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Directors Report of Uttam Sugar Mills Ltd.

Jun 30, 2015

The Directors take pleasure in presenting this Twentieth Annual Report together with the Audited Accounts for the year ended 30th June, 2015.

FINANCIAL RESULTS

The financial results of the Company for the period/year ended on 30th June 2015 are as under:-

DETAILS (Rs. in Lacs)

Period ended Period ended

30.06.2015 30.06.2014 (12 months) (15 months)

Revenue from Operations 75,961.24 87,161.19

Proft/(Loss) before Depreciation, Tax & Prior Period Items (8,728.99) (4,998.24)

Less:

Depreciation 2,329.20 4,082.50

Prior period items (Net) 10.49 (66.19)

Proft/(Loss) before Tax & Exceptional Items (11,068.68) (9,014.55)

Exceptional Items 98.17 -

Less: Provision for Taxation

Current Tax - -

Deferred Tax (Credit) / Charge (2,347.36) (3,484.74)

Proft/(Loss) after Taxation (8,819.49) (5,529.81)

Add: Balance brought forward from Previous Year (19,470.44) (13,940.63)

Deficit transferred to Balance Sheet (28,289.93) (19,470.44)

REVIEW OF OPERATIONS

The Financial Results for the year 2014-15 are for a period of 12 months & hence, are not comparable with the results of 2013-14 which were for a period of 15 months.

Sugar Division

Operational data of the Company for the financial year 2014-2015 and 2013-2014 are as under:

Financial Year Cane crushed Sugar produced Recovery % (In Lakhs Qtls.) (In Lakhs Qtls.)

2014-2015 234.33 22.81 9.73

2013-2014 216.33 19.90 9.20

Following are the season wise data of cane crushed and sugar produced:

Crushing Season Cane crushed Sugar produced Recovery % (In Lakhs qtls) (In Lakhs qtls)

2014-2015 234.33 22.81 9.73 2013-2014 193.94 17.40 8.97

The Company registered a gross turnover of Sugar of Rs.65090 lacs for the 12 months ended 30th June, 2015 against Rs. 76109 lacs for the 15 months ended 30th June, 2014 (Gross Turnover of Sugar of Rs 59459 lacs for the 12 months ended 30th June, 2014), an increase of gross turnover of 9.47 % on Pro rata Basis. The sales realization at Rs.3179 per qtls was lower as compared to Rs.3183 per qtls for the previous year 15 months ended 30th June, 2014.

During the current season, Company commenced its crushing season on 1st December 2014. The results were better as compared to previous season both in terms of Recovery and Crushing mainly due to the following reasons:

(i) Improved productivity, yield and sugar recovery, company's continuous effort in Cane Development activities like varietal replacement with proven high sugared varieties, Change in Pattern of Sowing, Ratoon Management, Encouraging use of Bio Fertilizers and Bio Pesticides etc.

(ii) Recovery was higher on account of optimum mix of better Cane Varieties.

Sugar: The Company's aggregate sugar cane crushing was higher at 234.33 lakhs qtls during the season 2014-15 as against 193.94 lakhs qtls in 2013-14 season due to higher cane availability. The Company had a higher recovery of 9.73% as against 8.97% in previous season. The higher recovery was mainly due to Cane Development Activities. The Company continued to focus on cane development activities, comprising of varietal replacement and modern agricultural practices due to which the recovery and crushing will improve in the coming season.

The Uttar Pradesh Government announced a State Advised Price (SAP) for sugarcane at Rs.280 per quintal for season 2014-15, which was the same as in the previous season. SAP price of Rs.280 per quintal was unreasonable, unaffordable and irrational; most UP-based sugar companies were compelled to suspend crushing for season 2014-15 and commenced after extensive deliberations between millers and the State Government the following consensus was arrived at:

i. The cane price of Rs.280 per quintal would be paid to farmers in two installments. The frst installment of Rs.240 per quintal would be paid as per normal practice and the remaining Rs.40 per quintal would be paid within three months after the end of the crushing season.

ii. State Govt. of U.P. / Uttrakhand had announced fnancial assistance of Rs. 28.60 per quintal of cane for the sugar season 2014-15 linked to average selling price of sugar and its by-products during the specified period from 1st October, 2014 to 31st May, 2015. However, this is subject to recommendation by the Committee constituted by the Government of Uttar Pradesh / Uttarkhand. The same has already been approved by the committee and payment of the same has already been made to the farmers directly by the government and adjusted in our cane dues in case of Uttar Pradesh. In case of Uttarkhand, part- payment has already made by the Government and remaining part is likely to be made in the month of November 2015.

iii. U.P. Government also granted additional concessions/ reliefs of Rs.11.40 per quintal of cane to the millers for the season 2014-15 under the following heads:

Rs.(per qtls) - Waiver of Entry Tax on sugar - 2.80

- Waiver of cane purchase tax - 2.00

- Waiver/ reimbursement of Society Commission - 6.60 Total 11.40

Similar relief also provided by Uttarakhand Government for Season 2014-15.

Apart from the Cane Development Activities like varietal replacement, Change in Pattern of Sowing, Ratoon Management etc. company is further strengthening the Cane Development Activities by way of Development of In house Agri research centre, Integrated Pest Management Programmed, Soil Testing Facilities, Encouraging use of Bio Fertilizers and Bio Pesticides and Training facilities for the farmers and the Cane Development staff. These efforts will produce the desired result in the form of improved recovery during the coming sugar season 2015-16.

Co-generation Division

During the period under review, your company produced 1842.64 Lakhs KWH units of power as compared to 1836.06 Lakhs units of power in the year 2013-2014 (15 Months). Out of total production, your company exported 992.49 Lakhs KWH units to UPPCL/UPCL for a total amount of Rs.4532.27 Lakhs against 955.72 Lakhs KWH for an amount of Rs. 4156.70 Lakhs in the previous year.

The company has been awarded 60012 units of REC for all the four units and these REC units are trade able and an additional source of revenue to your company. During the F.Y.14-15 Company traded 15583 units of REC for Rs.233.75 lacs.

Distillery Division

Your company has a Distillery with an installed capacity of 75 KLPD at Barkatpur (Distt. Bijnor) in State of Uttar Pradesh. During the year under review 120.42 lacs Bulk Litres (BL) of Industrial Alcohol produced as compared to 105.94 lacs Bulk Liters in the year 2013-14 (15 Months) and your company sold 90.87 lacs Bulk Liters Industrial Alcohol (including Ethanol) as compared to 108.45 lacs Bulk Litres in the previous year (15 Months).

Future Outlook

For the state of U.P., the industry have requested the State Government for fxing of cane price based on the revenue sharing of realisation from sugar and by-products. The State Government has already constituted a committee under the chairmanship of Chief Secretary of the state to submit its recommendations. Your company expects positive outcome on the same. The state of Maharashtra and Karnataka producing above 50% of country sugar production, have already implemented the Rangrajan Committee formula based on revenue sharing.

The Central Government is considering increasing the blending % of Ethanol in Petrol from 5% to 10%. This will improve the demand of Ethanol.

Industry through association is also approaching to the government regarding restructuring the accounts of the sugar companies by converting Working Capital into term loan with 2 year moratorium. This will enable the factories to clear cane arrears.

Compulsory export scheme has already been announced by the Central Government resulting in lower stock of sugar and realization will be better. It is also expected that subsidy on export of raw sugar will further be extended.

DIVIDEND

In view of the losses incurred during the financial year under review and carried forward losses, your Directors are unable to recommend any dividend.

The Dividend on Cumulative Redeemable Preference Shares (Series I - 6.5% and Series II - 10%) are being accumulated and will be paid in the year of profit.

