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To The Members,
The Board hereby presents its report for the year ended 31stMarch, 2018.
1. Financial Performance
The Financial Summary and Highlights are given below for the period ended 31st March 2018:
(Rs. in Lacs)
For the year ended March 31, 2018
For the year ended March 31, 2017
Revenue from Operations and Other Income
Profit/ Loss before Tax (PBT) & Prior Period Items
Prior Period Items
Profit /Loss before Tax
Tax Expenses: Current Tax
Ea rlier Year Tax
Deferred Tax charge/ (Credit)
Profit/ (Loss) after Tax
2. Performance Review
Your company achieved turnover of Rs. 42,545.04 lacs and has earned a net profit of Rs. 835.75 lacs during the year under review.
During the year under review, your Company has crushed 10,475,342.26 QTLS of Sugarcane and produced 1,021,956 bags of Sugar as compared to previous year crushing of 10,475,594.15 QTLS of sugarcane and production of 1,044,737 bags of Sugar.
The capacity utilization of the plant during the year under review was 85.47% and the average recovery was 9.75% as compared to capacity utilization of 97.74% and average recovery of 9.96% in the previous year.
3. Dividend & Transfer to Reserves
No amount is proposed to be transferred to the reserve(s) and your Directors have not recommended payment of any dividend for the year under review.
During the Financial year 2017-18 the Share Capital of the Company remains the same as that of previous year 2016-17.
5. Risk Management Policy
Board has constituted a Risk Management Committee of the Board, to assist the Board with regard to the identification, evaluation and mitigation of operational, strategic and external risks. Risk Management Committee works towards identifying internal and external risks and implementing risk mitigation steps. On quarterly basis, status updates are provided to the Board of Directors of the Company. More details on risks and threats have been disclosed in the section “Management Discussion and Analysis”.
6. Adequacy of Internal Financial Controls With Reference to the Financial Statements
The Company has adequate internal control procedures commensurate with its size and nature of business. The business control procedures ensure efficient use and protection of Company’s resources and compliance with policies, procedures and statutory requirements. Further Internal auditors are appointed to carry audit assignments and to periodically review the transactions across the divisions and evaluate effectiveness of internal control systems.
7. Vigil Mechanism:
The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.
Mrs. Kunj Deep Kalra, Non-executive Director shall retire at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.
Mr. Jaitender Kumar appointed as an Additional Director w.e.f 27th June 2018 shall retire at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
The brief resume of the Directors being appointed/re-appointed, the nature of their expertise in specific functional areas, names of companies in which they have held Directorship(s), Committee Membership(s)/ Chairmanship(s), their shareholding etc., is given in the section on Corporate Governance Report forming part of this Annual Report.
9. Key Managerial Personnel
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Act are as follows:
1. Mr. Kunal Yadav Managing Director
2. Mr. Ravinder Sharma CFO
3. Mr. Rishav Jaiswal Company Secretary
10. Subsidiary, Associate and Joint Venture Companies
Rangar Breweries Limited is the only associate company of your Company and does not have any subsidiary and joint venture companies. During the period under review, no Company became/ ceased to be a Subsidiary, associate and joint venture Company of your Company.
During the year under review, your Company has not accepted any deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2018, there were no deposits which were unpaid or unclaimed and due for repayment.
12. Transfer of Unclaimed Dividend to Investor Education and Protection Fund
The provisions of Section 125(2) of the Act do not apply as there was no dividend declared and paid by the Company.
13. Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting the Going Concern Status and Company’s Operations in Future
During the year under review, there were no such orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.
14. Declaration of Independence by Director
Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Companies Act, 2013, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6) and relevant Regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
15. Familiarization programme for Independent Directors
All new Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of the Company’s operations, to familiarize the new Ids with the Company’s business operations. The new IDs are given an orientation on our products, group structure and associate company, Board constitution and procedures, matters reserved for the Board, and the Company’s major risks and risk management strategy.
16. Nomination and Remuneration Policy
The Company follows a policy on nomination and remuneration of Directors and Senior Management Employees. The Policy is approved by the Nomination and Remuneration Committee. The policy on the above is attached as Annexure 1.
17. Board Evaluation
Pursuant to the provisions of companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration, Stakeholder and CSR Committee. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.
18. Number of meetings of the Board
The Board met Six (6) times in the year ended 31st March 2018 viz. on 20th April 2017, 30th May 2017, 25th August 2017, 09th October 2017, 07th December 2017, and 14th February 2018. The maximum interval between any two meetings did not exceed 120 days.
Details of the meetings of the Board along with the attendance of the Directors therein have been disclosed as part of the Corporate Governance Report forming part of this Annual Report.
19. Committees of the Board
The Company’s Board has the following committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders’ Relationship Committee
4. Corporate Social Responsibility Committee
The details of the membership and attendance of the meetings of the above Committees of the board are provided in the Corporate Governance report.
