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
Mar 31, 2010
The Directors take pleasure in presenting their Fifteenth Annual
Report together with the audited accounts for the period ended 31st
March 2010.
FINANCIAL RESULTS
The financial results of the Company for the period ended on 31st March
2010 are as unden- (Rs. in Lacs)
1 Period ended
Details 31.03.2010 31.12.2008
(15 Months) (15 Months)
Net Sales 49,169.31 37,508.21
Profit/(Loss) before
Depreciation and Tax (1,021.66) (786.09)
Less:
Depreciation 3,182.44 2,962.27
Prior period items (Net) 60.51 5.11
Exceptional Items - 2,556.51
Profit/ (Loss) before Tax (4,264.61) (6,309.98)
Less: Provision for taxation
Current Tax 6.49 167.07
MAT credit (4.38) (137.27)
Deferred Tax (Credit) / Charge 136.33 (1,999.35)
Fringe Benefit Tax 3.94 35.31
Profit/ (Loss) after taxation (4,406.99) (4,375.74)
Add: Balance brought forward
from Previous Year (1,662.59) 2,713.15
Deficit transferred to Balance Sheet (6,069.58) (1,662.59)
REVIEW OF OPERATIONS
The financial results for the year 2009-10 and for the year 2007-08 are
for a period of 15 months. During the period under review, your Company
crushed 252.51 lacs quintals of sugarcane and produced 24.34 lacs
quintals of Sugar at an average recovery rate of 9.64% as compared to
260.82 lacs quintals of sugarcane crushed and 24.87 lacs quintals of
sugar produced at an average recovery rate of 9.54% in 2007-08. The
production of molasses during 2009-10 was 13.01 lacs quintals as
compared to 11.92 lacs quintals produced in 2007-08.
Your Company produced 1246.47 lacs KWH units of power. Out of total
production your company exported 316.79 lacs KWH units to UPPCLAJPCL
for a total amount of Rs. 1176.94 lacs.
CORPORATE DEBT RESTRUCTURING
As already mentioned in the last Annual Report, your company had
approached the Banks for re-scheduling/ re-structuring of loans on
account of losses suffered during the previous years. The
re-structuring proposal under CDR Mechanism was referred to CDR
Empowered Group and the same was approved. The restructuring package
has been given effect in accordance with the approvals / sanctions
received.
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
Sugarcane and sugar production in India follow a 6 to 8 year cycle,
wherein 3 to 4 years of higher production are followed by 2 to 3 years
of lower production.
In the current season due to lower availability of cane, sugar
factories had to pay farmers substantially higher price of more than
Rs. 250 per quintal à higher than the fair and remunerative price (FRP)
of Rs. 129.80 per quintal and the state- administered price (SAP) of Rs
165 per quintal. Last year, the Government of India announced a new
system of fair and remunerative Price (FRP) that would link the
sugarcane prices with sugar price realization by the sugar mills.
However, this was not accepted by the State Government which fixed
their own SAP which was more than MSP/FRP due to political compulsions
rather than market considerations. However, high sugar prices coupled
with fears of lower cane crop compelled the sugar mill to pay much
higher prices than the FRP or SAP. Although the sugar industry have
been advocating for rationalization of cane pricing policy by linking
it with domestic sugar prices, there is unlikely to be any action due
to political compulsions.
On February 17, 2009, the Central Government relaxed the norms for duty
free imports of raw sugar under the Advance Licensing Scheme (ALS)
exempting future export commitments from actual user conditions for raw
sugar imports during February 17, 2009 to September 30, 2009. However,
on April 17, 2009, the Central Government allowed mills to import raw
sugar at zero duty under the OGL. The Central Government also allowed
select State Trading Enterprises (STEs) to import white sugar at zero
duty. Subsequently, on July 31, 2009, the government further allowed
duty free imports of white sugar by traders and processors till
November 30, 2009. Through a series of notifications the Government of
India extended the duty free imports of raw sugar and white sugar up to
December 31, 2010. The Government of India has also exempted imported
sugar both raw sugar and white sugar from the levy sugar obligation and
market quota release system which is applicable to domestic industry.
