1. CORPORATE INFORMATION
The Oudh Sugar Mills Limited (the Company) is a public limited Company
domiciled in India and an existing company under the provisions of the
Companies Act, 1956. Its shares are listed on two stock exchanges in
India. The Company is primarily engaged in manufacture and sale of
Sugar and its By-products (Molasses and Bagasse), Spirits including
Ethanol, Power and Food Processing Products. The Company presently has
manufacturing facilities at Hargaon District Sitapur, Dhadha Bujurg
District Kushinagar, Rosa District Shahjahanpur and Allahabad in the
State of Uttar Pradesh and at Narkatiaganj District West Champaran in
the State of Bihar.
2. BASIS OF PREPARATION
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the Accounting Standards notifi ed
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those used in the previous year, except
for the change in accounting policy explained in 2.1 (a) below.
(a) Terms / rights attached to Equity Shares
Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution to
equity shareholders will be in proportion to the amount paid up or
credited as paid up.
(b) Terms of redemption of Preference Shares
The Non-Convertible Cumulative Redeemable Preference Shares (CRPS)
issued during the year carries dividend @ 8.5% per annum.
CRPS shall be redeemable at par upon expiry of a period of twelve years
and one day from the date of allotment i.e. 1st August 2011 with a
right vested to the Board of Directors to redeem earlier, subject to
the consent of the lenders. However, no redemption will take place
before 30th June 2014.
Dividend is payable at the time of redemption of the CRPS. However, the
Board reserves the right to pay the dividend arlier with the consent of
the Lenders and subject to the availability of profit.
(a) Term Loans and FITL from Banks carry interest rate in the range of
13.77% to 14.99%. The loans are repayable in quarterly instalments
starting from 30th September, 2012 and are secured by first mortgage /
charge on all the immovable and movable assets (save and except book
debts), present and future, of the Company''s Sugar Units at Hargaon,
Narkatiaganj and Dhadha Bujurg (Hata) and Distillery Unit at Hargaon,
ranking pari-passu amongst the various lenders, subject to prior
charges created on movables for working capital borrowings from the
The above Term Loans including FITL are further secured as follows.
(i) - Second charge on current assets of Sugar Unit at Dhadha Bujurg
(Hata) ranking pari-passu amongst the various lenders.
- Second charge on fixed assets of Sugar Unit at Rosa ranking
pari-passu amongst the various lenders.
(ii) Third charge on current assets of Sugar Unit at Narkatiaganj.
(iii) Third charge on current assets of Sugar & Distillery Units at
(iv) Pledge of 64,79,294 equity shares of the Company held by promoter
group companies, ranking pari-passu amongst the various lenders.
(b) Term loans under Financial Assistance Scheme (Excise Duty Loan)
were secured by a residual charge on entire Fixed Assets (movable and
immovable), present and future of the Company''s Sugar units at Hargaon,
Rosa and Narkatiaganj. The said loan has been repaid during the year
as per the stipulated terms of repayments.
(c) Term loans from the Sugar Development Fund, carry interest of 4%
p.a., are secured by a second charge on all the immovable / movable
assets (save and except book debts) present and future of the Company''s
Sugar Units at Hargaon and Narkatiaganj.
Operating lease :
Certain office premises, godowns, cane purchasing centre etc. are held
on operating lease. The lease term is ranging upto 3 years and
renewable for further year either mutually or at the option of the
Company. There is no escalation clause in the lease agreement. There
are no restrictions imposed by lease agreements. There are no
subleases. The leases are cancellable.
Bearer Equity Share Coupons having a realised value of 0.06 lacs (30th
June, 2011 : 0.06 lacs) has been shown separately under Shareholders''
Funds as the holders of such coupons are yet to tender coupon
certifcates to claim the underlying security i.e. equity shares of
equal paid up value.
The Company had received Preference Share Application Money 3,750 lacs
during the year ended 30 June 2011 against 8.5% Non-Convertible
Cumulative Redeemable Preference Shares (CRPS) of 10 each to be issued
at par. The Company has issued, during the reporting year, CRPS against
the said share application money.
During the year, Company has paid 2,422.19 lacs towards differential
cane price for its Hargaon and Rosa Sugar units in Uttar Pradesh for
the sugar season 2007-08 in term of the order of the Hon''ble Supreme
Court dated 17th January, 2012, which has been shown as Exceptional
Item in the statement of profit and loss.
7. SEGMENT INFORMATION
The primary segment reporting format is determined to be business
segments as the Company''s risks and rates of return are affected
predominantly by differences in the products produced. Secondary
information is reported geographically. The operating businesses are
organised and managed separately according to the nature of the
products and services provided, with each segment representing a
strategic business unit that offers different products and serves
different markets. Accordingly, the Company has identified Sugar,
Spirits, Co-generation and Food processing as the operating
Sugar - Consists of manufacture, trading and sale of Sugar, Molasses
Spirits - Consists of manufacture and sale of Industrial Spirits
(including Ethanol), Fusel Oil and Bio-Compost
Co-generation - Consists of generation and transmission of Power
Food Processing Products - Consists of Canned Fruits and Vegetables,
Jams, Jellies, Squashes and Juices
Others - Consist of Miscellaneous business comprising of less than 10%
The Company primarily operates in India and therefore the analysis of
geographical segments is demarcated into its Indian and Overseas