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Balrampur Chini Mills Ltd.

BSE: 500038 | NSE: BALRAMCHIN |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE119A01028 | SECTOR: Sugar

BSE Live

Aug 07, 16:00
130.20 2.60 (2.04%)
Volume
AVERAGE VOLUME
5-Day
74,583
10-Day
56,436
30-Day
108,310
200,650
  • Prev. Close

    127.60

  • Open Price

    125.00

  • Bid Price (Qty.)

    130.20 (595)

  • Offer Price (Qty.)

    130.20 (65)

NSE Live

Aug 07, 15:59
130.20 2.75 (2.16%)
Volume
AVERAGE VOLUME
5-Day
978,758
10-Day
895,552
30-Day
1,811,036
3,390,241
  • Prev. Close

    127.45

  • Open Price

    127.00

  • Bid Price (Qty.)

    130.20 (120)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2018 2017 2015 2014 2013 2012 2011 2009 2008

Director’s Report

The Directors have the pleasure of presenting their report as a part of the 42nd Annual Report, along with the Audited Accounts of the Company for the year ended 31st March, 2018.

Financial Results

The financial results of the Company are summarised below:

(Rs. in Lacs)

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Revenue from operations

440072.06

364099.71

440072.06

364099.71

Profit before finance costs, tax, depreciation and amortisation, exceptional items and other comprehensive income

47943.54

89451.32

48199.40

89409.73

Less: Finance costs

5203.00

5542.80

5203.00

5542.80

Less: Depreciation and amortisation expense

9522.11

10493.71

9522.11

10502.84

Profit before share of profit of associates and tax

-

-

33474.29

73364.09

Add: Share of profit of associates

-

-

1041.11

127.43

Profit before tax

33218.43

73414.81

34515.40

73491.52

Less: Tax expense

11106.37

14186.16

11348.91

14215.56

Profit for the year

22112.06

59228.65

23166.49

59275.96

Other comprehensive income (net of tax)

(455.20)

(362.95)

(456.74)

(362.92)

Total comprehensive income for the year

21656.86

58865.70

22709.75

58913.04

Dividend and its Distribution Policy

The Board of Directors of the Company declared an interim dividend of 250% (i.e. RS.2.50 per share on Equity Shares of the face value of RS.1/- each) for the financial year ended 31st March, 2018. Total outgo on the interim dividend was RS.7071.69 Lacs (including dividend distribution tax of RS.1196.13 Lacs). The Board has not proposed any final dividend for the financial year ended 31st March, 2018 and accordingly, the interim dividend paid during the year shall be treated as final dividend.

Since the Company is one of the top 500 listed entities based on market capitalisation (calculated as on March 31st of every financial year), pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the Dividend Distribution Policy, has been annexed to this Report as Annexure - I and the same is also available on the website of the Company at the following web-link: http://chini.com/wp-content/uploads/2018/07/Dividend_ Distribution_Policy_2017.pdf

Operations

The operational data of the Company for the last two sugar seasons and financial years are as under:

Particulars

Sugar season

Financial year

2017-18

2016-17

31.03.2018

31.03.2017

Sugarcane crushed (in lac quintals)

1080.39

838.54

927.83

794.65

Sugar produced (in lac quintals)

117.10

90.01

100.56

84.70

Recovery (%)

10.84

10.74

10.86

10.66

[The data for sugar season 2017-18 includes full season workings of all units except for Kumbhi and Gularia]

Industry scenario and outlook

The sugar season 2017-18 commenced with a carryover stock of around 4 million tonnes. Sugar production for the season was initially estimated at 26 million tonnes but revised multiple times at the industrial and ministerial levels. Finally, the country was estimated to have produced ~32 million tonnes of sugar in sugar season 2017-18.