AUDIT COMMITTEE
The Board of Directors has re-constituted the Audit Committee on 31st
October, 2009 consisting of Mr. Ranjan Adlakha, Mr. G. S. Matta, Mr.
V.S. Tandon and Dr. R. Vasudevan satisfying the requirements of Section
292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement
with the Stock Exchange.
ISSUE OF FURTHER CAPITAL
During the period under review, the Company obtained shareholders
approval in its Extra-Ordinary General Meeting held on 13.08.2009 for
increase in Authorized Share Capital by creation of 50,00,000
Preference Shares of Rs. 100 each. Consequently, the Authorised
Capital increased from Rs. 40 Crores to Rs. 90 Crores. Your Company
allotted 41,60,000 6.50% Cumulative Redeemable Preference shares to
entities forming part of Promoter group during the financial year.
Your company further proposes to increase the Authorised Capital from
Rs. 90 Crores to Rs. 115 Crores by creation of 25 Lacs Redeemable
Preference Shares of Rs. 100/- each for which Resolution has been
proposed in the Notice.
RIGHTS ISSUE
Your Company has filed a Draft Letter of Offer with Securities Exchange
Board of India (SEBI) for issue of 42,94,833 Equity Shares of Face
Value of Rs. 10/- each (at a premium) to be offered to exiting equity
shareholders on a rights basis in the ratio of 1 (one) Equity Share for
every 6(six) Equity Shares held. Your Company has received SEBI
Observation letter dated 23rd December, 2009. The matter is under
consideration of the Board of Directors.
DIRECTORS
Mr. Vikram Singh Tandon and Mr. Prabhkaran Singh Lalli, Directors of
the Company are retiring by rotation at this forthcoming Annual General
Meeting of the Company and are eligible for reappointment.
Mr. Gurbachan Singh Matta was appointed as an Additional Director of
the Company during the period under review and holds office till this
forthcoming Annual General Meeting. However, the Company has received
requisite notice u/s 257 of the Companies Act, 1956 from a Shareholder
proposing his candidature for the office of Director.
Mr. Satish Chandra and Mr. Krishan Gopal Sharma have been appointed as
Nominee Directors of IDBI Bank Limited and Punjab National Bank
respectively on 15.04.2010 as per CDR terms and conditions. Both
directors were appointed as Additional-cum-Nominee Directors and 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 two Shareholders proposing their candidature for the office
of Director.
Mr. R. K. Agrawal was appointed as an Additional Director on the Board
of the Company on 15.07.2009. However, Mr. Agrawal resigned w.e.f.
25.02.2010. 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;
x(iv) the annual accounts have been prepared on a going concern basis.
AUDITORS OBSERVATIONS
Your Directors wish to clarify the various points as under :-
a) With reference to Managerial Remuneration it is clarified that the
Company has paid Minimum Managerial Remuneration as per Schedule XIII
Part II Section ll(b) of the Companies Act, 1956. The payment of
remuneration has been approved by the Remuneration Committee and also
by the Shareholders in General Meeting. There have been delays in
respect of repayment of installment/ payment of interest to Banks for
continuous period of more than 30 days in some cases. Because of
delays in some cases approval of the Central Govt, is being sought for
payment of minimum remuneration.
b) 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. In view of the cash losses incurred by the
company in the last three financial years there has been liquidity
problems. However, this outstanding dues will be paid as early as
possible.
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 cash losses incurred by the company during
the last three financial years which resulted in the delays.
d) 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 cash
losses incurred by the company during the last three financial years.
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 Companys shares are listed on National Stock Exchange and Bombay
Stock Exchange. The Company has already paid the Listing fees for the
Financial Year 2009-10 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
As required by the provisions of sub-section (2A) of Section 217 of the
Companies Act, 1956 as amended, read with the Companies (Particulars of
Employees) Rules, 1975, the names and other particulars of the
employees are set out in Annexure "B" to the Directors Report.
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.
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, Central Government, Government
of Uttarakhand and U.P., IDBI Bank Ltd., Indian Overseas Bank, Punjab
National Bank, State Bank of India, Oriental Bank of Commerce and
customers 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 : 29th June, 2010 Chairman of the Board
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