To the members of Simbhaoli Sugars Limited
Your directors have pleasure in placing the directors report together with management discussion and analysis report for the financial year ended on March 31, 2015.
Management Discussion and Analysis
International Sugar Industry
The world sugar production is expected to reach at 182.6 million metric tonnes raw value (mmtrv), having a surplus of 3.39 (mmtrv) from an earlier expected small deficit or balanced year for the sugar year 2014-15 due to higher cane crushed in India, Center-South Brazil and Thailand. There is a likely fall in production from China and South Africa. In Brazil over all sugar production is expected to be higher by about 2.0 mmt, with about 43% of cane being utilized for sugar production, and balance for making ethanol. Despite, sugar prices in dollar terms are amongst their lowest in six years; weakness in Brazilian currency (Real) has improved the return from selling sugar leading to higher expectation for sugar output in Brazil. (Source: Kingsman, CONAB and UNICA data).
During the same period, Thailand sugar production at 11.04 mmtrv is comparable to the year 2013-14, when a record sugar production of 11.29 mmtrv was achieved. Indian production is also seen up by 3.8 mmtrv to 29.9 mmtrv playing a pivotal role in influencing the global market. Thus, the world remains in surplus for the fifth consecutive year.
Agri commodity prices index has declined by nearly 34 per cent in the year 2014-15, Sugar also posted a decline of 25 per cent to trade to $358 a tonne in last one year. The sugar prices in the year 2014-15 remained bearish, with a low of less than 12 cents per pound in Mar 2015. The white sugar premium also remained low, but for marginal rise in May 2015 on account of Chinese import demand.
Domestic Sugar Industry Scenario
The countrys sugar production is likely to reach at 28 mmt (white value) in the current sugar season with sugar surplus of about 10.2 mmt by the end of the year, which is on the higher side. Sugar industry in India is going through unprecedented crisis due to the mismatch in the price of raw material i.e. sugarcane and the finished product. The wide gap between the high cost of sugarcane and low realization from sugar, have severely impacted the financial conditions of the sugar mills. The production has been consistently surpassing the domestic consumption and lower international prices are not providing enough opportunity for consistent exports.
(in mmt)
| Particulars /Sugar Year | 2013-14 | 2014-15 E | Change % |
| Opening Stock as on 1st Oct | 9.3 | 7.5 | (24.0) |
| Production during the Season | 24.4 | 28.0 | 12.9 |
| Imports | 0.10 | - | - |
| Total Availability | 33.8 | 35.5 | 4.8 |
| Consumption | 24.1 | 24.8 | 2.8 |
| Exports | 2.2 | 0.5 | - |
| Closing Stock as on 30th Sept | 7.5 | 10.2 | 26.5 |
| Stock as % of Off-taker | 31.1 | 41.1 | - |
Source: ISMA and SSL estimates
Sugar production in Maharashtra, the countrys leading producer reaches at an all-time high of 10.35 mmt in this year. The production in Uttar Pradesh and Karnataka is expected to reach at 7.01 mmt and 4.85 mmt respectively.
Due to weak international prices, export in the current sugar year has been limited. Government policies like increase in import duty of sugar from 25% to 40% and extension of incentive scheme for marketing and promotion services of raw sugar at revised rate of Rs. 4000/MT, did not help to regain export so far.
Price Trend
Surplus stock in domestic and global markets has depressed sugar prices, both in the global and domestic markets. One of the major reasons for the crisis in 2014-15 was the fall in global crude oil prices along with a decline in the Brazilian currency (Real). Lower crude price means Brazils mills would divert less sugarcane for producing ethanol and the extra sugar resulting from this, combined with a weak real, has brought down the international prices, making it further difficult for India to export. As a result, ex-factory sugar price has fallen to a lower level.
With higher sugar production in the current season, against the estimated consumption of 24.8 mmt, carryover stocks at the beginning of 2015-16 season is estimated at 10.2 mmt, 4.2 million tones higher than the normative requirement of 6 mmt which, has worsen the conditions of Indian sugar industry.
Sugarcane
The fair and remunerative price (FRP) of sugarcane for sugar season 2014-15 was fixed at Rs. 220 per quintal, linked to basic recovery at the rate of 9.5%, subject to premium of Rs.2.32 per qtl for every 0.1 percentage point increase in recovery above that level.
