjustment, short/excess provision for tax) 1,037.06 (16.12)

Profit after Tax / Net Profit 1,709.24 401.57

Balance of profit / (loss) brought forward from previous year (997.14) (1,398.71)

Profit available for appropriation 712.10 (997.14)

Appropriation to General Reserve 180.00 0.00

Proposed Dividend 281.25 0.00

Corporate Dividend Tax 45.63 0.00

Balance Carried in Profit and Loss Account 205.22 (997.14)

Earning Per Share (EPS) 1.52 0.36

* Explanation on Exceptional items:

Exceptional Items of (Rs. 431.16 Lakh) comprises of a Provision for loss on investments in shares of M/s. Ugar Quality Packaging Pvt. Ltd., and provision for part of Corporate Guarantee Loss given on behalf of M/s. Ugar Quality Packaging Pvt. Ltd., for secured loan limits.

DIVIDEND:

Your directors are pleased to recommend a dividend @ 25% (i.e. 25 paise per share).

OPERATIONS:

SUGAR AT UGAR:

Sugar Season Sugar Season Particulars 2011-12 2010-11

Date of beginning of crushing season 25-11-2011 04-11-2010

Date of ending of crushing season 04-04-2012 29-04-2011

Number of Working Days 132 177

Sugar Cane Crushed (Lakh MT) 13.23 15.99

Recovery 11.86% 11.26%

Sugar Produced (Lakh Qtls.) 15.69 18.00

SUGAR AT JEWARGI:

Sugar Season Sugar Season Particulars 2011-12 2010-11

Date of beginning of crushing season 11-11-2011 10-11-2010

Date of ending of crushing season 04-04-2012 05-05-2011

Number of Working Days 146 177

Sugar Cane Crushed (Lakh MT) 3.66 3.47

Recovery 10.86% 11.06%

Sugar Produced (Lakh Qtls.) 3.97 3.84

DISTILLERY, IML PRODUCED & ELECTRICITY GENERATED :

Financial Year Financial Year Particulars 2011-12 2010-11

Rectified Spirit Produced (Lakh BL) - Ugar 116.57 94.08

Denatured Spirit / Ethanol Produced (Lakh BL) - Ugar 46.26 30.99

Potable Alcohol Produced (Lakh BL) - Ugar 90.83 89.38

Electricity Generated (Lakh KW ) - Ugar 1,317.39 1,157.57

Electricity Exported ( Lakh KW ) - Ugar 800.23 647.54

Electricity Generated (Lakh KW ) - Jewargi 436.35 322.00

Electricity Exported (Lakh KW) - Jewargi 283.76 208.02

Your Directors expect to procure about 20 to 22 Lakh MT sugarcane at Ugar and Jewargi Units during 2012-13 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, 2012 were 6 and the amount outstanding as onthat date was Rs. 4.28 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 CostAudit of Sugar and IndustrialAlcohol for the Financial Year 2011-12.

DIRECTORS:

Sarvashri. Dr. M. R. Desai, V Balasubramanian and Sanat K. Shirgaokar, retire by rotation and being eligible offer themselves for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT:

We confirm:

i] That in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith 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 thisAct 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 ourCompany are listed on Bombay Stock Exchange Ltd., and National Stock Exchange of India Ltd., and we are regularly and timely complying with the requirements of ListingAgreement. As required by SEBI Guidelines, a Corporate Governance Report is annexed.

CO-GENERATIONAT UGAR & JEWARGI:

During this year electricity generated was 1,753.74 Lakh KW of which we have exported 1,083.99 Lakh KW through Tata Power Trading Company & HESCOM by consuming 5.22 Lakh MT of Bagasse. During the Financial Year 2011-12, the electricity export rates received till March, 2012 were quite reasonable and the average rate realised during this year was Rs 5.56 per unit at Ugar and Jewargi.

