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 31st March, 2019.

FINANCIAL&OPERATIONALRESULTS (Rs. in Lacs)
Financial Year 31stMarch, 2019 Financial Year 31stMarch, 2018
FINANCIALRESULTS
(a) GrossTurnover 15,487.31 9,799.04
(b) Operating Profit Before Finance Cost & Depreciation (2,189.13) 155.75
(c) Finance Cost 1,963.44 1,765.35
(d) Cash Accruals (4,152.57) (1,609.60)
(e) Depreciation &Amortization 490.55 471.74
(f) Profit (Loss) before extraordinary items (4643.12) (2,081.34)
(g) Extraordinary Item of Exp./Income --
(h) Profit (Loss) Before Tax (4,643.12) (2,081.34)
(i) Provision forTax
- DeferredTax --
- Income Tax of earlier year -- 4.23
(j) Profit (Loss) After Tax (4,643.12) (2,085.57)
(k) Other comprehensive Income (net of tax) (1.66) (53.11)
(l) Total Comprehensive Income for the year (4,644.78) (2138.68)

DIVIDEND:

In view of losses company is unable to pay Dividend.

OPERATIONALRESULTS

Sugar Unit

Thecomparativefiguresinregardtodurationofseason,canecrush,sugarrecoveryandproductionfortheyearended31stMarch, 2019 vis -a-vis previous financial year ended 31st March, 2018 in respect of the Sugar Factory of your Company are given below:-

Financial Year 31stMarch, 2019 Financial Year 31stMarch, 2018
1. Duration of crushing (gross days) 110 114
2. Cane crushed (Lac Qtls.) 35.28 44.72
3. Recovery(%) 8.78 8.79
4. Production (Lac Qtls.) - 3.10 3.93

The sales of sugar unit increased by 54% from Rs.82.56 Cr. to Rs. 127.52 Cr.

The crushing season for 2018-19 Startedon 20th December 2018 and was extended till 16th May, 2019 against 4thApril last year. Due to the extreme hot weather in the months of April and May, the recovery of sugar was abysmally low & at 8%. During the months ofApril and May, 2019 the recovery falls below 5%.The labour problems and strike during season period also contributed to adverse working and loss of recovery of sugar and thus resulting higher cost of production.

The state government had promised to compensate for the loss due to the extended running period of sugar factory during the scorching summer heat and the company has also made a claim against the same. However, company is awaiting the release of compensation from state government.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. 29 per kg which was subsequently increased to Rs.31 per kg. 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.

ContinuingLosses

During last 8 years company has incurred Loss of Rs. 102 Cr. but still made repayment of Term Loan of Rs. 79 Cr. and interest of Rs. 127 Cr., whereas fixed assets investment were Rs. 48 Cr as enumerated below:-

Rs. in Lacs

2011-12 2012- 13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Total
NetProfit(Loss) (524) (350) (272) (1,442) (506) (409) (2081) (4,643) (10,227)
Term Loan Repayment 1,432 492 477 1,066 786 1,205 1,410 1,039 7,907
PaymentofInterest 1,571 1,559 1,318 1,607 1,435 1,502 1,765 1,963 12,720
FixedAssetsInvestment 702 209 546 412 195 1,325 1,114 342 4,845

Due to continuous losses for last 8 years there are cane price arrears to farmers. However the company has totally repaid the sugar cane price till last season 2017-18.

Since last few years your company is facing natural calamities one after another. The Phalin cyclone in October 2013, the Hudhud in October 2014 stranded the growth of sugarcane as well as reduced the sugar recovery considerably. Again company faced devastating earthquake inApril 2015 and May 2015 and lost crores of rupees.TheState Government had given assurance to help and visited the area but no compensation was granted. In August 2017 heavy flood also caused huge damage to our plant and sugarcane.

The incentive claimas declared by the State Government and other receivable from state government is 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 previous year, 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 asagoingconcern.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.

The state government has announced cane price subsidy of Rs. 12.50 per qtl. of sugarcane for the season 2018-19.

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

CENTRALGOVERNMENT

(a) Soft Loan from Bank as per the Central Government scheme for companies which have become an NPA, by waiving the prerequisite of State Guarantee.

(b) The central government to delink prior export obligation with cane price subsidy release and pay to the farmer the subsidy amount of Rs.13.88 per qtl. directly.

(c) As a help to the weak and NPAsugar factories and also sugar factories whose recovery is lower than 9.5%, a higher allocation of Buffer Stock shall be assured.

(d) SDF Loan Restructuring - The company became a totally weak and Sick Sugar Undertaking and has become an NPA from 30th September, 2018. As per SDF Rules our company is eligible for restructuring of the Loan by way of :-

(a) extension of repayment period;

(b) waiving of all penal and additional interest;

(c) providing loan for clearance of cane price arrears to farmers; (d) loan for plant rejuvenation and balancing ; (e) for cane development loan; and (f) loan for Ethanol and Power Plant (e) Ethanol Loan as per Central government scheme.

