riga sugar company ltd Directors report

To

THESHAREHOLDERS

Your Directors have pleasure in presenting their Report and audited Accounts of the Company for the financial year ended 31 st March, 2021.

FINANCIAL & OPERATIONAL RESULTS

(Rs. in Lacs)

	Financial Year 31st March, 2021	Financial Year 31st March, 2020
FINANCIAL RESULTS
(a) Gross Turnover	7,914.16	15313.22
(b) Operating Profit Before Finance Cost & Depreciation	(1,525.38)	(407.76)
(c) Finance Cost	1,757.59	1481.02
(d) Cash Accruals	(3,282.97)	(1,888.78)
(e) Depreciation & Amortization	518.61	521.18
(f) Profit (Loss) before extraordinary items	(3801.58)	(2,409.96)
(g) Extraordinary Item of Exp./Income	-	-
(h) Profit (Loss) Before Tax	(3801.58)	(2,409.96)
(i) Provision for Tax
- Deferred Tax	935.52	-
- Income Tax of earlier year	-	-
(j) Profit (Loss) After Tax	(4,737.10)	(2,409.96)
(k) Other comprehensive Income (net of tax)	(17.40)	(59.24)
(l) Total Comprehensive Income for the year	(4,754.50)	(2,469.20)

DIVIDEND:

In view of continuous losses company is unable to pay Dividend.

OPERATIONAL RESULTS Sugar Unit

During the year 2020-21 there was no production in sugar factory as sugar factory could not start its production. Thus the figures for the year ended 31st March, 2021 vis -a-vis previous financial year ended 31 st March, 2020 in respect of the Sugar Factory of your Company are given below:-

	Financial Year 31st March, 2021	Financial Year 31st March, 2020
1. Duration of crushing (gross days)	NIL	120
2. Cane crushed (Lac Qtls.)	NIL	33.17
3. Recovery (%)	N.A.	8.10
4. Production (Lac Qtls.) -	NIL	2.69
The sales of sugar unit decreased by 54% from Rs. 135.02 Cr to Rs. 62.48 Cr

The crushing season 2019-20 started from 18th December, 2019 and concluded on 29th February, 2020. Due to labour problems and strike during season period the recovery of sugar affected resulting higher cost of production.

Due to Labour unrest, Sugar season could not be started for the season 2020-21. The sugarcane area of the company allotted to other sugar factories. Due to Non-availability of fuel and power Distillery could not run and subsequently due to labour unrest, operation of Boiler thus Distillery could not be started. There was no production of Sugar, Molasses and Ethanol during the financial year 2020-21. So that Previous Year/Quarter Figures are not comparable.

Since 30th September, 2018 all Bank loans of the company are N PA. The bankers allowed Holding on operation subject to terms & conditions therein up to 30.09.2021.

Sugar sale price remained subdued during the year, much below cost of production of sugar.

The sale price of sugar was lower than cost of production. The central government fixed minimum floor price of sugar at Rs. 31 per kg which was announced to revise Rs.33 per kg from 1 st October, 2020. However the cost of production of sugar on all India basis was much higher and industry demanded floor price of Rs. 35-36 per kg which was not accepted by the government, which resulted in a loss on realizations. The parity between cane price and sugar price is yet to be established.

Due to continuous abysmal lower recovery the sugar factory made huge lossess as mentioned below:--

	Narkatiaganj	Sidhwalia	Hasanpur	Harinagar	Riga	Majhaulia	Gopalganj	Bagaha
2018-19	11.31	10.33	11.23	10.71	8.01	10.00	10.36	10.35
2019-20	11.54	10.92	11.00	11.42	8.86	9.91	10.18	11.24

Continuing Losses

During last 10 years company has incurred Loss of Rs. 164 Cr. but still made repayment of Term Loan of Rs. 79 Cr. and interest of Rs. 159 Cr., as enumerated below:-

Rs. in Lacs

	11-12	12- 13	13-14	14-15	15-16	16-17	17-18	18-19	19-20	20-21	Total
Net Profit (Loss)	(524)	(350)	(272)	(1,442)	(506)	(409)	(2081)	(4,643)	(2,410)	(3801) (16,438)
Term Loan Repayment	1,432	492	477	1,066	786	1,205	1,410	1,039	21	--	7,928
Payment of Interest	1,571	1,559	1,318	1,607	1,435	1,502	1,765	1,963	1481	1,758	15,959

Due to continuous losses for last 10 years there are cane price arrears to farmers. However the company has totally repaid the sugar cane price till season 2017-18.

Riga Sugar for last 6-7 years due to natural calamities, disparity in sugar price & cane price, closure of distillery on CPCB directions have faced tremendous problem. Cyclone Phailin in 2013, Cyclone Hud-Hud in 2014, Earthquake in 2015, Flood in 2017 and 2019 have made great loss to company. The State Government had given assurance to help and visited the area but no compensation was granted. In August 2017 and 2019 heavy flood also caused huge damage to our plant and sugarcane.