Sugar production for the 2017-18 season surpassed the previous record of 28.3 million tonnes by end-March. This disproportionately higher production was attributed to the sowing of superior cane varieties and higher yields across cane-producing states. Consequently, Maharashtra was estimated to have produced ~10.7 million tonnes of sugar compared to 4.2 million tonnes in the last season. Karnataka was estimated to have produced ~3.6 million tonnes compared to 2.2 million tonnes in the previous season. Uttar Pradesh also reported increased sugar production of ~12 million tonnes compared to 8.8 million tonnes in the previous season, making it the largest sugar producing state for two years in a row.

Moreover, as per field reports, it is expected that the the following season’s cane crop production will not be lower than this year’s production. The higher price of sugarcane with respect to other cash crops has always induced farmers to plant more cane, and this will continue to hold true.

The market probably had anticipated this higher production well in advance. Subsequently, sugar prices began to erode from the beginning of the 2017-18 season and continued unabated following every upward production revision. Consequently, ex-factory sugar prices dropped from RS.37 per kg to lower than RS.27 per kg in Uttar Pradesh. The industry is in a precarious situation where the current sugar realisation is insufficient to cover raw material procurement costs.

This has brought about a situation where the country’s sugar industry is facing a serious and unprecedented cash flow mismatch, resulting in a mammoth cane payment arrears of around RS.20,000 crore as on 31st of March 2018, which could double by March 2019. Realising the gravity of the situation, the Government of India recently announced a RS.55 per tonne cane crushing subsidy in order to partly offset the steep rise in cane procurement costs. However, this may not be enough to overcome the current crisis. Serious efforts need to be undertaken by the Central and State Governments to address the crisis of oversupply along with the mismatch between cane procurement prices and sugar sale prices.

With this huge projected surplus, the opening inventory for next season stands at ~8.5 million metric tonnes (after considering that 2 million metric tonnes of sugar will be exported by September 2018 as announced by the Central Government). A static in domestic consumption growth has made the demand-supply scenario vulnerable with the closing stock in September 2019 pegged at ~15 million metric tonnes without any further export, indicating a further downward slide in the sugar prices.

Against this backdrop, the Central Government has announced measures like increasing import duties, removal of export duties, imposition of stock holding limits and the MIEQ scheme in order to export 2 million metric tonnes of sugar. However, these steps have not managed to revive sugar prices, thus far, making a more proactive governmental interventions necessary to save the industry, which represents the lifeline of the Indian agronomic ecosystem.

- The Central Government needs to announce 6 million metric tonnes of export quota for raw and white sugar by August 2018 so that mills can start producing from October 2018 assisted by the production subsidy.

- The State Governments need to provide subsidies with respect to cane price arrears. The cane pricing policy needs to be scientifically restructured taking into account a long-term perspective.

- Staggered cane price payment structure need to be provided to farmers.

- The GST rate on ethanol needs to be reduced and consequent benefits need to be passed on to millers.

- Ethanol prices need to be increased.

- A policy needs to be framed and implemented that encourages the production of B-heavy molasses to optimise the product mix in favour of ethanol.

- A buffer stock of 3 to 4 million metric tonnes of sugar needs to be maintained over the next two years.

- An aggressive export policy needs to framed and implemented with India’s neighbouring countries under preferential arrangements. These steps need to be undertaken on an emergency basis because the crisis that is being encountered by the industry is not a ‘sentimental’ one but painstakingly ‘real’ with the need to reduce sugar inventory as quickly as possible.

The global sugar sector environment has not been particularly supportive either. The current global production is expected to result in a surplus with increased output in Brazil, Thailand, and the European Union. Centre-South Brazil completed the marketing year 2017-18 with a production of 36 million tonnes of sugar. Experts feel that Brazil will cut down its sugar output in the next season following the global glut and depressed prices. This may result in Brazil concentrating more on ethanol owing to the better price parity on offer. Production in Thailand is expected to be ~14.5 million tonnes with exports estimated at ~11 million tonnes compared to ~7.5 million tonnes in the previous year. China’s production in 2017-18 was estimated at 10.25 million tonnes. With an increase in the customs duty on sugar imports, China’s import during 2017-18 dropped considerably. Raw sugar prices dropped below 11cents per pound following the announcement that surplus sugar available in the global market could increase by ~12 million tonnes by the end of the year. Although, the global surplus is expected to reduce by ~6 million metric tonnes, it may not prove helpful when it comes to combating the threats posed by the global surplus scenario .