STATEGOVERNMENTOFBIHAR

(a) Soft Loan of Rs.40 Cr. at 4% rate for 10 years for payment of Cane price arrears

(b) For the purpose of getting Soft Loan from Bank of Rs.11 Cr. as per the Central Government Scheme, the company requires Guarantee from the State Government as we are an NPA Account.

(c) Help farmers directly for procurement of High Yield Variety of cane seed of CO 238 for 2 years.

(d) Compensation towards running sugar plant in scorching heat ofApril 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.

Central Government action during the year FRP: The FRP for 2018-19 was fixed at Rs. 275 per quintal against last year Rs. 255 per qtl. linked to a basic recovery of 10% subject to a premium of Rs. 2.75 per quintal for every 0.1 percentage point increase above that level.

In Bihar the cane Price for the season 2018-19 remained at same at Rs.290 per qtl. for normal varieties, Rs. 265 per qtl. for lower varieties and Rs.310 for premium variety. Transport rebate on out center cane is at Rs.20 per qtl.

MIEQ Scheme: The Central government with a view to facilitate export of sugar during the season 2018-19 thereby improving the liquidity position of the sugarmillstoenablingthemtoclearcanepricearrears of farmers for sugarseas on 2018-19,announced a mill-wise Minimum Indicative Export Quotas (MIEQ) totaling 50 Lacs tonnes, for the sugar season 2018-19.

Financialassistance:Inordertohelpsugarmillsclearfarmercanedues,theGovernmentdecidedtoprovidefinancialassistance @ Rs.13.88 per quintal of cane crushed in sugar season 2018-19 to sugar mills to offset their cost of cane. The assistance shall be paid directly to farmers on behalf of the mills and be adjusted against the cane price payable due to farmers against a Fair and Remunerative Price (FRP), including arrears, relating to the previous years, if any. However the pre-condition of export of minimum quantity of sugar is working as deterrent because on export of sugar loss has to be beared by the mill because international price is much below than domestic price. Many sugar companies are not able to bear such loss upfront including our company.

FloorPriceofSugar:The Government set floor price of sugar at Rs. 29 per kg below which sugar factory cannot sell sugar, which has been increased to Rs. 31 per kg. However the cost of production of sugar is between Rs. 3,600 to Rs.3,900 per qtl.

Stock holding limit on Sugar Mills: The government continued monthly stock holding limits on sugar mills to control sugar availability in domestic market so as to improve the realization. This ensures that market is not to be flooded with sugar and act as stabilizing factor.

Package for Ethanol Production: The Government announced Package of Rs.8,500 Cr. which includes providing subsidized loans for ethanol production capacity. It will encourage setting up of more distilleries in the country over the next 3 years and will help in diverting some of the surplus sugarcane into ethanol and reduce surplus sugar in the long run.

Buffer Stock creation: The government created buffer stock of 30 lac MT from 1st July, 2018 for a period of one year.

Transport Rebate on MIEQ: To facilitate the export of sugar in the 2018-19 season, improving the liquidity of sugar mills to help clearcanepricedues,the government notified aschemefordefrayingtheexpenditure towards internal transport,freight,handling and other charges.

Ethanol from B-heavy molasses and direct cane juice: For the first time, the government permitted ethanol to be produced from B-heavy molasses and direct sugarcane juice.

GST: The government reduced GST on ethanol from 18% to 5%

In spite of all the measures, cane arrears on all India basis stood at Rs. 17,000 crore.

Sugar Scenario

Sugar production for the season 2018-19 surpassed all previous record. The market anticipated the higher production well in advanceandpricebegantodeclinefrombeginningofseason2018-19 and continued unabated following every upwardproduction revision. The sugar industry is in such precarious condition where the sugar realization is not even covering cost of sugarcane itself. This has brought a situation where the countrys sugar industry is facing serious and unprecedented cash flow mismatch resulting in mammoth cane price arrears.

TheAll India sugar price and sugarcane price announced by Central Government as per FRPfor last 9 years are depicted below:-

Year Sugar Price Sugarcane Price (FRP)
2009-10 2,951 129.84
2010-11 2,727 139.39
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

The sugar price during last 9 years increased by 4%, whereas the sugarcane price increased by 113%.

DistilleryUnit Financial Year 31stMarch, 2019 Financial Year 31stMarch, 2018
1. Production of Ethanol from Molasses (Lac BL) 71.70 47.46
2. Supply of Ethanol (Lac BL) 81.35 49.90

Ethanol

The Distillery of the company run for higher nos. of days of 157 days against 99 days last year as against stipulated 270 days working.Duringtheyear38daysremainedclosedduetoarbitrarynon-renewalofDistilleryLicensebyStateDistrictAdministration and also 56 days closure due to illegal closure by CPCB on the pretext of non-installation of CPU although company have full proof proven and certified system of Zero discharge.