The incentive claim as declared by the State Government and other receivable from state government are still pending for long time which the Government is not releasing. The same amount could have been used for payment of cane price arrears for the season 2018-19.

Since the entire bank loans of the company had became an NPA in the year 2018-19, the bankers allowed holding on operation which is still going on.

Due to continuous losses, the Net worth of the company is fully eroded which may have an effect on the entitys ability to continue as a going concern. However, the Management is still hopeful that with financial restructuring by the banks and financial assistance from the state and central government the company can still revive.

(1) The company has made request for following support from central and state government, if provided the company can be revived: -

CENTRAL GOVERNMENT

(a) Ethanol Loan to NPA sugar factory who has defaulted in SDF

To increase the no of days of operation of Ethanol Plant from present restricted 270 days to 330 days and consequential increase in plant capacity company have to install Incineration boiler and also install Modification System for which company has applied to Central Government for approval Project so as to avail Term Loan from Bank with interest subvention upto 6% p.a. for 5 years as per Scheme announced by the Central Government dated 15.09.2020. The same was sanction subject to payment of dues of LSPEF and SDF.

(b) Company have been deprived from Soft Loan Scheme announced by the Central Government to Sugar Industry. In this regard the Principle Secretary, Dept. of Sugarcane Industry, Govt. of Bihar vide letter dated 8.9.2020 has recommended to Central Government for Soft Loan to Riga Sugar of Rs. 40 Cr. to pay-off the cane price arrears, which is still pending with the Central Government.

(c) MIEQ & Cane price Subsidy by the Central Government for the season 2018-19

The central government had announced cane price subsidy for the season 2018-19 at the rate of Rs. 13.88 per qtl. However, it was linked with compulsory export obligation known as MIEQ. However, there was loss on making export of sugar which the majority of weak companies like company could not bear and thus could not pay cane price subsidy to the farmers and thus farmers are deprived of cane price subsidy. Company has demanded that central government to pay Rs. 13.88 for season 2018-19 directly to farmers without linking with prior export obligation to weak and small sugar companies.

(d) Non-payment of 3rd and 4thqtr Buffer Stock Claim of 2018 Scheme of Rs. 123.74 Lacs and other penalty.

Buffer Stock claim for 3rd and 4th quarter as per Scheme of Buffer Stock dated 15th June, 2018 of Rs. 123.74 Lacs has been withheld because the company have not able to export sugar in 2018-19 as per MIEQ, because there was upfront loss on such export which could not bear.

For one fault of non-export which is reason beyond control, the Company is penalized by multiple ways as follow: -

i) Not given cane price subsidy of Rs. 13.88/- per quintal on cane crush of 45.25 Lacs qtl. in 2018-19 i.e., Rs. 6.29 Cr. which could have gone to farmers directly.

ii) Withholding of Buffer subsidy of 3rd and 4th quarter on date of Rs. 1.23 Cr, which will go to the cane price arrears.

iii) Reduction of subsequent Buffer qty created in of 2019.

iv) Non-eligibility of the company to avail subsidized soft loan to pay cane price arrears as per scheme dated 2nd March, 2019 to pay cane price arrears to farmers of 2018-19.

STATE GOVERNMENT

The company has made request for the following support from the State government. If provided, the company can be revived and it can come out of NPA: -

(a) Provide company additional cane price subsidy of Rs.40 per qtl. for the season 2017-18 and additional cane price subsidy of Rs.30 per qtl. for the season 2018-19 over and above the subsidy announced for all Bihar sugar mills- This will ward-off the additional losses incurred by us on account of lower Recovery for payment of cane price to Farmers.

(b) Provide company soft term loan of Rs. 40 crores at interest rate of 4% for period of 10 years with moratorium of 5 years, so that we can pay cane price for last season and current season. The Bank has already agreed to provide second charge on Fixed Assets of the company toward security of such loan. But no action from state government.

The aforesaid amount can be paid directly to the farmers.

(c) Release of Bihar Soft Loan Interest subvention for the FY 2016-17 to 2020-21 Rs. 493.45 Lacs.

(d) Reimbursement of Co-gen subsidy of Rs.156 lacs pending since last 2 years.

(e) Help farmers directly for procurement of High Yield variety of cane seed of CO 238 for 2 years of Rs. 10 Cr.

(f) Compensation towards running sugar plant in scorching heat of April and May, 2019 as per direction of the state government in the interest of farmers in season 2018-19 and consequent loss by way of extremely lower recovery estimated at Rs. 7.45 Cr.