DISTILLERY:

The production of Rectified Spirit was 116.57 Lakh BL as compared to 94.08 Lakh BL during the previous year. During theyear under review, we have supplied 23.78 Lakh BL Ethanol to the Oil Companies.

INDIAN MADE LIQUOR (IML) AT UGAR:

The Company has manufactured 10.34 Lakh cases at Ugar during this year as against 10.22 Lakh cases during the previous year. Company has continued bottling its products at M/s. K. S. Distilleries, M/s. SDF Industries, M/s. Chamundi Distillery & Winery.

With exhaustive marketing efforts, we expect to sustain and improve the performance during the next year.

100% EXPORT ORIENTED UNIT (SUGAR SHIP):

During the year under review the export of Sugar Ships was Rs. 44.62 Lakh. EOU has exported sugar worth Rs. 804.93 Lakh to maintain the positive NFE status during the year.

No further export orders are received from Fragies (GmbH), Germany after May, 2011.

UGAR QUALITY PACKAGING PVT. LTD., RATNANGIRI:

In view of the continuous losses incurred by this unit, we have decided to stop the manufacturing activities. Company has made provision against diminution in the value of investment and part of corporate guarantee liability.

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 8,46,03,242 shares have been dematerialised by the shareholders, i.e. 75.20% of total shareholding as on 31st March,2012.

CONSERVATION OF ENERGY AND PARTICULARS OF EMPLOYEES:

Particulars pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo under section 217(1)(e ) have been given under Annexure I and particulars of employees pursuant to section 217(2A) of theCompanies Act, 1956, has been given underAnnexure II, forming integral part of this report.

QULIFYING REMARKS IN AUDITORS’ REPORT:

There are no qualifying remarks in the Auditors’ Report forthecurrent financial year.

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 Bank 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 TradingCo. Ltd., andHESCOM, 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: Mumbai

Date: 15-05-2012 R. V. Shirgaokar

Chairman & Mentor


Mar 31, 2011

DEAR SHAREHOLDERS,

The Directors have pleasure in presenting their 71st Annual Report together with the Audited Financial Statements for the period ended 31st March, 2011.

GENERAL:

All India Production of Sugar for the Season 2010-11 is expected to reach 23 to 25 million tonnes as a result of good monsoon and increase in sugar plantation area, as compared to the previous years production of 18.8 million tonnes. The government permitted export of 4,50,000 tonnes of sugar during the year and also reduced the levy obligation from 20% to 10%.

Our total crushing at Ugar and Jewargi, during the season 2010-11 was 19.46 Lakh MT of sugar cane with bagging of 21.84 Lakh Qtls., of sugar at a recovery of 11.26% and 11.06% respectively.

FINANCIAL RESULTS:

The financial results of the Company are as shown below:

31.03.2011 31.03.2010

Particulars Rs. in Lakh Rs. in Lakh

Profit before Depreciation & Amortisation 3,251.89 636.11

Depreciation & Amortisation (2,866.44) (3,442.45)

Profit Before Tax 385.45 (2,806.34)

Provision for Tax, (including deferred tax adjustment, short/excess provision for tax and provision for FBT) 16.12 802.70

Profit after Tax / Net Profit 401.57 (2,003.64)

Balance of profit brought forward from previous year (1,398.71) 604.93

Profit available for appropriation (997.14) (1,398.71)

Earning Per Share (EPS) for the year 0.36 (1.78)

DIVIDEND:

In view of inadequate profits, your directors have not recommended any dividend for the Financial Year 2010-11.