BCML’s performance during 2017-18

Revenues earned from operations during the year improved to RS.4,40,072.06 Lacs compared to RS.3,64,099.71 Lacs for the year ended 31st March, 2017, an increase of 20.87% driven by improved sales volumes. Sugar recovery increased by 10.86% during the financial year compared to 10.66% in the previous year. The other segments i.e., distillery and cogeneration delivered steady performances. The Company earned a total comprehensive income of RS.21,656.86 Lacs during the year ended 31st March 2018 compared to RS.58,865.70 Lacs in the previous year.

Segment-wise performance and outlook

Sugar

Sugarcane crushed during the year stood at 927.83 lac quintals compared to 794.65 lac quintals in the previous year, an increase of 16.76% over the previous year. This was on account of the early start to sugarcane crushing operations during the year. This enabled the Company to crush a higher amount of sugarcane. Recovery levels increased to 10.86% compared to 10.66% achieved during the previous year, owing to a higher proportion of early variety sugarcane planted by the farmers. The Company worked closely with farmers to increase the sowing of early cane varieties which will enable the Company to improve recovery rates, going forward. The Company is providing farmers the necessary agro-inputs so as to increase farm yields and improve clean cane quality. Decisive steps were also taken to educate cane growers on modern agricultural practices.

During the year, the Company sold 102.95 lac quintals of sugar at an average realisation of RS.35.56 per kilogram compared to 79.74 lac quintals at an average realisation of RS.35.90 per kilogram in the previous year.

Sugar inventory as on 31st March 2018 stood at 59.98 lac quintals valued at ~RS.25.87 per quintal, leading to an inventory write-down worth RS.31,279.44 Lacs during the year.

Distillery

The Company’s distillery segment performed satisfactorily. The Company produced 810.03 lac bulk litres of alcohol during the year ended 31st March, 2018 compared to 721.58 lac bulk litres during the previous year, an increase of 12.26% over the previous year. Following the achievement of zero liquid discharge status at all the three distilleries, the Company was able to run its plants for a higher number of days, enabling it to produce more alcohol. Going forward, the production of ethanol is expected to increase owing to a higher availability of molasses derived from a higher amount of sugarcane being crushed. Sales during the year stood at 806.59 lac bulk litres compared to 691.80 lac bulk litres during the previous year. Ethanol sales constituted 97.76% of the total segmental volume during the year. The average realisation per bulk litre stood at RS.39.46 compared to RS.42.55 per bulk litre in the previous year. The Central Government fixed the supply price of ethanol at RS.40.85 per litre (including transportation costs) for the period between December 2017 and November 2018 as against the earlier price of RS.39 per litre, which was applicable from December 2016 to November 2017. With a keen emphasis by the Central Government on the ethanol blending programme, the Company foresees increase in the offtake from oil marketing companies during 2018-19.

Cogeneration

The performance of the cogeneration segment remained stable during the year. Total power generated during the year stood at 8,740.91 lac units compared to 7,537.41 lac units in the previous year, an increase of 15.97%. Power exported to the Uttar Pradesh Power Corporation Limited stood at 5,679.85 lac units as against 5,104.93 lac units in the previous year, an increase of 11.26%. The average realisation per unit remained stable at RS.4.81. The Company also sold 3.93 lac renewable energy certificates during the year resulting in gross proceeds worth RS.3,927.04 Lacs. Going forward, the power generation and export volumes are expected to improve due to greater availability of bagasse. As of 31st March 2018, the Company did not hold any renewable energy certificates.

A detailed analysis of the Company’s operations, expectations and business environment has been provided in the Management Discussion and Analysis section, which forms a part of this report.