Central Government action during the year

The Central Government announced the export policy for sugar albeit delayed by three months. In spite of multiple bottlenecks like shortage of containers or lower labour availability at ports due to lockdown restrictions, the sugar export from India is expected to touch 6.8 MMT during the sugar season 2020-21 in comparison to ~5.8 MMT during last season. As a result, the carry forward stock of sugar in the country as on 30th September 2021, is expected to be around 9.5 MMT or around 4.5 months of sugar consumption.

Fair & Remunerative Price (FRP) of sugarcane for the sugar season 2020-21 was revised to Rs. 285 per quintal from Rs.275 per quintal in the previous year (linked to a basic recovery of 10%).

The pricing methodology for ethanol remained unchanged. Ethanol prices are announced annually by the Central Government based on a formula, which factored the price of sugar and FRP of sugarcane to calculate ethanol procurement prices. Ethanol prices are delinked from crude or petrol prices. Ethanol prices for the supply period from December 2020 to November 2021 were increased to Rs.45.69, Rs.57.61 and Rs.62.65 per BL for ethanol produced from C-heavy molasses, B-heavy molasses and direct cane juice/sugar syrup respectively compared to Rs.43.75, Rs.54.27 and Rs.59.48 per BL in the previous period.

Minimum Selling Price (MSP) of sugar was first fixed at Rs.29 per kg in June 2018 and later increased to Rs.31 per kg in February 2019. MSP is the ex-factory price (excluding GST and transportation charges) below which no mill can sell sugar in India. Owing to India becoming a surplus sugar producer, the MSP environment is expected to continue. The Group of Ministers recommendation to revise the MSP from Rs.31 to Rs.33 per kg is awaiting Cabinet approval for long time.

Stock holding limits on mills in the form of maximum monthly sale quotas continued.

The export of 60 Lacs MT of sugar from India, with WTO-compliant financial assistance, was announced.

A higher customs duty continues against the import of sugar. / A zero customs duty also continues for the export of sugar.

The Central Government announced differential and attractive prices for ethanol generated from damaged/surplus food grains. Soft loans are encouraged through banks for commissioning new distillery capacities or augmentation of existing capacities, which could facilitate higher ethanol production and reduce the sugar surplus through the diversion of B-heavy molasses and direct cane juice/sugar syrup away from sugar to ethanol.

The Department of Food & Public Distribution, Government of India, constituted a working committee to look into the aspect of sugar cane price rationalisation and other matters to present a long-term sustainable solution for the entire sugar eco-system after due consultation.

For long-term solution, further proactive steps are required to be taken again on priority basis in order to protect the interest of various stakeholders:

• Most of the sugar producing countries in the world including some of the largest viz. Brazil, Thailand, Australia and USA follow the Revenue Sharing Formula (RSF) to pay cane price to farmers. India should also follow the same so as to achieve its competitiveness on the global front.

• Dr. Rangarajan committee as well as Niti Ayog have recommended the concept of joint implementation of FRP, RSF and PSF

(Price Stabilization Fund) as a permanent long term solution for the sector; otherwise the sector would continue to require Government support. Once the above formula is in place, millers liability for cane price to be limited to the amount arrived at as per RSF, farmers will continue to get FRP and the difference between the FRP and the RSF to be paid from PSF. PSF has to be on a self-financing mechanism. State Advised Price (SAP) to be done away with. Cane price to be allowed to be paid in instalments across the country so as to ease the pressure on the working capital requirements of the sugar mills which will also support the sugar prices.

The All India sugar price and sugarcane price announced by Central Government as per FRP for last 9 years are depicted below:-

Year	Sugar Price	Price Sugarcane Price (FRP)
2011-12	2,951	145.00
2012-13	3,148	170.00
2013-14	2,917	210.00
2014-15	2,492	220.00
2015-16	3,121	230.00
2016-17	3,620	230.00
2017-18	3,136	255.00
2018-19	3,050	275.00
2019-20	3,300	275.00
2020-21	3,300	285.00

The sugar price during last 10 years increased by 12%, whereas the sugarcane price increased by 97%.

Distillery Unit	Financial Year 31st March, 2021	Financial Year 31st March, 2020
1. Production of Ethanol from Molasses (Lac BL)	NIL	77.80
2. Supply of Ethanol (Lac BL)	25.98	58.73

There was no production during the year in Distillery.

Co-Gen of Power

During the year due to non-operation of sugar season there was no co-gen.

Bio-Compost Fertiliser

The company is using distillery effluent and press mud from sugar and other agricultural waste to produce bio-compost which is very cost efficient. Thus the company apart from treatment of effluent and zero discharge adding value. The company got Registration of Bio-compost under Fertiliser Control Order, 1985 with Ministry of Agriculture as per requirement of CPCB.