20. Composition of Audit Committee
The composition of Audit Committee of the Company is as follows:
1. Mr. Geoffery Frederick Francis Chairperson
2. Mr. Sheoraj Singh Ahlawat Member
3. Mr. Kunal Yadav Member
21. Corporate Social Responsibility
CSR is a company’s sense of responsibility towards the community and environment in which it operates. It is the continuing commitment by business to behave ethically and contribute to economic development of the society at large and building capacity for sustainable livelihoods. The Company believes in conducting its business responsibly, fairly and in a most transparent manner. It continually seeks ways to bring about an overall positive impact on the society and environment where it operates and as a part of its social objectives. This policy has been formally formulated and adopted in terms of Section 135 of the Act and Rules framed there under to undertake CSR activities. The Company has always made consistent efforts to maintain an active corporate social responsibility portfolio.
The Company has duly constituted CSR Committee comprising of Mr. Geoffery Frederick Francis, Mr. Sheoraj Singh Ahlawat and Mr. Kunal Yadav.
The responsibilities of the CSR Committee include:
1. Formulating and recommending to the Board of Directors the CSR Policy and indicating activities to be undertaken.
2. Recommending the amount of expenditure for the CSR activities.
3. Monitoring CSR activities from time to time.
As per the provisions of Companies Act, 2013, all companies having a net worth of Rs. 500 crore or more, or a turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a CSR committee of the Board of Directors comprising three or more directors, at least one of whom should be an independent director. All such companies are required to spend at least 2% of the average net profits of their three immediately preceding financial years on CSR-related activities.
Accordingly, the Company was required to spend 28.73 Lakh towards CSR activities, which is to be utilized on activities specified in Schedule VII of the Companies Act, 2013.
Details of the CSR policy is available on our website www.muksug.com
22. Directors’ Responsibility Statement
Your Directors hereby confirmed that:
(a) in the preparation of the Annual Accounts, for the financial year ended March 31, 2018 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(b) 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 as at March 31, 2018 and of the profit and loss of the Company for the financial year;
(c) the director have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the Annual Accounts on a going concern basis;
(e) The Directors have laid down internal financial controls to be followed by the Company, and these financial controls are adequate and are operating effectively; and
(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
23. Particulars of Loans, Guarantees or Investments Under Section 186 of the Act
During the year, there were no loans and guarantees given under Section 186 of the Act. Particulars of investments have been disclosed as part of the financial statements of your Company for the year under review.
24. Particulars Of Contracts Or Arrangements With Related Parties Referred To In Sub-Section (1) Of Section 188 Of The Act In The Prescribed Form
All contract(s) / arrangement(s) / transaction(s) entered into by your Company with its related parties, during the year under review, were:
- in “ordinary course of business” of the Company;
- on “an arm’s length basis”; and
- not “material”,
as per the provisions of Section 188(1) of the Act read with Companies(Meetings of Board and its Powers) Rules, 2014. Accordingly, Form AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party Transactions, which are “not at arm’s length basis” and also, which are “material & at arm’s length basis”, is not provided as an annexure of the Directors’ Report.
25. Material Changes and Commitments affecting the financial position of the Company
There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.
26. Significant and material orders passed by the regulators or courts
There are no significant material orders passed by the Regulators/Courts. However which would impact the going concern status of the Company and its future operations.
27. Auditors Statutory Auditors:
M/s R. Dewan & Co., Chartered Accountants, the Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from M/s R. Dewan & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Act and that they are not disqualified for such appointment within the meaning of Section 141 of the Act. The observations and comments given by Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 134 of the Act.
Explanation to Auditor’s Remarks
1. The Company has advanced a sum of Rs.11.05.85.000 to M/s. Cosmos Sugar Pvt. Ltd. in the financial year 2016-17. An amount of Rs. 4.46.40,000 is still outstanding as on 31.03.2018. but no interest has been charged on this advance.
2. The Company has provided guarantee in respect of KCC loan secured to the farmers (suppliers) from Banks. As per Tripartite agreement between the Indian Sucrose Ltd., farmers and banks, the banks have sanctioned KCC limit to the farmers and credited the same in the Indian Sucrose Ltd.
3. The Company is holding more than 20% of the paid up share capital of Rangar Breweries Limited therefore Rangar Breweries Limited is an associate company of the Company. Accordingly the Company is required to prepare consolidated financial statements as per the provisions of clause 3 of section 129 of Companies Act 2013.
4. The company is holding Equity investment in Versatile Events Pvt Ltd. and Yadu Resorts (India) Ltd. As per Ind AS-32 “Financial Instrument: Presentation” these financial instruments should be presented at fair value but the fair valuation of these financial instruments as on 31/03/2018 is not available with the company. Accordingly the same have been presented at their carrying cost as of 31/03/2017.