Major producers such as Uttar Pradesh, Tamilnadu, Haryana, Punjab and Uttarakhand continued with their sugarcane pricing policies as per the past practices of announcing SAPs, whereas states like Maharashtra and Karnataka are considering rationalization of their sugarcane pricing by linking it to the sugar prices. In the current year, sugar mills are finding it difficult to pay even the FRP and this mismatch between sugar and sugarcane prices has led to mounting arrears to be paid to sugarcane farmers, which stands at INR 2100 crore at the end of April, 2015.
The monsoon in India is stated to be below normal for a second year as the event develops. Australian scientists have forecasted a substantial El Nino weather phenomenon for 2015, while it increases the risk of drought in Australia, its not likely to affect India. Sugarcane is still more lucrative to farmers than other crops and despite the accumulating cane arrears, preliminary data are showing 0.2 percent increase in the cane acreage.
As per third advance estimates for sugar year 2014-15, production of sugarcane is estimated at 357 mmt, which is higher by 4 mmt as compared to last year. As per the crop coverage in the kharif season for 2015-16 released by Agriculture Ministry in May 2015, 40.18 lakh hectares (LH) had been sown across the key sugarcane growing States in the country against 39.98 LH during the corresponding period of the previous year.
Domestic Ethanol Industry
Ethanol Blended Programme (EPB) was launched in the year 2003, which was extended to the entire country except NE States, J&K, A&N Islands and Lakshdweep, w.e.f, the year 2006. Oil Marketing Companies (OMCs) were directed to sell 5% ethanol blended petrol, subject to commercial viability. The national policy on bio-fuels was also notified by the Government in the year 2009 with the objective to ensure that minimum level of bio-fuels is readily available to meet the demand at any given time.
The contracts made during 2013-14, were valid till May 2015 and about 83% of the quantity were lifted out of 68.20 crore ltrs contracted during that year.
For the 2014-15 season, OMCs have come out with tenders for ethanol in July 2014, January 2015 and March 2015 and have sought around 156 crore litres of ethanol, against that the procurement for 80.70 crore litres were finalised. However, only 12.90 crore litres were lifted at the year-end, which is 16% of the quantity accepted. The Government, sugar mills and OMCs are making constant efforts for carrying on the blending program.
In December 2014, Government replaced procurement of ethanol based on a benchmark price decided by OMCs by a new mechanism of uniform price of ethanol declared for each sugar year. The delivered price of ethanol has been fixed in the range of Rs. 48.50 per litre to Rs.49.50 per litre, depending upon the distance of sugar mill from the depot/ installation of the OMCs. The government has removed the excise duty on ethanol supplied for blending for 2015-16 onward. This would increase in net realization by around Rs.5/litre of ethanol. This step may incentivize the composite sugar and ethanol producers to divert B-heavy molasses or cane juice into ethanol.
Government Policies
Policy related decisions taken during the year under review are:
(i) July 2014: With a view to increase production of Ethanol, Central Government is providing soft loans up to 40% of the project cost to the sugar mills from SDF for setting up ethanol projects.
(ii) December 2014: The Cabinet Committee on Economic Affairs (CCEA), has given its approval to ratify the methodology adopted to recalculate the export incentive rate.
(iii) January 2015: FRP of sugarcane for 2015-16 sugar season has been fixed at Rs. 230 per quintal, linked to basic recovery rate of 9.5% subject to premium of Rs.2.42 per qtl for every 0.1% increase in recovery above that level.
(iv) February 2015: Continuation of the incentive scheme for marketing and promotion services of raw sugar production during current sugar season 2014-15 (Oct-Sept) for a qty upto 1.4 mmt at Rs.4000 per MT.
Business description: Operating capacities
Simbhaoli group has three sugar complexes located at Simbhaoli (Western Uttar Pradesh), Chilwaria (Eastern Uttar Pradesh) and Brijnathpur (Western Uttar Pradesh), having an aggregate crushing capacity of 19,500 TCD and refining capacity of 3,00,000 mt of raw sugar annually.
(in mmt)
| Facilities | Cane Sugar (TCD) | Raw Sugar Processing (TPD) | Alcohol/ ethanol (KLD) | Power (MWH) | Bio- Manure (MMTday) |
| Simbhaoli (Western UP) | 9,500 | 850 | 90# | 34$ | 17 |
| Brijnathpur (Western UP) | 4,000 | 600 | 60 | 8 | 9 |
| Chilwaria (Eastern UP) | 6,000 | 600 | 60 | 38$ | 9 |
| Total | 19,500 | 2,050 | 210 | 80 | 35 |
#Simbhaoli Spirits Limited, subsidiary company $Simbhaoli Power Private Limited, subsidiary company
The sugar business is integrated with alcohol and power. The co-generation units of Simbhaoli Power Private Limited (SPL), a subsidiary company, located within the Simbhaoli and Chilwaria complexes are capable to generate bio-mass based power aggregating to 72 mwh for supplying the power for the captive consumption of the sugar plants and sale of surplus power to the UP State grid under the power purchase agreements. Simbhaoli Spirits Limited, a wholly owned subsidiary company is capable to produce 90 Kl/day of potable alcohol and ethanol.