Governmental policies related to the Sugar Industry

The salient features of the major policies relating to the sugar industry are mentioned hereunder:

- The Central Government increased the FRP for sugarcane for the 2017-18 sugar season to RS.255 per quintal (from RS.230 per quintal during last year) (linked to a basic recovery of 9.5% and subject to a premium of RS.2.68 per quintal for every 0.1% increase in recovery above that level).

- The Government of Uttar Pradesh increased the SAP of sugarcane for the 2017-18 sugar season from RS.305 to RS.315 per quintal, for the normal variety of sugarcane. Additionally, a society cane commission of RS.5.10 per quintal of sugarcane was raised from RS.4.50 per quintal of sugarcane during last year.

- The Central Government fixed the supply price of ethanol at RS.40.85 per litre for the period between December 2017 and November 2018.

Subsidiary and Associate Companies

Following the completion of the Open Offer formalities under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) by Ganesh Explosives Private Limited (Acquirer), Indo Gulf Industries Limited (IGIL) ceased to be the subsidiary of the Company w.e.f. 19th May, 2017. Accordingly, the entire shareholding of the Company in IGIL along with the control and management of IGIL was transferred to the Acquirer. The Company has also been reclassified as “public shareholders” in terms of Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the “Listing Regulations”), by the concerned stock exchange where the equity shares of IGIL are listed.

During the year under review, Auxilo Finserve Private Limited (AFPL) became an associate company, consequent to the allotment of 3,75,00,000 equity shares having face value of RS.10 each (50% equity shareholding) to the Company by AFPL.

Except the above, no body corporate has become or ceased to be a subsidiary, joint venture or associate company during the year.

Consolidated Financial Statements

In compliance with the provisions of the Companies Act, 2013 (as amended) (the “Act”) and implementation requirements of the Indian Accounting Standards Rules on accounting and disclosure requirements, as applicable and as prescribed under Regulation 34 of the Listing Regulations, the Audited Consolidated Financial Statements form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement in Form AOC-1 containing the salient features of the financial statements of the Company’s Subsidiary and Associate companies is also provided in this Annual Report.

The audited financial statements of the Company including the consolidated financial statements and related information of the Company are available on the website of the Company at www. chini.com. Since, the Company doesn’t have a subsidiary, the compliance under Section 136 about separate financial statements do not apply to it.

Share Capital

During the year under review, the Company issued and allotted 17,500 equity shares of RS.1 each at a price of RS.45 per share (including premium of RS.44 per share) upon the exercise of 17,500 options under the Employee Stock Option Scheme. Apart from this, the Company has received applications (along with the requisite share application money including premium) in exercise of 10,000 options (in aggregate) under the Employee Stock Option Scheme. The allotment of equity shares against these applications is pending as on 31st March, 2018.

Further, during the year 2017-18, the Company issued and allotted 360 equity shares of RS.1 each at a price of RS.26 per share (including premium of RS.25 per share) on rights basis. The allotment of these shares was made out of the Rights Issue - 2004 hitherto were kept in abeyance pending resolution of certain disputes.

Consequently, the paid-up share capital of the Company increased to RS.23,50,28,327 consisting of 23,50,28,327 equity shares of RS.1 each.

Buyback of Shares

During the year under review, the Board of Directors of the Company approved buy-back of the equity shares of the Company, through the “Tender Offer” route using the Stock Exchange Mechanism, for an aggregate amount of upto RS.9,900 Lacs (being 6.78% of the total paid-up equity share capital and free reserves of the Company as on 31st March, 2017), at a price of RS.150/- per Equity Share on a proportionate basis in accordance with the provisions contained in the Act, rules made thereunder, the SEBI (Buy Back of Securities) Regulations, 1998 and other applicable circulars, clarifications and notifications. Formalities pertaining to extinguishment of equity shares bought back were completed on 4th April, 2018.

Employee Stock Option Scheme

The applicable disclosures as required under the SEBI Guidelines as amended and the details of stock options as at 31st March, 2018 under the Employee Stock Option Scheme, 2005 are set out in the attached Annexure - II and forming part of this Report.