FIXED DEPOSITS

Your Company has neither accepted nor renewed any deposit within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. There were no unclaimed deposits at the end of Financial Year i.e. 30th June, 2015.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Raj Kumar Adlakha, Managing Director (DIN 00133256) of the Company retire by rotation and being eligible, offers himself for reappointment.

During the year under review, Mr. Narendra Kumar Sawhney and Mrs. Rutuja Rajendra More have been appointed as Additional cum Independent Directors on the Board of the Company w.e.f 14th May, 2015 and 05th June, 2015 respectively.

In compliance of Section 149 of the Companies Act, 2013 it is proposed to re-appoint Dr. R. Vasudevan and Mr. G. S. Matta as Independent Directors to hold offce for a period of 5 (fve) years commencing from this Annual General Meeting upto the conclusion of Annual General Meeting to be held in calendar year 2020.

In compliance of Section 160 and 149 of the Companies Act, 2013 it is proposed to regularize Mr. Narendra Kumar Sawhney and Mrs. Rutuja Rajendra More as Independent Directors to hold offce for a period commencing from this Annual General Meeting up to the conclusion of Annual General Meeting to be held in calendar year 2019.

Brief profile of the Directors proposed to be appointed / re-appointed and their Qualification, Experience along with the name of Companies in which they hold the Directorship and Public Companies in which they hold Chairmanship/membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are given as Annexure to the Notice convening the Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 and Clause 49(III)(D)(4)(a) of the Listing Agreement with the Stock Exchange in the preparation of Annual Accounts for the year ended 30th June, 2015 and state that:

i. in the preparation of Annual Accounts for the year ended 30th June, 2015, the applicable accounting standards had been followed with proper explanation relating to material departures;

ii. we have selected appropriate accounting policies and have applied them consistently and, made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2015 and of the losses of the Company for the year ended on that date;

iii. we 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. we have prepared the annual accounts on a 'going concern' basis;

v. we have 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. we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

M/s B. K. Kapur & Co., Chartered Accountants, Ghaziabad, Statutory Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for re-appointment. M/s B. K. Kapur & Co., was appointed as Statutory Auditors in the previous Annual General Meeting for a tenure of three years, i.e. till the conclusion of 22nd Annual General Meeting to be held in the year 2017. In view of due compliance of the provisions of Section 139(1), their continuance of appointment is required to be ratified by the members of the Company in the ensuing Annual General Meeting. Therefore, your Directors recommended the ratification of appointment of M/s B. K. Kapur & Co., Chartered Accountants as Statutory Auditors in the ensuing Annual General Meeting.

The Company has received consent letters and certificate from the Auditors to the effect that their appointment, if made, shall be in accordance with the conditions as prescribed in the Companies (Audit and Auditors) Rules, 2014, and that they are not disqualified for appointment within the meaning of Section 139 and 141 of the Companies Act, 2013.

Auditors' Observations

Your Directors wish to clarify the certain observations reported by the Statutory Auditors, as under: -

a) Observation in Para 8 of annexure to the Report regarding erosion of net worth of more than 50% as on 30th June, 2015, your Directors wish to state that the Company is incurring continuous losses due to fixation of unreasonable, unaffordable and irrational State Advised Price (SAP) by the State Government over the last several years. There is no transparent basis or formula for fixing SAP. The Indian Sugar Mills Association (ISMA) has already represented to State Government to implement the long term mechanism for determination of viable sugar cane price as per the recommendations of Dr. C. Rangarajan Committee. Unless the cane price is linked to sugar price it will be impossible for the sugar industry to improve the performance.

b) Observation in Para 9 of annexure to the Report relating to delays in the repayment of installment/ interest to the Banks, there has been liquidity problems due to losses incurred by the company during the current financial year and previous financial years.

COST AUDITORS

The Board on the recommendation of the Audit Committee has re-appointed M/s M. K. Singhal & Company (Firm Regn. No. 00074), Cost Accountants, to audit the Cost Accounting records relating to Sugar, Cogeneration and Industrial Alcohol for Financial Year 2015-16.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratifed by the members of the Company. The Board recommends the same for approval of members in the ensuing Annual General Meeting.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable provisions, if any, the Company has appointed M/s N K Rastogi & Associates (Firm Regn No.3785), Practicing Company Secretaries, to do Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report for the financial year ended 30th June, 2015 is attached and marked as "Annexure-I" and forms part of the Board Reports. The observation made by the Secretarial Auditors in their report are self explanatory and therefore do not call for any further explanations/comments. The Secretarial Auditors' Report does not contain any Qualification, reservation or adverse remark.

MEETINGS

The details of Board Meetings and Audit Committee Meetings held during the period under review are given in Corporate Governance Report.

AUDIT COMMITTEE

The Company has constituted Audit Committee as per the provisions of Companies Act and Listing Agreement. The details of terms of reference of the Audit Committee, number and dates of meeting held, attendance, among others are given separately in the attached Corporate Governance Report. The Audit Committee satisfies the requirements of Section 177 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement. During the year there were no instances, where the Board had not accepted the recommendations of the Audit Committee.

EXTRACT OF ANNUAL RETURN

The extracts of the Annual Return as per the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014 is annexed herewith and marked as "Annexure-II" to this Report.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has in place a whistleblower policy to deal with unethical behavior, victimization, fraud and other grievances or concerns, if any. The aforesaid policy can be accessed on the Company's website www. uttamsugar. in and weblink of the same is http://uttamsugar. in/pdf/whistle-blower-&-vigil-mechanism.pdf.

NOMINATION & REMUNERATION COMMITTEE

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with Rules made there under, the Board has constituted a Nomination & Remuneration Committee and the details of terms of reference, number & dates of meeting held, attendance and other details are given separately in the attached Corporate Governance Report. The Board on the recommendation of Nomination & Remuneration Committee framed a policy i.e. Nomination and Remuneration Policy for selection and appointment of Directors, senior managerial personnel and their remuneration. The aforesaid policy can be accessed on the Company's website www. uttamsugar. in and weblink of the same is http://uttamsugar. in/pdf/nrc-policy.pdf.

BOARD EVALUATION

Pursuant to the provision of Company Act, 2013 and clause 49 of listing agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of its committees comprising of audit, nomination, remuneration and other committees. The detailed analysis of performance evaluation is incorporated in Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not given any loan or made any investment during the period under review in terms of section 186 of the Companies Act, 2013. However, the Company has provided guarantee in favor of IDBI Bank Ltd. for the Crop Loan given to cane growers under Corporate Tie-up Scheme, the details whereof are given in the accompanying Financial Statement under Note. No. 33.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013

There have been no materially significant related party transactions made by the Company with the promoters, key managerial personnel and/ or with any director of the Company. All related party transactions are negotiated on an arms-length basis and are in ordinary course of business. The suitable disclosure as required in AS-18 regarding Related Party transactions has been made in the notes to financial statements. The Company has formulated a policy for Related Party Transaction and placed it on Company website www.uttamsugar.in and we blink of the same is http://uttamsugar. in/pdf/ PolicyonRelated PartyTransaction.pdf.

PARTICULARS OF EMPLOYEES

The particulars of employees, as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in a separate annexure attached hereto and forms part of this Report and marked as "Annexure-III.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act, 2013, are given in a separate annexure attached hereto and forms part of this Report and marked as "Annexure-IV.

INTERNAL FINANCIAL CONTROLS

The Company has an adequate system of internal control relating to the nature of the business of the Company. A detailed note has been provided under Management Discussion and Analysis Report. The Company has an Audit Committee which ensures proper compliance with the provisions of the Listing Agreement with Stock Exchanges, Companies Act, reviews the adequacy and effectiveness of the internal control.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There were no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and Company's operations in future.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Directors confirm that during the year under review, there were no complaints received pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 read with various clarifications issued by the Ministry of Corporate Affairs, every Company having the net worth of Rs. 500 Crores or more or turnover of Rs.1000 Crores or more or net profit of Rs. 5 Crores or more during any financial year have to spend at least 2% of the average net profit of the Company made during the three immediately preceding financial years.

