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Mawana Sugars

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Download Annual Report PDF Format 2017 | 2016 | 2011 | 1214 | 0913 | 0912
Directors Report Year End : Mar '18    Mar 17

The Directors hereby present the 54th Annual Report along with Audited Accounts of the Company for the financial year ended March 31, 2018.

FINANCIAL RESULTS

(Rs. Million)

Sl.

No.

Particulars

Amount

31.3.2018

31.3.2017

1.

Profit before interest, depreciation, exceptional items and tax

439.23

1723.15

2.

Interest

209.90

441.65

3.

Depreciation

239.23

303.40

4.

Exceptional Items - Income

147.59

3492.87

5.

Profit before tax

137.69

4470.97

6.

Provision for taxation

(24.71)

842.11

7.

Profit after tax

162.40

3628.86

8.

Other Comprehensive Income

0.51

(18.19)

9.

Total Comprehensive Income

162.91

3610.67

DIVIDEND

In view of inadequacy of distributable profits as per law, your Directors are unable to recommend any dividend for the year under review.

OPERATIONS

1. SUGAR DIVISION (2017-18)

The cane crush during season 2017-18 was 31.42 Lac Tonne as compared to 23.03 Lac Tonne in the last season. The key operational figures are as follows:

Particulars

Unit

Sugar Season

2013-14

2014-15

2015-16

2016-17

2017-18

Cane Crush

Lac MT

25.58

26.77

21.73

23.03

31.42

Recovery

%

9.09

9.49

10.73

11.18

11.25

Sugar Production

Lac MT

2.33

2.54

2.33

2.57

3.54

Intensive cane development work done in the last 3 years has boosted sugar recoveries significantly.

Higher recovery coupled with increased cane production throughout the State, resulted in excess sugar production leading to a steep decline in current sugar prices by Rs.10,000/ Tonne as compared to last year.

In the absence of no linkage in sugar cane and sugar prices, the profitability has come down drastically and huge losses are being incurred by the sugar industry resulting high cane over dues.

2. CHLOR ALKALI DIVISION:

During the 12 months period Apr''17 - Mar''18, overall the business performed well.

The prices of Caustic Soda increased gradually throughout the year due to increase in international prices, whereas the prices of Chlorine kept on decreasing due to low levels of operations of Chlorine consuming industries.

The products and their quality were well accepted in the market during the entire period of 12 months.

Power contributes towards major portion of the input cost. The electricity requirement for the plant was met through Punjab State Power Corporation Limited and through power exchanges.

SUBSIDIARY COMPANIES

The Company has three subsidiary companies viz. Siel Financial Services Limited, Siel Industrial Estate Limited (Siel IE) and Siel Infrastructure & Estate Developers Pvt. Ltd.

Siel Financial Services Limited, a Listed Company is not doing any business since last 16 years and is planned to be disposed. Siel Infrastructure & Estate Developers Private Limited is a Company that holds 49.27% of Siel IE created for assisting in development of Siel IE.

Pursuant to provisions of Section 129 and other applicable provisions of the Act read with Rules made there under, the performance and financial position of each of the subsidiary companies are annexed in Form AOC-I to the Annual Financial Statements.

There has been no change in relationship of any subsidiary Company during the financial year.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for the financial year 2017-2018, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (LODR) Regulations, 2015.

DIRECTORS

Mr. Piar Chand Jaswal, Director (DIN: 07100098) is liable to retire by rotation and being eligible, offers himself for re-appointment.

Mrs. Parmjit Kaur (DIN: 06714249), an Independent and Non-Executive Woman Director has resigned from the Directorship of the Company w.e.f. 2.5.2018.

Particulars of Director/s seeking appointment/reappointment have been given in the explanatory statement annexed to the notice for the Annual General Meeting.

All the Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgements 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 year;

c) the directors had 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;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED IN THE UNITS OF THE COMPANY

During the year, frauds pertaining to earlier years have been detected in Company''s sugar units at Mawana Sugar Works and Nanglamal Sugar Complex where some employees (who have already left the service of the Company) have embezzled aggregate sum of Rs.29.78 million by forging documents and wrongfully withdrawing payment. FIR has been filed against these persons and necessary legal action in this regard has been initiated to recover the money. No credit for the above amount has been taken in the books, which will be taken once amount is recovered.

KEY MANAGERIAL PERSONNEL (KMP)

During the financial year ended March 31, 2018, following persons are Whole Time Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act, 2013:

Sl.

No.

Name

Designation

1.

Mr. Dharam Pal Sharma

Whole Time Director

2.

Dr. Anil Arora*

Chief Financial Officer

3.

Mr. B.B. Mehta**

Chief Financial Officer

4.

Mr. Ashok Kumar Shukla

Company Secretary

* Resigned from the position of Chief Financial Officer of the Company w.e.f. 4.11.2017.

**Appointed as a Chief Financial Officer of the Company w.e.f. 4.11.2017.

MEETINGS OF THE BOARD

During the financial year ended March 31, 2018, eight Board Meetings were held. In addition to Board Meetings, Nine Resolutions by Circulation on various dates were also passed by the Board of Directors with requisite majority. The details of the Board Meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR), Regulations, 2015.

DECLARATION FROM INDEPENDENT DIRECTORS

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR), Regulations, 2015.

INTERNAL FINANCIAL CONTROLS

The Company has over the years evolved effective systems and procedures to ensure internal financial controls in all its establishments and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Audit Committee evaluates the internal financial control system periodically.

An effective communication/ reporting system operates between the Units and Corporate Office to keep various establishments abreast of regulatory changes and ensure compliances.