During the financial year under review the Company has appointed M/s. Ajay Kumar Singh & Associates, Cost Accountants, Delhi as the Cost Auditors and the Cost Audit Report is required to be filed with the Central Government within 180 days from the end of financial year.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Lalan Kumar Singh (FCS.:7837)( CP.:8544) from M/s L K Singh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR-3 for the Financial Year ended March 31, 2018 is annexed as Annexure 2 to the Report. There are reservations or adverse remarks made by Secretarial Auditor in this report. The clarifications on the qualifications in the Secretarial Auditors’ Report are self explanatory and no further explanation is considered necessary:-
(a) Company has granted Loan/advance to company in which director are interested the requirement of Section 185 of Companies Act 2013 has not been complied.
(b) The company had issued 7,00,000 cumulative 6% preference cumulative shares of Rs.100 each in Jan 2011, which were convertible into equity shares at a premium of Rs.4 each within 60 months from the date of issue. These shares have not been converted into equity shares which were due for conversion after the month of Dec, 2015. Further, on the request of preference Shareholders Company redeemed above Shares with cumulative 6% dividend on dated 07th December 2017.
(c) Rangar Breweries Limited is associate Company of Indian Sucrose Limited, so Indian Sucrose Limited is require to prepare Quarterly as well as annual Consolidated Financial statements as per the section 129 of Companies Act 2013. But Indian Sucrose Limited has not prepared the Consolidated Quarterly Financial Statements.
(d) As per Section 177 of the Companies Act, 2013 and Rule 6 and 7 of Companies (Meetings of Board and its Powers) Rules, 2014 deals with the Audit Committee the details of establishment of Vigil mechanism Company has displayed whistleblower policy on website, where the contact details of Chairman of are not displayed which Company is advised to do, at the earliest.
(e) Inter se transfer of 4,50,000 Equity shares from open market has been made on date14th February 2018 when trading window was closed.
(f) Compliance of Regulation 7 (2) of SEBI (Prohibition of Insider Trading) Regulation, 2015 has not made within due time.
(g) Compliance of Regulation 33 of SEBI (Listing obligation and disclosure Requirement) Regulation, 2015 of quarter ending June 2017 has not been done on due time.
M/s Bhola Vijesh & Associates, Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.
28. Corporate governance
The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.
29. Conservation of Energy, Technology Absorption And Foreign Exchange Earnings And Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act are provided as follows:
CONSERVATION OF ENERGY
(a) The Steps taken or Impact on Conservation of Energy:
Efforts for Energy Conservation are a continuing process. These efforts continued during the financial year 2017-18 also.
(b) Steps taken by the Company for utilizing alternate sources of energy:
The Company has installed most modern equipments in the plant and is able to save and minimize energy consumption.
(c) The capital Investment on energy conservation equipments:
Total energy consumption and energy consumption per unit of production:
TECHNOLOGY ABSORPTION (R & D)
(I) The efforts made towards technology absorption
i) The Company has adopted latest technology in the plant to maximize production, better quality, and to minimize consumption of energy.
ii) The Company has implemented its own Effluent Treatment Plant of latest technology.
(ii) The benefits derived like product improvement, cost reduction, product development or import substitution.
(iii) Technology imported during the year - Nil FOREIGN EXCHANGE EARNING & OUTGO
(a) Total Foreign Exchange earned Rs. nil (previous year Rs. Nil)
(b) Total Foreign Currency used-Nil
30. Extract of Annual Return
The extract of the Annual Return of your Company as on March 31, 2018 as provided under sub-section (3) of Section 92 in the Form MGT 9 is enclosed with this report as Annexure 3.
The shares of your company are currently listed with Bombay and Calcutta Stock Exchange. Application for delisting with Calcutta Stock Exchanges is still pending and expected to be approved very soon.
Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.
33. Particulars of Employees
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure 4 to this Report.
Further the details of employee remuneration as required under provisions of Section 197(12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company.
34. Management Discussion & Analysis
Management Discussion and Analysis is annexed as Annexure 5.
35. Disclosure Under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has always believed in providing a safe and harassment free workplace for every individual working in the Company’s premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.
The Policy on Prevention of Sexual Harassment at Workplace has been formulated by the Company. The policy aims to develop a harmonious and productive working environment free from sexual harassment. The Company also ensures all allegations of sexual harassment are investigated and dealt with effectively and appropriately and during the year under review, the Company received no complaints pertaining to sexual harassment.
36. Human Resources
Human resources are the most important resource and your directors believe in to give them their due weight age for their crucial role-playing in the overall progress of the organization. The relationship between the management and the staffs/workers has been comfortable and cordial during the year.
Your Directors take this opportunity to express their deep and sincere gratitude to all officers/staffs/workers, as team members, for their dedicated and sincere efforts and also to Bankers, creditors, suppliers and all concerned for showing their continued faith and extending their full and wholehearted support to our organization.
Your Directors would also like to express their gratitude to members for their trust and support.
By Order of the Board of Directors
For Indian Sucrose Limited
Place: Delhi Kunal Yadav
Date: 24-08-2018 (Managing Director)