Therefore, a CSR Committee was constituted by the Company and details of the same are given separately in the attached Corporate Governance Report. The Committee had fnalised the CSR policy which was approved by the Board. The CSR policy of the Company can be accessed on the Company's website: www.uttamsugar.in and we blink of the same is http://uttamsugar.in/pdf/CorporateSocialResponsibiltyPolicy.pdf.

Your Company has incurred losses for the financial year 2011-12, 2013-14 and meager profit of Rs. 5.46 Crores for the financial year 2012-13. Since the aggregate of proft of previous three financial years is negative, your company is not required to spend any amount on Corporate Social Responsibility Activities.

RISK MANAGEMENT PLAN

The Company has a Risk Management plan to identify and evaluate Business Risk and opportunity of Risk Management to minimize the adverse impact on Business Objectives and enhancement the company's competitive advantage. The plan facilitates to identify the risk at appropriate time and necessary steps to be taken to mitigate the risk. The detailed risk analysis and their mitigation have already been incorporated in the Management discussions and analysis report.

SUBSIDIARY COMPANIES

The Company does not have any Subsidiary, Associate and/or any Joint Venture Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company to which this financial statement relate and on the date of this report.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with Certificate from a Practicing Company Secretary forms part of the Annual report are attached hereto and forms part of this Report and marked as "Annexure-V".

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A separate Report on Management Discussion and Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section and forms part of this Report and marked as "Annexure-VI.

INDUSTRIAL RELATIONS

Industrial relations continued to remain cordial throughout the period under review.

ACKNOWLEDGEMENT

Your Directors thank the customers, suppliers, farmers, fnancial institutions, banks and shareholders for their continued support and co-operation. Finally, your Directors acknowledge the dedicated services rendered by all the employees of the Company. By Order of the Board

for UTTAM SUGAR MILLS LTD.

Place: Noida (RAJ KUMAR ADLAKHA)

Date : 14th November, 2015 CHAIRMAN OF THE BOARD

(DIN : 00133256)


Jun 30, 2014

Dear Members,

The Directors take pleasure in presenting their Nineteenth Annual Report together with the Audited Accounts for the year ended 30th June, 2014.

FINANCIAL RESULTS

The financial results of the Company for the period/year ended on 30th June 2014 are as under: (RS. in Lacs)

Period ended Year ended

DETAILS 30.06.2014 31.03.2013 (15 months) (12 months)

Revenue from Operations 87,161.19 64,532.45

Profit/(Loss) before Depreciation, (4,998.24) 4,212.80 Tax & Prior Period Items

Less:

Depreciation 4,082.50 3,012.52

Prior period items (Net) (66.19) (37.19)

Profit/(Loss) before Tax & Exceptional Items (9,014.55) 1,237.47

Less: Provision for Taxation

Current Tax - -

Deferred Tax (Credit) / Charge (3,484.74) 691.18

Profit/(Loss) after Taxation (5,529.81) 546.29

Add: Balance brought forward from (13,940.63) (14,486.92) Previous Year

Deficit transferred to Balance Sheet (19,470.44) (13,940.63)

REVIEW OF OPERATIONS

The Financial Results for the year 2013-14 are for a period of 15 months and hence, are not comparable with the results of 2012-13 which were for a period of 12 months.

Sugar Division

Operational data of the Company for the financial year 2013-2014 and 2012-2013 are provided as under:

Financial Year Cane Crushed Sugar Produced Recovery % (In Lakhs Qtls.) (In Lakhs Qtls.)

2013-2014 216.33 19.90 920

2012-2013 219.56 20.51 9.34

*excludes 0.39 lakhs qtls of sugar of earlier seasons reprocessed.

Following are the season wise data of cane crushed and sugar produced:

Crushing Season Cane Crushed Sugar Produced Recovery % (In Lakhs qntls) (In Lakhs qntls)

2013-2014 193.94 17.40 8.97

2012-2013 238.65 22.71 952

The Company registered a gross turnover of Sugar of Rs. 76108.98 lacs for the period ended 30th June, 2014 against Rs. 58921.62 lacs for the year ended 31st March, 2013 - an increase of gross turnover of 29.17% due to extension of financial year by three months. However, there was lower sales realizations of Rs. 3183 per qlts as compared to Rs. 3219 per qtls in the last year.

During the current season, Company commenced its crushing season on 11th December 2013 about 15 days later as against last crushing season. The crushing and recovery both were lower as compare to previous year mainly due to :-

a. Damage of Cane area by heavy flood due to continuous water logging in the fields.

b. The germination of plant cane was also badly affected and the tillering percentage was less which resulted overall downfall in cane yield.

c. Due to humid condition incidence of insects and pest like spots and Pokka boeing has badly affected the cane crop, effecting both yield and recovery percentage.

Sugar: The Company''s aggregate sugar cane crushing was lower at 193.94 Lakhs qntls during the season 2013-14 as against 238.65 Lakhs qntls in 2012-13 season due to lower cane availability. The Company had a lower recovery of 8.97% as against 9.52% in previous season. The lower recovery was common phenomena in all the Sugar Mills operating in Western Uttar Pradesh.

The Uttar Pradesh Government announced a State Advised Price (SAP) for sugarcane at Rs.280 per quintal for season 2013- 14, which was the same as in previous season. SAP price of Rs.280 per quintal was unreasonable, unaffordable and irrational; most UP-based sugar companies were compelled to suspend crushing for season 2013-14 and commenced only after extensive deliberations between millers and the State Government the following consensus was arrived at:

(i) The cane price of Rs. 280 per quintal would be paid to farmers in two installments. The first installment of Rs. 260 per quintal would be paid as per normal practice and the remaining Rs.20 per quintal would be paid by the end of the season.

(ii) U.P. Government granted concessions of Rs.11.03 per quintal of cane to the millers for the season 2013-14 covering the following heads:

* Waiver of Entry Tax on sugar - Rs. 2.73 per qntl.

* Waiver of cane purchase tax - Rs.2.00 per qntl.

* Waiver of Society Commission - Rs.6.30 per qntl.

Total Rs.11.03 per qntl.

Similar exemption also provided by Uttarakhand Government for Season 2013-14.

As already mentioned in the previous year''s report your company is continuously focusing on Cane Development activities in the form of extensive replacement of old, poor and rejected varieties/ varietal improvement with new varieties and demonstrations to increase the cane yield by way of Ratoon management, Spacing Trials, Urea cum insecticidal spray on standing crop, providing pesticide to cane growers to get pest-free crop and arranging village meeting at mass level to impart technology to get higher yield. Awareness programs have been organized among the formers to educate them the modern technologies. These efforts has not produced the desired result during the sugar season 2013-14 mainly because of heavy rain and flood in the area. However, we are hopeful that concerted effort will produce the desired result in the form of improved recovery during the sugar season 2014-15.

Co-generation Division

During the period under review, your company produced 1836.06 Lakhs KWH units of power as compared to 1919.97 Lakhs units of power in the year 2012-2013. Out of total production, your company exported 955.73 Lakhs KWH units to UPPCL/UPCL for a total amount of Rs.4156.70 Lakhs against 1061.30 Lakhs KWH for an amount of Rs. 4585.31 Lakhs in the previous year.

The company has been awarded 22069 and 29189 units of REC for Khaikheri and Shermau unit respectively and these REC units are trade able and an additional source of revenue to your company. During the F.Y.13-14 Company traded 5388 units of REC for Rs.80.82 lacs.