SEGMENT-WISE PERFORMANCE:

During the reporting period sugar segment contributed 85 percent of net sales of the company whereas Distillery accounted for 15 percent. The company identified two business segments in line with the Accounting Standard on Segment Reporting, Segment- wise Revenue, Results and Capital Employed as stated in Note No.25 (5) of financial statement enclosed with the Annual Report.

Significant changes in key financial ratio:

i) Interest Coverage Ratio deteriorated from (0.28) to (0.87) due to increased operating loss. .

ii) Current Ratio deteriorated from 0.32 to 0.04 due to further increase in loss during the year and consequent depletion in Current Asset.

iii) Debt Equity Ratio: the total Debt of the company vis-a-vis shareholder fund are negative both years.

iv) The Operating Profit Margin Percentage was negative both year which was (24.16) in 2020-21 and (5.91) in 2019-20 due to no operation of plant and consequent loss.

v) Net Profit Margin was negative in both year (56.00%) in 2020-21 and (15.34%) in 2019-20. This deterioration was due to loss because of no operation of plant.

vi) For both years both Net Worth and Return was negative and thus nothing to comment.

INDUSTRY STRUCTURE & POLICY

Structure

Sugar Industry, is seasonal in nature and directly dependent on monsoon for availability of adequate sugar cane. India is the largest consumer and second largest producer of sugar in the world, contributing over 15 percent of the worlds sugar production through over 600 sugar factories situated in different parts of the country. The sugar Industry is the largest agro based industry in India. This industry also provides valuable by-products like bagasse, molasses and press mud. The availability of these by-products led to setting up of Alcohol/Ethanol/co-generation of Power and Organic Manure plants. Over 5 Crore farmers, large number of agricultural labourer are involved in sugarcane cultivation and its harvesting operations. The growth of sugar industry has a powerful impact on the rural economy. Integrated Sugar Industry (comprising sugar, molasses, alcohol, power and bio-fertilizer) enjoys annual turnover of over Rs. 1,00,000 Crore and contribute about Rs.5,000 crore to the Central Government Exchequer by way of GST beside state taxes on sugarcane and hefty taxes collected by state as excise and VAT on sale of spirit in the state which run an estimated Rs. 10,000 crores annually. The Income tax also contributes to the government coffer. Industry accelerates rural development through farm employment as well as business opportunities in transport and communication.

Sugar has been declared as an essential commodity under the Essential Commodities Act, 1955. Under Sugarcane (Control) Order, 1966, the Government of India fixes cane price called Fair and Remunerative Price (FRP) for sugarcane every year based on the recommendations of the Commission on Agricultural Costs & Prices. However many state government fixes higher cane price for the sugar factories in their state. In Bihar there is no statutory provision of State Advised Price, but actual cane price is fixed in consultation with the state. CACP gives recommendation of cane price , but government do not implement due to political consideration. Since last few year Central government is also fixing floor price of sugar below which no sugar factory sale sugar. This is check the free fall of sugar price. However floor price is lower than cost of production.

Sugar Cycle

The Indian sugar industry is characterized by cycle of high and low sugar production. This cycle of 3-4 years is broadly of two types viz. Natural comprising climatic variation, water availability and pest attacks. The other is induced cyclicality which have sequence like -- higher sugar production and accumulation of stock -- decline in sugar prices & profitability -- higher sugarcane arrears -- decline in area under cultivation & Lower cane production -- lower sugar production -- lower sugar availability and stock and thus increase in sugar prices --- improved profitability & low cane arrears -- higher cane production -- higher sugar production and so on. Every time the cyclicality reaches its low government have to step in to provide Fiscal support in the form of Export subsidy, Buffer Stock creation, Interest Free Loans etc. For last few years the Central Government is aggressively promoting Ethanol production and thus allowing B-Heavy Molassess and syrup for production of Ethanol whose price is quite attractive. This has led to diversion of excess sugarcane toward production of Ethanol and thus the famous sugar cycle is breaking its trend for last few years.

The fundamental problem of the Indian Sugar Industry is that there is no parity between the price of raw material i.e. sugarcane and its finished goods of sugar i.e. Illogical intervention of state government cause wide economical distortation in sugar industry. In almost all major sugar producing countries of the world the price of cane paid to the farmers depends on realization from sugar.

Rangrajan Committee Report-Linkage of Raw Material Costs and Sugar Realization

The main recommendation of Rangrajan Committee report of the year 2012 regarding linkage of cane price with sugar price and its by products has not been implemented so far. The committee has suggested for revenue sharing model under which 70% of sugar value and each of its major three by-products would be paid to farmers. Rangrajan Committee has indicated a derived cane price formula. It indicates that cane price will not be an absolute but linked to another variable. Cane price will be linked to the price of sugar in the market place. The higher the sugar realizations, the greater will be the cane price. This is an internationally tested model. This ensures that any increase in sectors profitability is equitably shared between its manufactures and growers. The cane grower will not be treated outsider, but as partner of entire value chain. The Rangrajan committee has gone a step further in this proposed linkage; it has proposed a sharing percentage at a level higher than what is practiced abroad, which more than secures the interest of farmers.