With better margin coupled with improved sale price of ethanol and also lower cost of molasses procurement from other sugar factories the working of distillery was better than last year. With installation of CPU its working is expected to improve further.

Co-Gen of Power

TheCompanyissupplyingsurpluspowerupto3MWfromitsco-generationplant.Thisforwardintegrationcontributetothebottom-line of the company .

Bio-CompostFertiliser

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.

SEGMENT-WISEPERFORMANCE:

During the reporting period sugar segment contributed 79 percent of net sales of the company whereas Distillery accounted for 21percent.The company identifiedt wobusinesssegmentsinline with the Accounting Standardon Segment Reporting,Segment-wise Revenue, Results and Capital Employed as stated in Note No.25 (5) of financial statement enclosed with theAnnual Report.

INDUSTRYSTRUCTURE&POLICY

Structure SugarIndustry,isseasonalinnatureanddirectlydependentonmonsoonforavailabilityof adequate sugarcane.Indiais 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 had led to setting up ofAlcohol/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 whichrunanestimatedRs.10,000croresannually.The Income tax also contributes to the government coffer.Industryaccelerates 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 onAgricultural Costs & Prices. However many state government fixes higher cane price for the sugar factories in their state. CACP gives recommendation of cane price , but government do not implement due to political consideration.

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.

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. Untimely decision of government of import and export of sugar hampers the domestic sugar market sentiments. Timely decision of import and export of sugar based on fixed parameter is utmost necessary.

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, "Asugar 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 requiredforfertilityoftheland. The saidbio-compostissoldtofarmerswhosupplysugarcanetocompanyandalsotootherfarmers 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 is also installing CPU.

OPPORTUNITIESANDTHREATS

OPPORTUNITIES

Sugar

India is largest consumer and second largest producer of sugar in the world. The consumption of sugar is on increasing trend with the increase in consumption 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

Themandatoryprovisionofethanolblendingof10%havestrongsupportforgrowthofsugarindustry.Ethanolproductionimproves oil security and contributes to environmental protection. The Government is further considering to increase the ethanol mixing with petrol at 20% 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. 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. TheTariff 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-CompostFertiliser

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 increase in cane price in comparison to sugar selling price.

• The sugar sector is exposed to political intervention.

• Natural Calamity.

FUTUREPROSPECTS/OUTLOOK

As per ISMAs latest estimates, production of sugar for the season 2018-19 estimated at 328 Lacs MT and consumption of 260 Lac MT. With opening balance of 107 Lac MT and estimated export under MIEQ of hardly 30 Lac MT, the closing balance in the current season is estimated to be around 145 Lac MT, which is equivalent to 6.5 months of consumption and is very high in comparison to 3 months ideal norms.

The international sugar price is much lower than domestic cost of production and thus there is loss on export.

However 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. Against a requirement of 3300 million litres of ethanol based on 10% ethanol blending, ethanol supply contracts were signed for 2477 million litres for the ethanol supply period 2018-19, which includes 465 million litres produced from B-heavy molasses. If the quantity as contracted is successfully blended, about 7.2% of petrol consumption would be substituted by the environment friendly bioethanol. The achievement is significant as the new NationalBiofuel Policy 2018 has fixed a target of achieving 20% ethanolblending with petrolby 2030 withthegovernmenttargeting 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 is provided in the Corporate GovernanceReportformingparthereof.

Audit Committee

The composition of the audit committee meeting are as follow:-

Name of Members Status Date of joining during the year Date of leaving during the year
Mr. S. K. Goenka (Chairman) Independent&Non-Executive - 06.04.2018
Mr. Sarad Jha (Chairman) -do- 06.04.2018 -
Mr. Suyash Borar -do- - 28.03.2019
Mr.N.K.Parasramka NonIndependent
& Non Executive 06.04.2018 -

Mr. Sarad Jha left on 11.04.2019 and Mr.P.J.Bhide and Mrs. Sulekha Dutta joined as Chairman and Member respectively on 12.04.2019.

Four meetings of Audit Committee held during the year on 08.06.2018, 14.08.2018, 14.11.2018 and 14.02.2019.

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. Six meetings of the Board of Directors of the Company were held during the year on 06.04.2018, 08.06.2018, 14.08.2018, 22.10.2018, 14.11.2018 and 14.02.2019.

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 CompaniesAct, 2013isenclosed- AnnexureII.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. There is no qualification in the auditors report. The explanation of the Board on reservation, adverse remark and disclaimer made by the auditor in his report and by Company Secretary in practice in the secretarial audit report are explained.

f. There has been no materially-significant related party transactions made by the company with the promoters, the directors, theKeyManagerial Personnel which maybe inconflictwiththeinterestofthe 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 theAudit Committee has also received approval from the Board.Your Directors draw attention of the members the Note No. 25 (9) 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 CompaniesAct, 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 Independent directors.