Distillery Division

Your company has a Greenfield Distillery Project with an installed capacity of 75 KLPD at Barkatpur (Distt. Bijnor) unit in State of Uttar Pradesh. During the year under review 105.94 lacs Bulk Litres (BL) of Industrial Alcohol produced as compared to 37.47 lacs Bulk Litres in the year 2012-13 and your company sold 108.45 lacs Bulk Litres Industrial Alcohol as compared to 18.25 lacs Bulk Litres in the previous year.

Future Outlook

The sugar season 2013-14 began with significant cane arrears. Sugar millers encountered challenges in arranging necessary funds from banks for the clearance of cane dues. The sugar business incurred a loss owing to a mismatch between a high arbitrary cane price and depressed sugar realizations.

The Karnataka and Maharashtra Governments have passed enactment regarding linkage of sugar cane prices to the realization of revenue to the sale of sugar and its first stage by-products as recommended by the Rangarajan Committee. This will remove the arbitrariness in cane price fixation. It is expected that the Govt of U.P. will soon adopt a similar policy failing which the Sugar Industry in U.P. will not be viable for operation.

Central Government is considering to increase the blending % of Ethanol in Petrol from 5% to 10%. This will improve the demand of Ethanol and price of Ethanol will also improve.

DIVIDEND

In view of the losses incurred in the period under review and carried forward losses, your Directors are unable to recommend any dividend.

The Dividend on Cumulative Redeemable Preference Shares (Series I - 6.5% and Series II - 10%) are being accumulated and will be paid in the year of profit.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of the following Directors viz. Mr. G. S. Matta as Chairman, Dr. Ramasamy Vasudevan and Mr. Ashok Kumar Agarwal are Members. The Audit Committee satisfies the requirements of Section 177 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement.

DIRECTORS

During the period under review, IDBI Bank Ltd. nominated Mr. Kumar Neel Lohit as their new nominee on the Board of the Company w.e.f. 16th April, 2014 in place of Mr. Satish Chandra.

The Board of Directors has proposed to re-appoint Mr. Ashok Kumar Agarwal as Executive/Whole Time Director of the Company for a further period from 14th February, 2015 to 31st December, 2017 subject to necessary approvals, if any. The Board of Directors has also proposed to re-appoint Mr. Raj Kumar Adlakha as Managing Director of the Company for a further period commencing from 1st September, 2015 to 31st March, 2018 subject to necessary approvals, if any.

In compliance of Section 149 of the new Companies Act, 2013 it is proposed to reconfirm Dr. R. Vasudevan and Mr. G. S. Matta as Independent Directors to hold office for a period of 1 (one) year commencing from this Annual General Meeting upto the conclusion of next Annual General Meeting to be held in calendar year 2015.

DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

The Directors confirm that:-

(i) in the preparation of annual accounts, the applicable accounting standards have been followed;

(ii) we have, in the selection of the accounting policies consulted the Statutory Auditors and have applied them consistently, and, made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the losses of the Company for that period;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with Certificate from a Practising Company Secretary forms part of the Annual report are attached hereto.

The Company''s shares are listed on National Stock Exchange and Bombay Stock Exchange. The Company has already paid the Listing fees for the Financial Year 2013-14 and 2014-15 to both the Stock Exchanges.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming a part of the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT COST AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and out-go u/s 217(1)(e) of the Companies Act, 1956 are given in a separate Annexure "A" attached hereto and form a part of this Report.

EMPLOYEES

Particulars of employees as required u/s 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules 1975 and Amendment Rules, 2011 may be taken as NIL since no employee of the Company was in receipt of remuneration in terms of limits specified under said Rules.

AUDITORS

M/s B.K. Kapur & Co., Chartered Accountants, Ghaziabad Statutory Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for re-appointment.

In terms of the provisions of Section 139 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014, the Statutory Auditors (including Associate Audit Firm) can be appointed for a maximum two terms of 5 years which shall be inclusive of the existing tenure completed by such Statutory Auditors and Section 139 also provides three years period to comply with this requirement.

Since, M/s B.K. Kapur & Co., Chartered Accountants, Ghaziabad have completed more than 10 years as Statutory Auditors of the Company, it is proposed to re-appoint them for a further term of 3 consecutive years from the conclusion of the ensuing 19th Annual General Meeting to the conclusion of 22nd Annual General Meeting, subject to ratification by the shareholders at every Annual General Meeting.

The Company has received letters from the Auditors to the effect that their appointment, if made, shall be in accordance with the conditions as prescribed in the Rule 4 of the Companies (Audit and Auditors) Rules, 2014, and that they are not disqualified for appointment within the meaning of Section 139 and 141 of the Companies Act, 2013.

AUDITORS'' OBSERVATIONS

Your Directors wish to clarify the various points/observations reported by the Statutory Auditors, as under: -

a) Observation in Para 10 of annexure to the Report regarding erosion of net worth of more than 50% as on 30th June, 2014, your Directors wish to state that the Company is incurring continuous losses due to fixation of unreasonable, unaffordable and irrational State Advised Price (SAP) by the State Government over the last several years. There is no transparent basis or formula for fixing SAP. The Indian Sugar Mills Association (ISMA) has already represented to State Government to implement the long term mechanism for determination of viable sugar cane price as per the recommendations of Dr. C. Rangarajan Committee. Unless the cane price is linked to sugar price it will be impossible for the sugar industry to improve the performance.

Your Directors wish to state that erosion of net worth is less than 50% at the end of the financial year viz. 30th June, 2014 considering the peak Net Worth during immediate preceding four financial years as per the provisions of Section 23 of The Sick Industrial Companies (Special Provision) Act, 1985.

b) Observation in Para 11 of annexure to the Report relating to delays in the repayment of installment/ interest to the Banks, there has been liquidity problems due to losses incurred by the company during the current financial year and previous financial years.

c) Observation in Para 17 of the annexure to the Report that short term funds have been used for repayment of loans and financing of loses, your Directors wish to clarify that this is mainly due to cash losses incurred by the Company during the current financial year and previous financial years and consequent liquidity problems.

COST AUDIT

M/s M.K. Singhal & Company, Cost Accountants who were appointed as Cost Auditors for the year ended 31st March, 2013 have filed the Cost Audit Reports (for Sugar, Co-generation and Industrial Alcohol products) on 28.09.2013 to the Government in XBRL Mode as mandated by the Ministry of Corporate Affairs vide general circular No. 8/2012 dated 10th May, 2012. For the Financial Year 2013-14, Cost Auditors will submit the Cost Audit Reports (for Sugar, Co-generation and Industrial Alcohol products) with the Government within the stipulated time.

The Board, on the recommendation of the Audit Committee, has re-appointed M/s M. K. Singhal & Company, Cost Accountants, to audit the Cost Accounting records relating to Sugar, Cogeneration and Industrial Alcohol for Financial Year 2014-2015.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the members of the Company. The Board recommends the same for approval of members in the ensuing Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In compliance of provision of section 135 of the new Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted with the following members:-

a) Mr. Raj Kumar Adlakha - Chairman

b) Mr. Ashok Kr. Agarwal - Member

c) Mr. G.S. Matta - Member

d) Mr. G. Ramarathnam - Secretary

INDUSTRIAL RELATIONS

Industrial relations continued to remain cordial throughout the period under review.

PUBLIC DEPOSITS

The Company has not accepted any public deposits during the period under review.

ACKNOWLEDGEMENT

Your Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and co-operation. Finally, your Directors acknowledge the dedicated services rendered by all the employees of the Company.

By Order of the Board for UTTAM SUGAR MILLS LTD.

Place: Noida (RAJ KUMAR ADLAKHA) Date : 12th November, 2014 Chairman of the Board (DIN: 00133256) (R/o: KD-51, Kavi Nagar, Ghaziabad)


Mar 31, 2013

The Shareholders of the Company,

The Directors take pleasure in presenting their Eighteenth Annual Report together with the Audited Accounts for the year ended 31 st March 2013.