Fixation of cane price at high level than the market price of sugar should be made illegal. Various committees and high-level committee like Rangarajan have said so. According to Rangrajan Commitee, "A sugar unit without any by-products business will have to pay cane price of 70% of its revenue realisation, while it will have to spend 30% on its functioning. On the other hand, a sugar factory with by-products business will have to pay cane price of 75% of its revenue realization from sugar. The cane price to be fixed taking into account this formula."

Pollution Control- Zero Discharge Company

The Sugar and Distillery factories of the company are Zero Discharge Plants as per norms of Central Pollution Control Board and Ministry of Forest and Environment. The company treat the entire solid waste generated from Sugar factory which is generated in the form of Press-mud and liquid generated from Distillery in the form of spent wash for production of Bio-Compost. For this the company has set-up Digesters, MEE, RO, Lagoon and Bio-compost facilities on more than 17 Acres of Land. The Digesters is capable of generating bio-gas which is replacement of fossil fuel. The Bio-compost produced is rich in all organic nutrients required for fertility of the land. The said bio-compost is sold to farmers who supply sugarcane to company and also to other farmers and even used in Tea Gardens of Assam and Darjeeling.

The company is not only zero discharge company, but is also generating economic value from such waste products and rejuvenating the farm land through use of organic fertilizer.

As per revised norms of CPCB, Distillery of the company has also installed CPU. Now to increase number of permitted days of Distillery operation from present 270 days to 330 days CPCB has prescribed installation of Incineration. Due to financial constraints company has not been able to install the same. However the Central government has notified scheme for interest subvention Loan from the Bank for financing of Incineration. The company has applied for such subsidized loan and has been granted in-principle approval of Loan of Rs.30 Cr. from central government subject to payment of dues of LSPEF and SDF.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

Sugar

India is largest consumer and second largest producer of sugar in the world. Major consumers are manufacturer of cold drink, Biscuits, Confectioneries and Halwais which constitute 70% of total consumption and rest 30% by ordinary consumer. There are huge scope for further increase in demand as India is still lagging behind from many advanced countries in respect of per capita consumption of sugar. Thus there are opportunity in production and consumption of higher quantity of sugar in coming period.

Distillery

The mandatory provision of ethanol blending of 10% have strong support for growth of sugar industry. Ethanol production improves oil security and contributes to environmental protection. The Government has announced its policy decision and set aim to increase the ethanol mixing with petrol at 20% by the year 2025 which was earlier 2025 and also mixing with Diesel. The Government of India has announced package for financing of Ethanol Production Capacity including new Ethanol plant and expansion including financing of Pollution Control Equipment. The remunerative price of Ethanol from B Heavy and Syrup is leading to setting up of Ethanol Plant. Thus coming years the Ethanol is going to be major driver for growth of sugar industry in the country.

Power

Sugar Industry offer immense scope for renewal energy project on co-generation basis, which provide clean energy. Due to this the increased demand of surplus bagasse has added imputes to revenue generation. The Tariff policy for co-gen renewal power is also lucrative in comparison to conventional power based on fusel fuel. At present sugar industry in India is producing about 4000 MW of surplus power and supplying to grid. However there is potential of 8000 MW co-gen surplus power with the sugar industry.

Bio-Compost Fertiliser

The bio-compost fertilizer being produced by the company has got immense scope of demand in all major agriculture cultivation as it not only preserve the soil from excessive use of chemical fertilizer but also increase its fertility.

THREATS

• No linkage of Sugar Price with cane price

• Unreasonable high cane price in comparison to sugar selling price.

• The sugar sector is exposed to political intervention cyclical downtrend.

• Natural Calamity.

FUTURE PROSPECTS/OUTLOOK Industry scenario and outlook

India began the sugar season 2020-21 (October to September) with an opening inventory of around 10.7 MMT (Metric Million Tonnes). Sugar production for the current season is estimated at 30.8 MMT, around 4.4 MMT higher than the previous seasons production of 27.4 MMT. In spite of the Covid-19 situation, which necessitated frequent lockdowns, the domestic demand for sugar is expected to be around 26.0 MMT compared to 25.3 MMT in the previous season.

The by-products of Power and Ethanol support the sugar industry to some extent. The proactive policy of the central government to promote the production capacity of Ethanol will have far reaching positive impact on sugar industry.

Ethanol sector in India A steady rise in ethanol blending is not only likely to moderate crude oil import, saving precious foreign exchange reserves, but also encourage the use of additional cane juice and other raw materials efficiently while protecting the environment from the release of poisonous vehicular exhaust gas. The new National Biofuel Policy 2018 has fixed a target of achieving 20% ethanol blending with petrol by 2025with the government targeting to achieve the 10% milestone of ethanol blending with petrol by 2022.