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

RISKANDCONCERN

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

Since the movement and price of Ethanol is controlled by the Government, it has risk of adverse Government Policy, if any.

INTERNALCONTROLSYSTEMSANDTHEIRADEQUACY:

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.

CREDITRATING

On being default CARE decreased credit rating of the companys Long-term Bank facilities to CARE D and Short Term Bank facilities from to CARE D due to delay in repayment of Loan. The Loans of the Company from Banks become NPA from 30th September 2019.

FIXEDDEPOSITS:

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

AUDITORS

(a) StatutoryAuditors

Pursuant to the applicable provisions of the Act, the members of the Company at their AGM held on 18th 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 36th AGM until the conclusion of the 41st AGM. The reports given by the Auditors, M/s. Salarpuria & Partners., Chartered Accountants on the standalone financial statements of the Company for the year ended 31st March, 2019 form part of thisAnnual Report and there is no qualification, but there is reservation, adverse remark or disclaimer given by theAuditors in their Reports which are explained in the Notes. The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

(b) CostAuditors

Pursuant to Section 148 of the CompaniesAct, 2013 read withThe Companies (Cost Records andAudit)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 2019-20. 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 M/s H.M. Choraria & Co., Company Secretaries were appointed as secretarial Auditors to carry out Secretarial Audit for the financial year 2018-19. Their report is annexed to this report as Annexure-IV.

DIRECTORS:

The Board of the Company has an appropriate mix of Executive and Indipendent Directors to maintain the independence of the Board, and separate its functions of governance and Management. As on 31st March, 2019, the Board consists of 5 members ,oneofwhomwasexecutivedirector,onenonexecutivenonindependentdirectorandthreewereindependentdirectorsconsisting of one lady director.

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

Mr. S.K.Goenka, Mr. N.C.Majumdar, Mr. Suyash Borar and Mr. Sarad Jha left the Board on 06.04.2018, 14.08.2018,28.03.2019 and 11.04.2019 respectively. The Board expressed there appreciation for valuable advices given by the outgoing Director during their tenure.

Mr.Purushottam Jagannath Bhide was appointed as Independent Director (Additional Director) of the Company with effect from 12.04.2019 subject to approval of Shareholders by passing special resolution.

On recommendation of Nomination and Remuneration Committee , the Board of Directors , in their meeting held on 12.07.2019, re appointed Mr. O.P.Dhanuka as Managing Director of the Company for a period of 3 years with effect from 13.08.2019, subject to approval of the Shareholders of the Company by passing special resolution.

Mr.Nirmal Kumar Parasramka , Director, who retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re - appointment.The Board recommends his re-appointment.

All Independent Directors have given declaration that they meet the criteria of Independence as laid down under section 149 (6) of the Companies Act, 2013 and Regulation 16 of the Listing Regulations.

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 thirty eighth Annual General Meeting of the company.

DIRECTORSREPONSIBILITYSTATEMENT:

Your Directors state that:-

(i) in preparation of the annual accounts for the year ended 31st March, 2019 , 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, 2019;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisionsoftheCompaniesAct,2013forsafeguardingtheassets of the Companyandforpreventinganddetectingfraud 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) ofthe Companies (Appointmentand Remuneration of Managerial Personnel) Rules, 2014 are given as separateannexure 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.

CORPORATEGOVERNANCE:

The Corporate Governance form an integral part of this Report and are set out asAnnexure- 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.

KEYMANAGERIALPERSONNELS

In compliance of provisions of section 203 of the CompaniesAct, 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. S.Prasad, Company Secretary . Mr. S. Prasad resigned with effect from 01.04.2019.

(iii) Mr. R.N. Sharma CFO, Mr. R.N.Sharma resigned with effect from 20.01.2019.

(iv) Mr. B. K. Bhartia was appointed as Company Secretary with effect from 12th July, 2019.

(v) Mr. S. R. Mullick was appointed as CFO of the Company with effect from 20th June, 2019.

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 orTribunals 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 anAnti Sexual Harassment Policy in line with the requirements ofThe 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 2018-19.

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, 2019

Due to record production the Sugar price continue to show southward trend during current financial year so far.

Subsidiaries, Joint Ventures or Associate Companies

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

LISTINGOFEQUITYSHARES:

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

ANNEXURES FORMING PART OF THIS REPORT OF THE DIRECTORS

TheAnnexure 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 BoardDiversity
III Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo
IV Secretarial Audit Report
V Particulars of Employees
VI CorporateGovernanceReport

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 : 12th July, 2019 (DIN: 00049947)
Chairman & Managing Director