FINANCIAL RESULTS

The financial results of the Company for the year ended on 31st March 2013 are as under.-

(Rs. in Lacs) DETAILS Year ended Year ended 31.03.2013 31.03.2012

Revenue from Operations 64,532.45 68,289.66

Profit/(Loss) before Depreciation, Tax & Exceptional Items 4,212.80 (4,327.54)

Less:

Depreciation 3,012.52 2,736.77

Prior period items (Net) (37.19) 11.55

Profit/(Loss) before Tax & Exceptional Items 1,237.47 (7,075.86)

Exceptional Items (2,067.46)

Less; Provision for Taxation

Current Tax 2.95

Deferred Tax (Credit) / Charge 691.18 (2,206.44)

Income Tax for Earlier Years 19.82

Profit/(Loss) after Taxation 546.29 (6,959.66)

Add: Balance brought forward from Previous Year (14,486.92) (7,527.26)

Deficit transferred to Balance Sheet (13,940.63) (14,486.92)

REVIEW OF OPERATIONS SUGAR DIVISION

Operational data of the Company for the financial year 2012-2013 and 2011 -2012 are provided as under:

Financial Year Cane Crushed Sugar Produced Recovery % (in lacs qtls) (in lacs qtis)

2012-13 219.56 20.51* 9.34

2011-12 220.67 19.94" 9.04

*excludes 0.39 Lakhs qtls of sugar of earlier seasons reprocessed. ** excludes 0.043 Lakhs qtls of processed raw sugar.

The production of molasses during 2012-13 was 10.60 Lakhs quintals as compared to 11.25 Lakhs quintals produced during the previous year viz. 2011-2012.

During the current season, Company commenced its crushing season on 28th November 2012 about 18 days later as against last crushing season thereby crushing the matured cane which also partly contributed to the enhanced recovery.

As already mentioned in the previous year''s report your company has started focused attention on Cane Development activities in the form of replacement of old, poor and rejected varieties with new varieties and demonstrations to increase the cane yield by way of Ratoon management, Spacing Trials, Urea cum insecticidal spray on standing crop, providing pesticide to cane growers to get pest-free crop and arranging village meeting at mass level to impart technology to get higher yield. This concerted effort has produced the desired result in the form of improved recovery during the sugar season 2012-13 compared to previous year. Following are the season wise data of cane crushed and sugar produced:

Crushing Season Cane Crushed Sugar Produced Recovery % (in lacs qtls) (in lacs qtls)

2012-13 238.65 22.71 9.52

2011-12 211.32 18.83 8.91

The Uttar Pradesh Government increased State Advised Price (SAP) of sugar cane by Rs. 40 per Qtl. across varieties. The revised SAP was Rs. 280/ 290 per qtl. for normal and early varieties respectively for the crushing season 2012-13 as against Rs. 240/250 per qtl. for sugar season viz. 2011 -12 for general / early variety respectively. This increase comes to almost about 17% for the sugar season 2012-13 vis-a-vis sugar season 2011-12. Further, in the last 3 years cane prices have gone up by 70% from Rs. 165/- per qtl. to Rs. 280/- per qtl. while there has not been any corresponding increase in the sugar prices. The Uttarakhand State Government also announced the similar hike of Rs. 45 per qtl. of State Advised Price (SAP) for the sugar season 2012-13 which works out to Rs. 285/290 per qtls. as against Rs. 240/245 per qtls. for the sugar season 2011-12 for the general and early varieties respectively. There is no logic for such a steep increase in the cane price.

CO-GENERATION DIVISION

During the year under review, your company produced 1919.97 Lakhs KWH units of power as compared to 1467.79 Lakhs units of power in the year 2011 -2012. Out of total production, your company exported 1061.30 Lakhs KWH units to UPPCL/ UPCL for a total amount of Rs. 4585.31 Lakhs against 642.53 Lakhs KWH for an amount of Rs. 2693.73 Lakhs in the previous year.

The Company has got registration under Renewal Energy Certificate (REC) mechanism for sugar plants situated at Libberhen (Distt.-Haridwar), Khaikheri (Distt.-Muzaffamagar) and Shermau (Distt. Saharanpur). The company has been awarded 18866 units of REC for Libberheri unit and these REC units are tradeable and an additional source of revenue to your company.

DISTILLERY DIVISION

As reported last year, your company has successfully commissioned its new Greenfield Distillery Project with an installed capacity of 75 KLPD at Barkatpur (Distt. Bijnor) unit in the State of Uttar Pradesh. During the year under review 37.47 iacs Bulk Litres (BL) of Industrial Alcohol was produced and 18.25 lacs Bulk Litres Industrial Alcohol was sold.

FUTURE OUTLOOK

The Government''s decision on partial decontrol of sugar industry is welcome and it comes at the right time. One of the most positive steps in the decontrol process for both farmers and the industry is the removal of 10% Levy Sugar which deals with the supply of sugar by the sugar industry to the Public Distribution System (PDS). Levy sugar for the PDS will now be procured by State Government from the open market and at prevailing market prices. The next important decision towards deregulation has been the removal of regulated release mechanism for non-levy sugar (free sale sugar), which has been abolished with immediate effect. The regulated release mechanism would dictate to sugar factories on how much sugar they could sell in the open market on a monthly basis. Sugar factories could not sell over or below the quantity stipulated by the Government. Now, each factory can sell how much it likes in the open market, depending upon the open market prices and their cash flow needs.

India has tremendous renewable energy potential and the demand for Biomass based green power sector is likely to grow in a big way. Thus with an increase in cane crushing and increase in bagasse availability our co-generation can optimize power generation and contribute to our profitability.

The Distillery unit is planning to enter into contract with Oil Marketing Companies (OMC) for supply of ethanol. With the commissioning of the Distillery unit your company sees a good potential in the ethanol production. By maintaining a proper product mix of alcohol for sale to potable, the industrial and blending sector, your company would strive to derive the optimum realization. Overall, with the outlook remaining positive, your company is committed to bettering the performance in future and confident of improving the profitability.

DIVIDEND

In view of inadequacy of profits during the current financial year and carried forward losses, your Directors are unable to recommend any dividend for the year under review.

The Dividend on Cumulative Redeemable Preference Shares (Series I - 6.5% and Series II -10%) are being accumulated and will be paid in the year of profit.

AUDIT COMMITTEE

The Board of Directors has re-constituted the Audit Committee of the Company on 09th February, 2013 comprises of the following Directors viz. Mr. G. S. Matta as Chairman, Dr. Ramasamy Vasudevan and Mr. Ashok Kumar Agarwal are Members. The Audit Committee satisfies the requirements of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with the Stock Exchanges.

RIGHTS ISSUE

Your company has successfully completed Rights Issue of 1,23,69,120 Equity Shares of Rs. 10/- at a premium of Rs. 121- per Equity Shares (i.e. an issue price of Rs.22/- per Equity Share) aggregating to Rs.27,21,20,640/- to the existing shareholders of the company on rights basis. Accordingly, Equity Shares were allotted to eligible Shareholders, in consultation with the NSE (designated Stock Exchange) on October 27, 2012. These shares are listed and available for trading at NSE and BSE effective from 5th November, 2012.

Consequent to allotment of the aforesaid shares, the Paid-up Equity Share Capital of the Company stands increased from Rs. 2576.90 Lacs to Rs. 3813.812 Lacs w.e.f. October 27, 2012. The proceeds of the Rights Issue have been fully utilized as per the objects of Issue mentioned in the Letter of Offer.

COMPLIANCE OF CLAUSE 40A - MINIMUM LEVEL OF PUBLIC SHAREHOLDING

Your Company has already complied with Clause 40A of the Listing Agreement i.e. at present Public Shareholding is 25% of the Paid-up Equity Share Capital.