Committee of the Board

The details of composition of Audit Committee and other committees of the Board of Directors alongwith the attendance thereof is provided in the Corporate Governance Report forming part hereof.

Audit Committee

The composition and attendance at the audit committee meeting are as follow:-

Name of Members	Status	Date of joining during the year	Date of leaving during the year
Mr. P.J.Bhide (Chairman)	Independent & Non-Executive	-	-
Mrs. Sulekha Dutta	-do-	-	-
Mr. Dilip Datta	-do-	-	-
Mr.N.K.Parasramka	Non Independent & Non Executive	-	-

Four meetings of Audit Committee held during the year on 26.08.2020,15.09.2020,13.11.2020 and 11.02.2021.

Information pursuant to Section 134 of the Companies Act, 2013

a. Extract of the annual return as provided under Section 92(3) of Companies Act, 2013 is enclosed -Annexure I

b. Eight meetings of the Board of Directors of the Company were held during the year on 11.06.2020, 23.06.2020, 17.08.2020, 26.08.2020, 15.09.2020, 13.11.2020, 26.11.2020 and 11.02.2021.

c. All the Independent Directors of the company have furnished declarations that they satisfy the requirement of Section 149 (6) of the Companies Act, 2013.

d. Relevant extracts of the Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided in section 178(3) of Companies Act, 2013 is enclosed - Annexure 11. We affirm that the remuneration paid to the Directors is as per terms laid out in the Nomination and Remuneration Policy of the company.

e. In the Auditors Report dated 23.06.2021, the Auditors have given Qualified Opinion in relation to the Financial Statements of the Company for the Financial Year ended 31 March 2021. The basis for qualified opinion and Boards response in relation to the said opinion are as under:-

Audit Qualification

Boards Response

Due to the continuous Losses, Companys Net Worth has been fully eroded. The Company has also defaulted in repayment of Borrowings to the banks and others. In view of the uncertainties involved, these events and conditions indicate a material uncertainty which may cast a significant doubt on the Companys ability to continue as a Going Concern.

The Company would be able to continue as a Going Concern with financial restructuring by the banks and financial assistance from the state and central government. The encouragement being given by the government toward augmentation of ethanol production by way of allowing ethanol production from B heavy molasses, Direct Juice and food grains and interest subvention loan for expansion, setting up and zero discharge equipment for Ethanol. The interest subvention loan being provided by the central government for installation of zero discharge equipment like incineration will help the company to remove the production bottleneck in distillery, increase in capacity and production and also improvement in overall profitability. The company has already been given in-principle approval of Term Loan under interest subvention from Banks for Ethanol by central government subject to fulfilment of terms and conditions.

f. There has been no materially—significant related party transactions made by the company with the promoters, the directors, the Key Managerial Personnel which may be in conflict with the interest of the company at large. The company has formulated a policy on Related Party Transactions and also on dealing with Related Party Transactions. The policy is disclosed on the website of the company (www.rigasugar.com). All related party transactions as placed before the Audit Committee has also received approval from the Board. Your Directors draw attention of the members the Note No. 25(16)(B) to the financial statement which set out Related Party Disclosures.

g. Details of conservation of energy, technology absorption, foreign exchange earnings and outgo as prescribed vide Rule 8(3) of Companies (Accounts) Rules 2014 is enclosed - Annexure III

h. The company has laid down policy on risk assessment and minimization procedures and the same is periodically reviewed by the Board. The Policy facilitates in identification of risk at appropriate time and ensure necessary steps to be taken to mitigate the risk. Brief details of risks and concerns are given in this Board Report.

i. The corporate Social Responsibility Committee has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicating the activities of the company. The Annual Report on CSR activities is not annexed herewith due to non- applicability of relevant provisions to the company due to losses.

j. In compliance with the Companies Act, 2013 and Regulation 17 of the Listing Regulations, during the year the Board adopted a mechanism for evaluating its performance as well as that of its Committee and Individual directors, including the Chairman of the Board.

The evaluation of Independent Director was carried out by the entire Board and that of the chairman and Non-Independent directors were carried out by the I ndependent directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its committee with the company.

RISK AND CONCERN

SUGAR

(a) Delay in evolving a rational Sugarcane Pricing Policy having link with sugar price is detrimental to growth of the industry.

(b) The output of sugar, an agro-based product, is influenced by climatic vagaries.

(c) Sugar Industry being cyclic in nature, the growth is hampered during downtrend.

DISTILLERY

High cost of molasses due to greater demand is matter of concern for Ethanol Blending Programme.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has adequate systems and internal control procedures to safeguard the assets of the company and to ensure maintenance of proper accounting records. There is also an Internal Audit System in place which reviews the key business and controls and also test checks on routine transactions and reports deviations. Besides, an Audit Committee periodically reviews the functioning of the entire system.