Credit Rating

CRISIL and ICRA Limited, credit rating agencies, both have individually assigned the credit rating of AA with respect to longterm loans and A1 with respect to short-term loans.

Directors

The members of the Company at the 41st Annual General Meeting held on 30th August, 2017, appointed Shri Naresh Dayal as a NonExecutive, Non-Independent Director, liable to retire by rotation with effect from the date of the said AGM of the Company.

At the said AGM, the members of the Company also re-appointed Shri Vivek Saraogi as the Managing Director of the Company for a further period of 5 years with effect from 1st April, 2017 and Dr. A. K. Saxena as a Whole-time Director of the Company for a further period of 5 years with effect from 1st August, 2017.

With deep regret, the Board reports the sad demise of the Chairman and Independent Director, Late (Shri) Naresh Chandra, on 9th July, 2017 and would like to place on record its highest gratitude and appreciation for the guidance given by Late (Shri) Naresh Chandra to the Board during his tenure as a director.

Director retiring by rotation

Shri Naresh Dayal retires from the Board by rotation and being eligible, offers himself for re-appointment.

Information regarding the directors seeking reappointment

Resume and other information regarding Shri Naresh Dayal seeking re-appointment as required by Regulation 36 of the Listing Regulations has been given in the Notice convening the ensuing AGM. The Board of Directors recommends the above reappointment.

None of the Directors of the Company are disqualified as per the applicable provisions of the Act.

Other Information

Appointment of directors is made in accordance with the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors.

Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Extract of Annual Return annexed hereto and forming part of this Report.

The Executive Directors (including Managing Director and Wholetime Director) of the Company did not receive any remuneration or commission from the Subsidiary Company during the year 2017-18.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed both under the Act and Regulation 16 of the Listing Regulations.

Separate Meeting of Independent Directors

Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.

Directors’ Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act and Regulation 18 of the Listing Regulations in the preparation of the annual accounts for the year ended 31st March, 2018 and state that :

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have selected such accounting policies and 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 profit of the Company for that period;

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

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Particulars of Employees

The particulars of employees, as required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are given in a separate annexure attached hereto as Annexure - III and forms part of this Report. During the year under review, no complaint / case was filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act are given in Annexure - IV attached hereto and forming part of this Report.

Deposits

The Company has not accepted any deposit from the public and consequently, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Shri Vivek Saraogi, Managing Director, Shri Pramod Patwari, Chief Financial Officer and Shri Nitin Bagaria, Company Secretary. During the year, there has been no change in the Key Managerial Personnel of the Company.

Details pertaining to their remuneration have been provided in the Extract of Annual Return annexed hereto and forming part of this Report.

Board Meetings

The Board met 6 (six) times during the financial year under review, the details of which are given in the Corporate Governance Report attached to this Report.

Committees of the Board

Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Executive Committee and Share Transfer Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.

Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Audit Committee

All recommendations made by the Audit Committee during the year were accepted by the Board.

Whistleblower Policy

The Company has in place a Whistleblower Policy to deal with unethical behavior, victimisation, fraud and other grievances or concerns, if any. The aforementioned whistleblower policy is available on the Company’s website at the following web-link: http://chini.com/wp-content/uploads/2018/03/Vigil_Mechanism_ Policy.pdf

Policy on Selection and Remuneration of Directors

The Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees is annexed as Annexure - V.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, the Board has carried out the evaluation of its own performance and that of its Committees as well as evaluation of performance of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.

Corporate Social Responsibility

During the year, the Company has signed a tripartite Memorandum of Understanding (MoU) with the National Skill Development Fund (NSDF) and National Skill Development Corporation (NSDC) for skilling of 1000 women over a period of 24 months to empower women from various rural and urban areas of Uttar Pradesh. This programme will offer economic security and stability for women by facilitating employment related training.

The CSR policy approved by the Board is available on the Company’s website at the following web-link: http://chini.com/wp-content/uploads/2018/03/CSR_Policy.pdf The Annual Report on CSR activities is appended as Annexure - VI.

Inter-corporate Loans and Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements forming part of this Annual Report.