Sugarcane price arrears
The Uttar Pradesh based sugar companies have been facing financial difficulties on account of high sugar cane prices and low realization of sugar and high finance cost during the last 4 years. This disparity has resulted in huge cane price arrears at the end of the 2013-14 crushing season, which has been placed before the Honble High Court of the State in a legal matter. The Honble Court, while giving importance to the payment of cane price to the farmers, directed the State to take appropriate steps under the State cane laws to recover the outstanding cane payments as statutory liabilities. In implementation of the order, and without considering the related economic factors, the State directed the mills to sell the sugar stock and initiated multiple coercive actions against the Company and its officers. A large amount of sugar stocks has been sold under the instructions of the State administration, which brought down the sugar prices, even below basic cost of production leading to further delays in cane price payment. The sugar prices have come down to an extraordinary low level, which is the lowest in last five years.
The Company is facing day-to-day issues resulting from pending cane payment. The coercive actions by the local administration often affect the operations, dispatches of sugar and inconsistency in cash flows.
During the season, there has been substantial diversion of sugarcane to other sweeteners because of delayed payments to the farmers. The entire sugar industry has been facing financial crunch on account of over production, high cost and mounting pressure of cane price payments. However, the Companys current sugar operations have improved over the previous seasons and are expected to improve further in the coming season on account of the development initiatives taken.
The Company has paid sugarcane price dues for the sugar year 2013-14 by selling sugar at current market prices. The sugar prices can improve in future once large physical export of sugar takes place.
Outstanding dues of the financial institutions
The Company has been facing difficulties in making repayment of principal amounts due on bank loans and interest thereon, due to extreme liquidity crunch. The Honble High Court has directed priority payment of the cane price over the bank dues, which has led to the security dilution for certain banks for the working capital financing. Meanwhile, the Company is taking all possible steps to restructure the banks dues and realign its obligations with the revenues. A Restructuring Scheme has been proposed, which provides to dispose off some of the non-current assets and commitments from the promoters. The lenders under the leadership of the State Bank of India (SBI) have appointed PNB Investment Services Ltd, as Investment Advisors, who based on the Techno Economic Viability (TEV) study affirmed that the businesses of the Company are viable, and it is capable to pay its debts post restructuring exercise. The Company is also in the process of restructuring liabilities of the lenders under the farmers tie-up arrangements. One of the lenders, who had assisted under the tie up arrangement, has moved to Debt Recovery Tribunal (DRT) against the Company.
Business Restructuring and Scheme of Amalgamation
The business of the Company, mainly pertaining to the Sugar, has been incurring cash losses, which has led to erosion of its net-worth. The current liabilities are higher than the current assets. In previous years, the Company has initiated a number of steps, including business and financial restructuring of its divisions for de-risking the businesses. A Scheme of Amalgamation of the Company with Simbhaoli Spirits Limited (SISPL), its wholly owned subsidiary company (the Scheme), as approved by the Board of both the companies, was filed with the Honble High Court of Judicature at Allahabad (the Court). With effect from the Appointed Date, the entire business and undertaking of the Company, shall be and stand transferred to and vested in or be deemed to have been transferred to and vested in SISPL, as a going concern without any further act and deed. The shareholders and unsecured creditors of the Company have approved the Scheme on September 20, 2014. The meetings of the secured creditors of both the companies have been convened by Honble Court on July 11, 2015, and the Company and SISPL have also received the letters of no objection from secured creditors, having substantial values. Pending sanction of the Scheme by the Court, no financial effect has been considered in these financial statements and further, as advised by eminent legal counsel, considering the pendency of the Scheme and resultant positive net worth after sanction of Scheme, no further steps as applicable to the sick companies have been initiated.
Distillery Operations
In the year 2013-14, the operations of the Simbhaoli distillery of Simbhaoli Spirits Limited, a wholly owned subsidiary company were suspended as the pollution control authorities have withdrawn their consent for the year 2014 on account of non-fulfillment of certain conditions of their consent. The Honble National Green Tribunal (NGT), Principal Bench, New Delhi in its order had issued directions for mandatory compliance of certain conditions on effluent discharge system before re-start of the distillery operations. NGT has also imposed monetary penalty on the Company.