CREDIT RATING

Not applicable since from 30.09.2018 the company became NPA and continue to be NPA so far and working under holding on operation.

EMPLOYEE STOCK OPTION SCHEME

There are no outstanding stock options and no stock options were either issued or allotted During the year.

INTER CORPORATE LOANS AND INVESTMENTS

Company has not made loans, guarantees and investments covered under the provisions of Section 186 of the Act.

FIXED DEPOSITS:

The company has neither accepted nor renewed any deposit from public within the meaning of section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the year under the review.

AUDITORS

(a) Statutory Auditors

Pursuant to the applicable provisions of the Act, the members of the Company at their AGM held on 18^th September, 2017, appointed M/s. Co M/s. Salarpuria & Partners., Chartered Accountants (ICAI Registration No. 302113E) , Kolkata, as the Statutory Auditors of the Company to hold office from the conclusion of the 36^th aGm until the conclusion of the 41^st AGM. The reports given by the Auditors, M/s. Salarpuria & Partners., Chartered Accountants on the financial statements of the Company for the year ended 31 st March, 2021 form part of this Annual Report and there is qualification and reservation and adverse remark given by the Auditors in their Reports which has been explained hereinabove. The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

(b) Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Sugar activity is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed M/s. Mani & Co., Cost Accountants (Firm

Registration No 000004) as the Cost Auditor to audit the cost accounts of the Company for the financial year 2021-22. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification.

(c) Secretarial Auditor and Secretarial Audit Report

In pursuance of section 204 of the Companies Act, 2013 Mr. Rajan Singh, Company Secretary appointed as secretarial Auditors to carry out Secretarial Audit for the financial year 2020-21 Their report is annexed to this report as Annexure-IV. The contents of the said Audit Report are self explanatory and do not call for any further comments by the Board. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

DIRECTORS:

The Board of the Company has an appropriate mix of Executive and Independent Directors to maintain the independence of the Board, and separate its functions of governance and Management. As on 31st March, 2021, the Board consists of 5 members, one of whom was executive director, one non-executive non-independent director and three were independent directors consisting of one lady director.

The Board periodically evaluates the need for change in its composition and size.

The Members of the Company at the 35th Annual General Meeting (AGM) held on 30th September, 2016 approved the appointment of Mr. Dilip Datta (DIN: 00406151) as an Independent Director of the Company for a period of five years with effect from 30th September,2016. Mr Dilip Datta will complete his first term on 29th September,2021. On the recommendation of the Nomination & Remuneration Committee the Board of Directors of the Company (the Board) at the meeting held on 23rd June,2021 appointed Mr Dilip Datta as Additional Director in the Capacity of Independent Director of the company with effect from 30th September,2021 subject to approval of the shareholders in the ensuing Annual General Meeting.

Consent of the Members by way of Special Resolution is required for appointment of Mr. Dilip Datta in terms of Section 149 of the Act and Regulation 17 of the Listing Regulations. Notice under Section 160 of the Act proposing the re-appointment of Mr. Dilip Datta has been received by the Company, and consent has been filed by Mr. Dilip Datta pursuant to Section 152 of the Act.

As Mr. Dilip Datta has attained the age of 75 years on 7th September,2020 approval of Shareholders by way of Special Resolution was taken in last Annual General Meeting held on 30th December,2020 for his continuance as Independent Director for his first term

Again for his re-appointment as Independent Director for 2nd term , the Board of Directors in their meeting held on 23rd June, 2021 made recommendation subject to approval of the shareholders by way of special resolution in the ensuing Annual General Meeting.

Further pursuant to the provisions of Section 149 of the Companies Act, 2013, and Rules made thereunder, members approval by way of Special Resolution is sought at the ensuing Annual General Meeting for re -appointment of Mr. Dilip Datta as Independent Directors till 45th Annual General Meeting or 30th September, 2026 whichever is earlier.

The Company has received declaration in writing from Mr. Dilip Datta that he meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1 )(b) of the SEBI Listing Regulations, 2015.

In the opinion of the Board, Mr. Datta fulfills the conditions specified in the Companies Act, 2013 and rules made thereunder and Regulation 16(1 )(b) of the SEBI Listing Regulations, 2015, for his re- appointment as an Independent Director of the Company. The Board also considers that his association would be of immense benefit to the Company and it is desirable to avail his services as an Independent Director on the Board of the Company.

Considering the skills, experience, knowledge Mr. Datta possess and the report of performance evaluation of Mr. Datta, the Board recommended for the approval of shareholders by way of special Resolution.

For disclosure as per SEBI (LODR) Regulations , 2015, brief details, including qualification and expertise of directors to be appointed / re-appointed , has been mentioned in the Notice of the 40th Annual General Meeting of the company.