Related Party Transactions

There have been no materially-significant related party transactions made by the Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of the Company at large. The Policy on Related Party Transactions as approved by the Board can be accessed on the Company’s website at following web-link:

http://chini.com/wp-content/uploads/2018/03/Policy_on_materiality_of_Related_Party_Transactions.pdf

The details of the related party transactions are set out in the notes to the financial statements.

Risk Management Policy

The policy on risk assessment and minimisation procedures as laid down by the Board are periodically reviewed by the Audit Committee and the Board. The policy facilitates in identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Management Discussion and Analysis Report.

Extract of Annual Return

Extract of Annual Return in Form MGT- 9 is annexed to this Report as Annexure - VII. The said Annexure also contains the list of Associates of your Company as on 31st March, 2018.

Material Changes and Commitments

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e. 31st March, 2018 and the date of this Report.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed.

Corporate Governance

In terms of the provisions of Regulation 34(3) of the Listing Regulations, the Management Discussion and Analysis, the Corporate Governance Report and the Certificate on the compliance of conditions of Corporate Governance form part of the Annual Report and are given separately as Annexure - VIII.

Business Responsibility Report

Regulation 34(2) of the Listing Regulations, inter alia, provides that the annual reports of the top 500 listed entities based on market capitalisation (calculated as on March 31st of every financial year), shall include a Business Responsibility Report. Since the Company is one of the top 500 listed entities, it has presented its Second Business Responsibility Report for the financial year 2017-18, as Annexure - IX to this Report.

Auditors

Statutory Auditors and their Audit Report

Pursuant to the applicable provisions of the Act, the members of the Company at their AGM held on 30th August, 2017, appointed M/s. Lodha & Co., Chartered Accountants (Firm Registration No. 301051E), as the Statutory Auditors of the Company to hold office from the conclusion of the 41st AGM until the conclusion of the 46th AGM.

The reports given by the Auditors, M/s. Lodha & Co., Chartered Accountants on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2018 form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.

The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

Secretarial Auditors and their Audit Report

Pursuant to the provisions of Section 204 of the Act, the Company has appointed M/s. MKB & Associates, Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year 2017-18 is attached as Annexure - X and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors and their Audit Report

The Cost Auditors (M/s. N. Radhakrishnan & Co., Cost Accountants) appointed by the Board have submitted the Cost Audit Report within the time limit prescribed under the Act and Rules made thereunder.

During the year under review, pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the Board appointed M/s. N. Radhakrishnan & Co., Cost Accountants, to conduct cost audit of the Company relating to sugar (including industrial alcohol) and electricity for the financial year ended 31st March, 2018.

On the date of this Report, your directors have, on the recommendation of the Audit Committee, appointed M/s. N. Radhakrishnan & Co., Cost Accountants, as the Cost Auditors of the Company for the financial year 2018-19. As required under the Act, a resolution seeking ratification of the remuneration payable to the Cost Auditors form part of the Notice convening the ensuing AGM.

Annexures forming part of this Report

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report :

Annexure

Particulars

I

Dividend Distribution Policy

II

Details of Employee Stock Option Scheme

III

Particulars of Employees

IV

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

V

Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity

VI

Annual Report on CSR activities

VII

Extract of the Annual Return as per Form MGT-9

VIII

Corporate Governance Report and Management Discussion & Analysis

IX

Business Responsibility Report

X

Secretarial Audit Report

Appreciation

Your Board of Directors takes this opportunity to thank all the stakeholders - the Central Government, the Government of Uttar Pradesh, shareholders, customers, dealers, State Bank of India, HDFC Bank, ICICI Bank, Punjab National Bank, other banks and financial institutions and all other business associates for their excellent support. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees.

For and on behalf of the Board of Directors

sd/- sd/-

Dr. Arvind Krishna Saxena Vivek Saraogi

Place: Kolkata Whole-time Director Managing Director

Date: 19th May, 2018 DIN - 00846939 DIN - 00221419

Director’s Report