DIRECTORS

Dr. Ramasamy Vasudevan, Director of the Company is retiring by rotation at this forthcoming Annual General Meeting of the Company and is eligible for re-appointment. As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Dr. Ramasamy Vasudevan are provided in the Notice of ensuing Annual General Meeting.

As per CDR terms and conditions, Punjab National Bank is authorized to nominate Director on the Board of our Company. During the Financial Year 2011-12, PNB had nominated Mr. Kamal Prasad as Nominee Director w.e.f. 27.05.2011. Consequent upon reconstitution of Punjab National Bank''s Circles, Mohan Nagar Branch Ghaziabad has been shifted from the jurisdiction of Meerut to jurisdiction of NCR Noida Branch. Accordingly, Mr. Bikash Narayan Mishra, Circle Head, NCR, Noida has been nominated in place of Mr. Kamal Prasad (Circle Head, Punjab National Bank, Meerut). He has been appointed as a Nominee Director on the Board of our Company w.e.f. 10.11.2012 as an Additional cum Nominee Director under the provisions of Section 260 of the Companies Act, 1956. He holds office till this Annual General Meeting. A notice u/s 257 of the Companies Act, 1956 along with a deposit of Rs. 500/- has been received from a member of the Company proposing the candidature of Mr. Bikash Narayan Mishra as Director cum Nominee Director on the Board of the Company.

Mr. Vikram Singh Tandon ceased to be a Director of the Company w.e.f. 22nd December, 2012 consequent to resignation. The Board places on record its appreciation for the services rendered by him during his tenure.

DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217{2AA) OF THE COMPANIES ACT, 1956

The Directors confirm that:-

(i) in the preparation of annual accounts, the applicable accounting standards have been followed;

(ii) we have, in the selection of the accounting policies consulted the Statutory Auditors and have applied them consistently, and, made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

(iii) proper and sufficient care has Deen taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with Certificate from a Practising Company Secretary forms part of the Annual report.

The Company''s shares are listed on National Stock Exchange and Bombay Stock Exchange. The Company has already paid the Listing fees for the Financial Year 2012-13 and 2013-14 to both the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT COST AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and out-go u/s 217(1 )(e) of the Companies Act, 1956 are given in a separate Annexure "A" attached hereto and form a part of this Report.

EMPLOYEES

Particulars of employees as required u/s 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules 1975 and Amendment Rules, 2011 may be taken as NIL since no employee of the Company was in receipt of remuneration in terms of limits specified under said Rules.

AUDITORS

M/s B.K. Kapur & Co., Chartered Accountants, Ghaziabad Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from Auditors to the effect that their appointment if made, would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956.

AUDITORS'' OBSERVATIONS

Your Directors wish to clarify the various points/observations reported by the Statutory Auditors, as under: -

a) Observation in Para 11 of annexure to the Report relating to delays in the repayment of installment/ interest to the Banks, there has been liquidity problems due to losses incurred by the company during the previous financial years coupled with inadequate cash generation during the current financial year.

b) Observation in Para 17 of the annexure to the Report that short term funds have been used for repayment of loans and financing of loses, your Directors wish to clarify that this is mainly due to cash losses incurred by the Company during the previous financial years coupled with inadequate cash generation and consequent liquidity problems.

COST AUDIT

M/s M.K. Singhal & Company, Cost Accountants who were appointed as Cost Auditors for the year ended 31 st March, 2012 have filed the following Cost Audit Reports to the Government.

S. No. Product Due date of filing Actual date of filing cost audit report cost audit report

1. Sugar 28.02.2013* 13.02.2013

2. Cogeneration 28.02.2013* 13.02.2013

* The due date for filing Cost Audit Report was extended upto 28.02.2013 by the Ministry of Corporate Affairs vide its General Circular No. 2/2013 dated 31.01.2013.

Your Board of Directors have re-appointed M/s M. K. Singhal & Company, Cost Accountants, to audit the cost accounting records relating to Sugar, Cogeneration and industrial alcohol for Financial Year 2013-2014.

INDUSTRIAL RELATIONS

Industrial relations continued to remain cordial throughout the period under review.

PUBLIC DEPOSITS

The Company has not accepted any public deposits during the period under review.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205C of the Companies Act, 1956 an amount of Rs. 46,300/- being unclaimed Share Application Money relating to Initial Public Offer (I.P.O.) was transferred to the Investor Education and Protection Fund on 11.04.2013 established by the Central Government.

ACKNOWLEDGEMENT

Your Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognize the contribution made by the employees to the Company''s progress during the year under review.

By Order of the Board

for UTTAM SUGAR MILLS LTD.

Place: Noida (RAJ KUMAR ADLAKHA)

Date : 18lh May, 2013 Chairman of the Board


Mar 31, 2012

The Directors take pleasure in presenting their Seventeenth Annual Report together with the Audited Accounts for the year ended 31st March 2012.

FINANCIAL RESULTS

The financial results of the Company for the year ended on 31st March 2012 are as under:-

(Rs. in Lacs)

DETAILS Year ended Year ended 31.03.2012 31.03.2011

Revenue from Operations 68,289.66 68,579.13

Profit/(Loss) before Depreciation, Tax & Exceptional Items (4,327.54) 2,018.54

Less:

Depreciation 2,736.77 2,697.21

Prior period items (Net) 11.55 61.00

Profit/(Loss) before Tax & Exceptional Items (7,075.86) (739.67)

Exceptional Items (2,067.46) -

Less: Provision for Taxation

Current Tax 2.95 1.28

Deferred Tax (Credit) / Charge (2,206.44) 716.73

Income Tax for Earlier Years 19.82 -

Profit/(Loss) after Taxation (6,959.66) (1,457.68)

Add: Balance brought forward from Previous Year (7,527.26) (6,069.58)

Deficit transferred to Balance Sheet (14,486.92) (7,527.26)

REVIEW OF OPERATIONS

Operational data of the Company for the financial year 2011-12 and 2010-11 are provided as under :-

Financial Year Cane Crushed Sugar Produced Recovery % (in lacs qtls) (in lacs qtls)

2011-12 220.67 19.94* 9.04

2010-11 200.22 18.78** 9.38

* excluding 0.043 lacs qtls of processed raw sugar.

** excluding 1.69 lacs qtls of processed raw sugar.

The production of molasses during 2011-12 was 11.25 lacs quintals as compared to 10.42 lacs quintals produced in 2010-11. Your Company produced 1467.79 lacs KWH units of power as compared to 1317.68 lacs KWH units of power in the year 2010-11. Out of total production, your company exported 642.53 lacs KWH units to UPPCL/UPCL for a total amount of Rs. 2693.73 lacs against 519.26 Lacs KWH for an amount of Rs. 2086.68 lacs.

The operations were adversely affected because State administration forced to start the mills early than usual. The crushing season is usually from end-November to mid-March extending latest till the 1st week of April. The State Administration wanted farmers to start en-cashing their crops (as the Assembly election momentum picked-up) and this has led to a lower amount of sugar being extracted from cane. Besides, overall recovery percentage was also lower for season 2011-12 compared to previous season 2010-11. U.P. State announced a hike in the Sugar Cane Price (SAP) for the current crushing season by Rs. 40 per quintal. In the crushing season 2010-11 the State Government has fixed SAP at Rs. 205 per quintal for regular and Rs. 210 per quintal for early maturing variety. The SAP price of Rs. 240 per quintal for sugar season 2011-12 was substantially higher than Central Government's FRP of Rs. 145 per quintal of cane. The SAP is a blow to the millers in U.P. who are already making a loss of almost Rs. 2-3 per kg due to higher cost of production of sugar. Uttarakhand Government also follow U.P. State policy relating to cane pricing. Another reason for adverse performance is volatility in the sugar price affecting value addition.