OPERATIONS:

SUGAR at UGAR:

Particulars Sugar Season Sugar Season

2010-11 2009-10

Date of beginning of crushing season 04-11-2010 26-10-2009

Date of ending of crushing season 29-04-2011 03-04-2010

Number of Working Days 177 160

Sugar Cane Crushed (Lakh MT) 15.99 14.27

Recovery 11.26% 11.54%

Sugar Produced (Lakh Qtls.) 18.00 16.47

SUGAR at JEWARGI:

Particulars Sugar Season Sugar Season

2010-11 2009-10

Date of beginning of crushing season 10-11-2010 28-10-2009

Date of ending of crushing season 05-05-2011 21-04-2010

Number of Working Days 177 176

Sugar Cane Crushed (Lakh MT) 3.47 2.02

Recovery 11.06% 10.11%

Sugar Produced (Lakh Qtls.) 3.84 2.05

DISTILLERY, IML PRODUCED & ELECTRICITY GENERATED :

Particulars Financial Year Financial Year

2010-11 2009-10

Rectified Spirit Produced (Lakh BL) 94.08 85.94

Denatured Spirit Produced (Lakh BL) 30.99 16.95

Potable Alcohol Produced (Lakh BL) 89.38 82.25

Electricity Generated (Lakh KW ) 1,479.58 1,358.60

Electricity Exported (Lakh KW ) 855.56 772.57

Electricity includes generation & export at Ugar and Jewargi Units.

Your Directors expect to procure about 20 to 22 Lakh MT sugarcane at Ugar and Jewargi Units during 2011 - 12 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 31st March, 2011 was 10 and the amount outstanding as on that date was Rs. 15.54 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 2010-11.

DIRECTORS:

Sarvashri. R.V. Shirgaokar, A. B. Kage and D. B. Shah retire by rotation and being eligible offer themselves for re-appointment.

Shri. Niraj S. Shirgaokar and Chandan S Shirgaokar were appointed as an Additional Directors w.e.f. 1st April, 2011, liable to retire at ensuing Annual General Meeting. Being eligible, offer themselves for re-appointment and a notice from a member proposing their candidature has been received under section 257 of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY 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 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., 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 & JEWARGI:

During this year electricity generated was 1,479.58 Lakh KW of which we have exported 855.56 Lakh KW through Tata Power Trading Company by consuming 4.92 Lakh MT of Bagasse. During the Financial Year 2010-11, the electricity export rates received till March, 2011 were quite reasonable and the average rate realised during the season was Rs 4.98 per unit at Ugar and Jewargi.

DISTILLERY:

The production of Rectified Spirit was 94.08 Lakh BL as compared to 85.94 Lakh BL during the previous year. During the year under review, the production of ethanol restarted and we have supplied 9.64 Lakh BL to the Oil Companies.

INDIAN MADE LIQUOR (IML) AT UGAR:

The Company manufactured 10.22 Lakh cases at Ugar during this year as against 9.39 Lakh cases during the previous year. Company has continued bottling its products at M/s. K. S. Distilleries, M/s. SDF Industries, M/s. Chamundi Distillery & Winery and Rana Sugar.

With exhaustive marketing efforts, we expect to substantially improve the performance during the next ye a r.

100% EXPORT ORIENTED UNIT (SUGAR SHIP) :

During the year under review the EOU has exported sugar ships worth Rs. 231.46 Lakh as against Rs.260 Lakh in the previous year to M/s Fragies (GmbH), Germany. The export orders from M/s. Fragies have taken a good shape. Further negotiations are on for supply order from Edeka and Rowe (Germany) in addition to Netto.

The EOU has maintained the positive NFE status during the year. We are in talk with Café Coffee Day for introducing our product at their 1000 retail outlets all over India and the positive results are coming up.

SAP – SYSTEM, APPLICATIONS AND PRODUCT:

As reported in the last annual report, the SAP system is extended at Jewargi Unit w.e.f. 01st April, 2010 and we are getting good results.

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 8,15,24,542 shares have been dematerialised by the shareholders, i.e. 72.47% of total shareholding.

LISTING OF SHARES ON NSE:

Company has received the Listing and Trading permission from National Stock Exchange of India Ltd., on 23rd August, 2010 and the equity shares are traded regularly.

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. With the latest amendment to section 217(2A) of the Companies Act, 1956, none of our employees are falling within the revised salary limit prescribed under particulars of employees.

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 reappointment.

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, 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: 20-05-2011 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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