Mrs. Richa Ajitsaria (DIN09243468) was appointed as an Additional Director by the Board of Directors with effect from 29th July, 2021 and thus hold office till the date of ensuing annual general meeting. Based on recommendation are nomination and remuneration committee, the board recommend appointment of Mrs. Richa Ajitsaria an independent women Director in the next Annual General Meeting.

Mr. Nirmal Kumar Parasramka (DIN00086584) resigned from Directorship of the company on 05-05-2021 on personal ground. The Board record it deep appreciation for the service provided by him.

Declaration by Independent Directors

The Company has received declarations from all the I ndependent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Regulation 16 of the Listing Regulations. The Board of Directors confirm that the Independent Directors appointed during the year also meet the criteria of expertise, experience and integrity in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).

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 REPONSIBILITY STATEMENT:

Your Directors state that:-

(i) in preparation of the annual accounts for the year ended 31 st March, 2021 , the applicable accounting standards have been followed alongwith 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 and of the loss of the company as on 31st March, 2021;

(iii) the Directors 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;

(iv) the Directors have prepared the annual accounts on going concern basis;

(v) the Directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and are operating effectively; and

(vi) directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

PERSONNEL:

The particulars of employee as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as separate annexure attached hereto and forms part of this report as Annexure- V.

During the year under review, no complaint/case was filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE GOVERNANCE:

The Corporate Governance form an integral part of this Report and are set out as Annexure- VI to this Report. The certificate from the Auditors of the company certifying compliance of condition of Corporate Governance stipulated in Regulations 34(3) of the Listing Regulations is also annexed to Report on Corporate governance.

BUSINESS RESPONSIBILITY REPORT

Regulation 34(2) of the Listing Regulations, inter alia, provides that the annual reports of the top 1000 listed entities based on market capitalization (calculated as on March 31st of every financial year), shall include a Business Responsibility Report. The company do not fall under this category.

KEY MANAGERIAL PERSONNELS

In compliance of provisions of section 203 of the Companies Act, 2013 the following persons were the key managerial personnel of the company during the year:

(i) Mr. O.P.Dhanuka, Chairman & Managing Director

(ii) Mr. B.K.Bhartia, Company Secretary .

(iii) Mr. J.K.Pachisia CFO,

The other details pertaining to KMP of the company, their appointment/cessation during the year under review and their remuneration have been provided in the Extract of Annual Return annexed hereto and forming part of this report.

Code of conducts and ethics

The Board of company has adopted a Code of Conducts and ethics for the Directors and Senior Executives of the company. The code is available on the companys website at www.rigasugar.com.

Significant & material orders passed by the regulators

During the year under review, no significant and materials orders were passed by the Regulators or courts or Tribunals impacting the going concern status.

Whistleblower Policy

The company has in place a whistleblower policy to deal with unethical behavior, victimizations, fraud and other grievances or concerns, if any. The Whistleblower policy can be accessed on the companys website www.rigasugar.com.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees, etc.) are covered under this policy. No sexual harassment complaints were received during the year 2020-21.

Risk Management Policy

The Company has Risk Management committee of Directors to have a system of Risk Management, inter alia, to review it periodically.

Policy for Preservation of Documents

The Policy for preservation of documents are stated in website of the company www.rigasugar.com.

Material changes and commitments affecting the financial position of the company after 31st March, 2021 Material Changes and Commitments

Except those disclosed in this Annual Report, 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, 2021 and the date of this Report. The impact of COVID 19 pandemic has not been material on the financial performance of the Company. However there was delay in compliance due to non-filing of timely return and result.

Subsidiaries, Joint Ventures or Associate Companies

There is no subsidiary, Joint Venture or Associate of the company under meaning of Companies Act, 2013.

LISTING OF EQUITY SHARES:

The Shares of the Company are listed on The Calcutta Stock Exchange Ltd. and BSE Ltd. The Company has paid Listing Fees to BSE Ltd for 2021-22.

ANNEXURES FORMING PART OF THIS REPORT OF THE DIRECTORS

The Annexure referred to in this report and other information which are required to be disclosed are annexed herewith and forms a part of this report of the Directors:-

Annexure	Particulars
I	Extract of the Annual Return as per form MGT-9
II	Policy on selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity
III	Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo
IV	Secretarial Audit Report
V	Particulars of Employees
VI	Corporate Governance Report

APPRECIATION:

Your Directors express their appreciation for the support and contribution by Cane Growers, Bankers, Central and Bihar State Government, Suppliers, Customers and the valuable services rendered by the Employees at all levels.

	For and on behalf of the Board,
Kolkata,	O. P. Dhanuka
Dated : 6th August, 2021	(DIN:00049947) Chairman & Managing Director