Consequent to Hon'ble Supreme Court order in January, 2012 there was an additional liability relating to sugar cane purchase for the season 2007-08 to the extent of Rs. 20.67 Crores which has been accounted for as an exceptional item during the year.

Further, there has been a delay in the start of co-gen and export of power in Barkatpur Factory, which is the 4th factory where co-gen and export of power was yet to commence. The delay in start-up of co-gen and export of power resulted significant loss of revenue. However, the co-gen finally was put to use on 1st April, 2012 and power export commenced thereafter.

Your Company is planning to focus on cane development during the ensuing period with a view to improve the cane availability and recovery. Besides, the Distillery plant at Barkatpur factory with capacity of 75 KLPD is ready and trial run has been started. The performance of the company in the next Sugar Season is expected to improve considerably with the start of power export from Barkatpur factory coupled with commencement of operation of Distillery Unit.

DIVIDEND

In the absence of profits during the current financial year and carried forward loss your Directors are unable to recommend any dividend for the year under review.

AUDIT COMMITTEE

The Audit Committee of the Company comprises the following Directors viz. Mr. V. S.Tandon as Chairman, Dr. R. Vasudevan, Mr. G.S. Matta and Mr. Ashok Kumar Agarwal are Members. The Audit Committee satisfies the requirements of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with the Stock Exchanges.

RIGHTS ISSUE

Board has approved the proposal for Rights Issue for a total amount not exceeding Rs. 27.50 Crores for part financing Capital Contribution margin for additional working capital as per CDR Package. This is being actively pursued and SEBI approval is expected very shortly.

INCREASE IN AUTHORIZED SHARE CAPITAL

Your Board of Directors proposes to increase the Authorized Share Capital from Rs. 115 crores to Rs.160 crores by creation of Two Crores Equity Shares of Rs.10/- each and 25 Lacs Redeemable Preference Shares of Rs.100/- each for which resolution has been proposed in the notice.

DIRECTORS

Mr. Vikram Singh Tandon and Mr. Gurbachan Singh Matta, Directors of the Company are retiring by rotation at this forthcoming Annual General Meeting of the Company and are eligible for re-appointment.

Mr. Ashok Kumar Agarwal was appointed as an Additional cum Whole-Time Director/Executive Director of the Company during the year under review and holds office till the forthcoming Annual General Meeting. However, the Company has received a notice under section 257 of the Companies Act, 1956 from a Shareholder proposing his candidature for the office of Director. A resolution is being placed before the members for approval.

The Board of Directors have proposed to re-appoint Mr. Raj Kumar Adlakha as Managing Director of the Company for a further period of three years from 1st September, 2012 to 31st August, 2015 subject to necessary approvals. A resolution is being placed before the members for approval.

Mr. Rajan Adlakha and Mr. Ranjan Adlakha, Directors of the Company have resigned from the Directorship of the Company during the year under review. The Board places on record its deep appreciation for the services rendered and valuable guidance provided by them during their tenure.

Mr. Pasha Biswas, Whole Time Director of the Company resigned from the Directorship of the Company and the same has been accepted by the Board of Directors in its meeting held on 30th May, 2012 and consequently he ceases to be a Director w.e.f. 30th May, 2012. The Board places on record its appreciation for the services rendered by him during his tenure.

DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

The Directors confirm that:-

(i) in the preparation of annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies consulted the Statutory Auditors and have applied them consistently, and, made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the losses of the Company for that period;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with Certificate from a Practising Company Secretary forms part of the Annual report.

The Company's shares are listed on National Stock Exchange and Bombay Stock Exchange. The Company has already paid the Listing fees for the Financial Year 2011-12 and 2012-13 to both the Stock Exchanges.

CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT COST AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and out-go u/s 217(1 )(e) of the Companies Act, 1956 are given in a separate Annexure "A" attached hereto and form a part of this Report.

EMPLOYEES

Particulars of employees as required u/s 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules 1975 and Amendment Rules, 2011 may be taken as NIL since no employee of the Company was in receipt of remuneration in terms of limits specified under said Rules.

AUDITORS

M/s B.K. Kapur & Co., Chartered Accountants, Ghaziabad Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from Auditors to the effect that their appointment if made, would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956.

AUDITORS' OBSERVATIONS

Your Directors wish to clarify the various points/observations reported by the Statutory Auditors, as under: -

a) Observation in Para 4 of the main Audit Report regarding recognition of Deferred Tax credit of Rs. 22.06 Crores, it is clarified that there is a virtual certainty that sufficient future taxable income will be available against which these assets would be realized.

b) Observation in Para 10 of annexure to the Report regarding erosion of net worth of more than 50% as on 31st March, 2012, your Directors wish to state that your company is coming out with the Rights Issue for an amount not exceeding Rs. 27.50 Crores very shortly and this will help in improving the net worth of the company.

Your Directors have obtained a Legal Opinion wherein we have been advised that erosion of net worth is less than 50% at the end of the financial year viz. 31st March, 2012 considering the peak Net Worth during immediate preceding four financial years as per the provisions of Section 23 of The Sick Industrial Companies (Special Provision) Act, 1985.

c) Observation in Para 11 of annexure to the report relating to delays in the repayment of installment/ interest to the Banks, there has been liquidity problems due to losses incurred by the company during the previous financial years. However, the Company has since paid all the Bank dues.

d) Observation in Para 17 of the annexure to the Report that short term funds have been used for repayment of loans and financing of loses, your Directors wish to clarify that this is primarily due to cash losses incurred by the Company during the financial year and consequent liquidity problems.

COST AUDIT

Your Board of Directors has re-appointed M/s M. K. Singhal & Company, Cost Accountants, to audit the cost accounting records relating to Sugar Units for financial year 2012-2013.

INDUSTRIAL RELATIONS

Industrial relations continued to remain cordial throughout the period under review.

PUBLIC DEPOSITS

The Company has not accepted any public deposits during the period under review.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the support received from the Shareholders, Government Authorities, IDBI Bank Ltd., Indian Overseas Bank, Punjab National Bank, State Bank of India, Oriental Bank of Commerce, customers, vendors and cane growers for their support and co-operation. Finally, your Directors acknowledge the dedicated services rendered by all the employees of the Company.

By Order of the Board

for UTTAM SUGAR MILLS LTD.

Place: Noida (RAJ KUMAR ADLAKHA)

Date : 11th August, 2012 Chairman of the Board


Mar 31, 2011

The Shareholders of the Company,

The Directors take pleasure in presenting their Sixteenth Annual Report together with the audited accounts for the period ended 31st March 2011.

FINANCIAL RESULTS

The financial results of the Company for the period ended on 31st March 2011 are as unden: ( Rs. in Lacs)

Year ended Period ended Details 31.03.2011 31.03.2010 (12 Months) (15 Months)

Net Sales 68,156.41 49,169.31

Profit/ (Loss) before Depreciation and Tax 2,018.54 (1,021.66)

Less:

Depreciation 2,697.21 3,182.44

Prior period items (Net) 61.00 60.51

Profit/ (Loss) before Tax (739.67) (4,264.61)

Less: Provision for taxation

Current Tax 1.28 6.49

MAT credit - (4.38)

Deferred Tax (Credit) / Charge 716.73 136.33

Fringe Benefit Tax - 3.94

Profit/ (Loss) after taxation (1,457.68) (4,406.99)

Add: Balance brought forward from Previous Year (6,069.58) (1,662.59)

Deficit transferred to Balance Sheet (7,527.26) (6,069.58)

REVIEW OF OPERATIONS

The financial results for the year 2010-11 are for a period of 12 months compared to previous year period of 15 months. During the period under review, your Company crushed 200.22 lacs quintals of sugarcane and produced 20.47 lacs quintals of Sugar (including raw sugar processed) at an average recovery rate of 9.38% as compared to 252.51 lacs quintals of sugarcane crushed and 24.34 lacs quintals of sugar (including raw sugar processed) produced at an average recovery rate of 9.41% in 2009-10. The production of molasses during 2010-11 was 10.42 lacs quintals as compared to 13.01 lacs quintals produced in 2009-10.