STATUTORY AUDITORS AND THEIR REPORT

M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration No:301003E/ E300005), were appointed as Statutory Auditors of the Company from the conclusion of 53rd Annual General Meeting (AGM) till the conclusion of 58th AGM of the Company, subject to ratification of their appointment by the members at every intermittent AGM of the Company.

Accordingly, a resolution for ratification of their appointment as Statutory Auditors of the Company has been included in the Notice of forthcoming 54th AGM of the Company.

The observations of Auditors in their report with the relevant notes to accounts are self-explanatory and therefore do not require further explanation.

COST AUDITORS

The Board, on the recommendation of the Audit Committee, has approved the appointment of M/s. Bahadur Murao & Co., Cost Accountants, New Delhi (Firm Registration No. 4941) as Cost Auditors for conducting the audit of the cost records maintained by the Company for the products (Sugar, Caustic Soda, Industrial Alcohol, Power, SBP) for the financial year 2018-19 at a total remuneration of Rs. 2,40,000/- plus GST & out-of-pocket expenses, if any.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is required to be ratified by the Members of the Company.

Accordingly, confirmation of the Members is being sought by passing an Ordinary Resolution as set out at Item No. 4 of the Notice for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2018.

The Cost Audit Report for the financial year 2016-17 had filed on 22.9.2017, which is within the time limit prescribed under the Companies (Cost Audit Report) Rules, 2011.

SECRETARIAL AUDIT REPORT

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. Nirbhay Kumar (CP No.7887) of M/s Nirbhay Kumar Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2017-18.

The Secretarial Audit Report for the financial year ended 31st March, 2018 is attached as Annexure - I of this Board''s Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PUBLIC DEPOSITS

The Company had not accepted any public deposits under Chapter V of the Act during the financial year ended March 31, 2018.

RISK MANAGEMENT

The Company has a Risk Management Committee to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

AUDIT COMMITTEE

The Audit Committee comprises of three Directors, two directors are independent director and one is non-executive director, viz., Prof. Dinesh Mohan as Chairman, and Mr. Ravinder Singh Bedi and Mr. Piar Chand Jaswal as Members.

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.

NOMINATION AND 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. mawanasugars.com

REMUNERATION POLICY

The Company has adopted a Remuneration Policy for executive and non-executive directors and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration as approved by the Board of Directors on the recommendation of Nomination and Remuneration Committee. The remuneration so approved is subject to the approval by the shareholders and such other authorities as the case may be. The remuneration policy is also placed on Company''s website.

The Non-Executive Directors do not draw any remuneration from the Company except sitting fee paid to them for each meeting of the Board/ Committee thereof attended by them.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The Company has adopted a CSR policy. The Committee is primarily responsible for formulating and recommending to the Board of Directors from time to time the CSR activities and the amount of expenditure to be incurred on the activities pertaining to CSR and monitoring CSR Projects. The CSR Policy of the Company has been placed on the Company''s website.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3) (m) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - II and forms part of this Report.

PARTICULARS OF EMPLOYEES

As required under the provision of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are given in Annexure - III of this Board''s Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note No.5 to Financial Statements.

RELATED PARTY TRANSACTIONS

The transactions entered with related parties during the year under review were on Arm''s Length basis and in the ordinary course of business. The provisions of Section 188 of the Companies Act, 2013 are therefore, not attracted. All related party transactions were approved by the Audit Committee and the Board. The relevant information regarding related party transactions has been set out in Note No. 35 of the Financial Statements for the financial year ended 31.3.2018. Thus, disclosure in Form AOC-2 is not required.

The Board has framed a Policy on related party transactions and placed the same on the Company''s website.

VIGIL MECHANISM

The Company has formulated and implemented the Whistle Blower Policy/Vigil Mechanism. This has provided a mechanism for directors and employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit Committee; any instance of unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct. The aforesaid policy has also been uploaded on the Company''s website.

EXTRACT OF ANNUAL RETURN

The extracts of the Annual Return (MGT-9) 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 - IV to this Report.

CORPORATE GOVERNANCE

In accordance with SEBI (LODR), Regulations, 2015, Corporate Governance Report along with Auditors'' certificate thereon and Management Discussion and Analysis Report form part of this report are enclosed as Annexure - V and forms part of the report.

SHARE CAPITAL

During the financial year ended 31.3.2018, the Company has not issued any share capital with different voting rights, sweat equity or ESOP nor provided any money to the employees or trusts for purchase of its own shares.

UNCLAIMED SHARES SUSPENSE ACCOUNT

In terms of SEBI (LODR) Regulations, 2015, the Company reports the following details in respect of equity shares lying in the suspense account, which were issued in physical form:

Balance as on 1.4.2017

No. of Members who approached the Company for transfer of shares and shares transferred from Suspense Account during the year

Balance as on 31.3.2018

No. of holders

No. of shares

No. of holders

No. of Shares

No. of Holders

No. of Shares

6740

155162

49

3281

6691

151881

The voting rights on the shares in the suspense account as on 31st March, 2018 will remain frozen unless the rightful owners of such shares claim the shares.

The Company has uploaded the details of shareholders whose shares are lying in unclaimed shares suspense account on the website of the Company (www. mawanasugars.com). The shareholders who wish to claim their shares are requested to write to the Registrar of the Company immediately.

ACKNOWLEDGEMENTS

The Directors wish to thank and deeply acknowledge the cooperation, assistance and support extended by Central Government, State Governments, Banks, Financial Institutions, Dealers and Vendors of the Company. The Directors also wish to place on record their appreciation for the all-round co-operation and contribution made by the employees at all levels.

For & on behalf of the Board of Directors

Dharam Pal Sharma (Ravinder Singh Bedi)

Whole Time Director Director

DIN: 07259344 DIN: 01408189

Place : New Delhi

Dated : 23.05.2018

Source : Dion Global Solutions Limited
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