Your Company produced 1317.68 lacs KWH units of power as compared to 1246.47 lacs KWH units of power in the year 2009-10. Out of total production, your company exported 519.26 lacs KWH units to UPPCL/UPCL for a total amount of Rs. 2086.68 lacs against 316.79 Lacs KWH for amount of Rs. 1176.94 lacs.

DIVIDEND

In the absence of profits during the current financial year, your Directors are unable to recommend any dividend for the period under review.

SUGAR SCENARIO

During Sugar Season 2010-11, sugarcane supply increased on account of expansion of cane acreage by more than 20% owing to government's favourable pricing policies by way of upward revision in both State Advised Price (SAP) as well as Fair & Remunerative Price (FRP). In Sugar Season 2009-10, on account of short supply of cane, mill owners generally paid premium ranging about Rs. 85-100/quintal over SAP of about Rs. 165/ quintal; however, in Sugar Season 2010-11, on the back of increased sugarcane supply, the mill owners have been paying as per SAP ranging about Rs. 205-210/quintal.

The sugar price recovered during the quarter ending December, 2010 to about Rs. 28- 29/Kg from a low of Rs. 25/Kg in August, 2010 due to the improved demand scenario on account of festive season along-with various government measures

like reinstating levy sugar quota back to the earlier level of 10% (from 20%) and reproduction of monthly release system from fortnightly system. Despite increase in sugar production, the price is expected to be steady around Rs. 28-29/Kg level in the next two quarters on the back of stable stock position.

On the export front, delay in notification of exports, allowed by the government aggregating 5 lakh tonne, and allowance of further exports may lead to sugar exports becoming an unattractive proposition to the domestic sugar mills fetching them only marginal profits due to softening of global prices on the back of expected arrival of sugar supply from Brazil in the international market.

AUDIT COMMITTEE

The Audit Committee of the Company comprises the following Directors viz. Mr. V. S. Tandon as Chairman, Dr. R. Vasudevan, Mr. G.S. Matta and Mr. Ranjan Adlakha are Members. The Audit Committee satisfy the requirements of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with the Stock Exchanges.

ISSUE OF FURTHER CAPITAL

During the period under review, the Company has allotted the following Preference Shares to entities forming part of Promoter group:

(a) Under Preference Shares (Series-I) - 8,40,000 6.50% Preference Shares of Rs.100/- each at par.

(b) Under Preference Shares (Series-ll) - 18,42,500 10% Preference Shares of Rs.100/- each at a premium of Rs.100/- per share.

Consequent upon the above allotment, the present Preference Share paid up Capital of the Company is Rs. 68,42,50,000/-

RIGHTS ISSUE

SEBI approval for the Rights Issue was received by the Company on 08.12.2010. As per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, the issue should be opened within one year from the date of issuance of SEBI Observation letter (23.12.2009). Accordingly the issue should be opened before 23rd of December, 2010 and atleast 4 weeks time is required to complete the Statutory compliances. Hence, the proposed Rights Issue could not materialize. However, to meet the urgent financial requirements Preference Shares were issued and allotted to the promoter group entities.

DIRECTORS

Mr. Ranjan Adlakha and Mr. Ramaswamy Vasudevan, Directors of the Company are retiring by rotation at this forthcoming Annual General Meeting of the Company and are eligible for re-appointment.

In terms of CDR package, PNB had nominated Mr. Krishan Gopal Sharma as Nominee Director w.e.f.15.04.2010. Conse- quent upon retirement of Mr. K.G. Sharma from Bank services, PNB has nominated Mr. Kamal Prasad (Circle Head, Punjab National Bank, Meerut) in place of Mr. Krishan Gopal Sharma. Mr. Kamal Prasad has been appointed as Nominee cum Additional Director w.e.f. 27.05.2011 on the Board of the Company and will hold office upto the date of ensuing Annual General Meeting. However, the Company has received requisite notices u/s 257 of the Companies Act, 1956 from one Shareholder proposing their candidature for the office of Director.

The Board of Directors have proposed to re-appoint Mr. Pasha Biswas as Whole-Time Director of the Company for a further period of three years w.e.f. 31st October, 2011 subject to necessary approvals. A resolution to this effect is being placed before the members for approval.

During the year under review, Mr. Prabhkaran Singh Lalli, Director of the Company has resigned from Directorship of the Company w.e.f. 18.02.2011. The Board places on record its appreciation for the services rendered and valuable guidance provided by him during his tenure.

DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

The Directors confirm that:-

(i) in the preparation of annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies consulted the Statutory Auditors and have applied them consistently, and, made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the losses of the Company for that period;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with Certificate from a Practising Company Secretary forms part of the Annual report.

The Company's shares are listed on National Stock Exchange and Bombay Stock Exchange. The Company has already paid the Listing fees for the Financial Year 2010-11 and 2011-12 to both the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT COST AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and out-go u/s 217(1 )(e) of the Companies Act, 1956 are given in a separate Annexure "A" attached hereto and form a part of this Report.

EMPLOYEES

Particulars of employees as required u/s 217(2A) of the Companies Act,1956 read with Companies (Particular of Employees) Rules 1975 and Amendment Rules, 2011 may be taken as NIL since no employee of the Company was in receipt of remuneration in terms of limits specified under said Rules.

AUDITORS

M/s B.K. Kapur & Co., Chartered Accountants, Ghaziabad Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from Auditors to the effect that their appointment if made, would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956.

AUDITORS' OBSERVATIONS

Your Directors wish to clarify the various points/observations reported by the Statutory Auditors, as under: -

a) Observation in Para 9(a) of annexure to report on statutory dues of Income Tax outstanding, it is clarified that the liability arose consequent to retrospective amendment relating to MAT provisions of Income Tax Act, 1961. During the previous financial years viz. 2006-07, 2007-08 and 2009-10, the Company incurred cash losses. Although in the last Financial Year 2010-11 the company has earned cash profit but it was not sufficient to meet out all financial needs of the Company. However, the company will clear this outstanding dues at the earliest.

b) Observation in para 11 of annexure to the report relating to delays in the repayment of installment/ interest to the Banks, there has been liquidity problems due to losses incurred by the company during the previous financial years as ex- plained under point (a) above, which resulted in the delays. However, the Company has since paid all the Bank dues.

c) Observation in para 17 of the annexure to the report that short term funds have been used for long term investment viz. capital expenditure and repayment of loans, these are temporary phenomenon due to losses incurred by the company during the previous financial years as explained under point (a) above.

COST AUDIT

Your Board of Directors has appointed M/s M. K. Singhal & Company, Cost Accountants, to audit the cost accounting records relating to Sugar Units for financial year 2011-2012.

INDUSTRIAL RELATIONS

Industrial relations continued to remain cordial throughout the period under review.

PUBLIC DEPOSITS

The Company has not accepted any public deposits during the period under review.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the support received from the Shareholders, Government Authorities, IDBI Bank Ltd., Indian Overseas Bank, Punjab National Bank, State Bank of India, Oriental Bank of Commerce, customers, vendors and cane growers for their support and co-operation. Finally, your Directors acknowledge the dedicated services rendered by all the employees of the Company.

By Order of the Board

for UTTAM SUGAR MILLS LTD.

Place: Noida (RAJ KUMAR ADLAKHA)

Date : 23rd June, 2011 Chairman of the Board

 
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