The Company has taken all the requisite steps and again applied for the necessary consents from the Pollution Control Boards to re-start the plant. Your directors are confident that, the Company is expected to resume operations soon on receipt of necessary consent from the Uttar Pradesh pollution Control Board (UPPCB) and other regulatory authorities.
In spite of the difficult situation being faced by the Company as part of sugar industry, with the strengthening of operations, improvements in efficiencies, expected re-start of the distillery plant, expansion of power business and the expected measures to be taken by the central/state governments for the sugar industry as a whole, these financial results have been prepared by the Company on a going concern basis.
Branding
The Company has been consistent in developing its sugar brand, Trust. The sales and marketing infrastructure development exercises for distribution through modern retail and wholesale trade channels have been further strengthened during the year. The market area of Sipp fruit drink mix has been further expanded. Trust branded sugar sachets have created vast acceptability and leadership in the hospitality industry. Appropriate brand communication investment was carried out to spread brand awareness, and consumer trials. Due to the intervention of the State administration in selling and dispatch of the sugar and liquidity constraints, there has been a mismatch in the supply commitments to the specialty sugar customers, which has affected the expected growth of the specialty sugar business.
International Trading
During the year, the international trade was limited due to weak international prices vis--vis domestic market. However, the Company has continued trade with selected markets like Nepal, Canada, Pacific Islands, Seychelles and Middle-east. Trust branded sugar has been receiving favorable response from the destinations like Canada and pacific islands. In pacific islands, volume of retail sugar doubled to 240 MT in FY 2014-15. L-Grade sugar has established unique place in Canadian market and its volume is growing every year.
The Company has exported 6,281 MT of refined sugar under the advance authorization scheme (AAS) and there is a pending obligation of 11,616 MT. During the year, the Company has also exported 1352 MT under Open General License Scheme.
Human resources
The Company has a committed and motivated work force. It upholds the fundamental principles of human and workplace rights in all its businesses. A number of employees participation and welfare programs have been carried on during the year. Keeping the philosophy of continuous training and job improvements, the Company has imparted 570 man days of training other than on the job trainings to its employees during the year. The relation between the management and employees continued to remain cordial at all the locations. The manpower has also been rationalized with the transfer of employees to diversified businesses.
The Company has always been vigil against the sexual harassment and a system is in place under which, the employees can write their complaint in this regards. No such complaint has been received during the year.
SWOT
The areas of operations of the Company and its subsidiary companies are well diversified, with multi products and services spanning over a number of geographical locations. Each of the business segments has its own strengths and weaknesses and is subject to a variety of opportunities and threats. The management is consistently strategizing and planning about the re-structuring exercises for the business revival. The group has the following SWOT attributes broadly:
Strengths
1. Sugar units are located in the sugarcane-rich Indian state of Uttar Pradesh
2. Well irrigated sugarcane area, which is not much dependant on weather pattern
3. Integrated facilities to produce white sugar using sugarcane and refining of raw sugar
4. High quality of sugar with improved yields; attracting premium in domestic and global markets
5. Producing all varieties of sugars including pharmaceutical-grade and specialty sugars
6. Presence in branded and packaged segment which has large growth
Weaknesses
1. Highly volatile market prices of the sugar
2. Cyclical nature of the industry, which is subject to natural and economic cycles
3. Highly leveraged with high interest and fixed costs
4. Lack of parity between cost of production and sale values of sugar resulting in un-paid sugarcane price position
5. Brijnathpur sugar unit is not an integrated sugar complex
6. Continued legal cases/litigation and adverse orders from the Court/Tribunals
Opportunit ies
1. To command high sugarcane recovery and yields in its reserved zone
2. To further improve sugarcane productivity and quality by varietal changes and development program
3. To be flexible in to refining raw sugar for improving capacity utilisation
4. To achieve growth in the refined sugar business through a port based refinery under an associate company Uniworld Sugars Private Limited
5. To be a regular exporter on account of quality, brands and product mix whenever there is a viability
Threats
1. Adversities in agro-climatic conditions may impact
2. Volatile commodities markets have a bearing on international and domestic operations
3. Regulated environment may pose adversities for business decisions
4. Un-hedged positions in sugar and currencies
5. Directions of the Honble Courts and coercive actions by the State administration
Quality management system
The sugar units of the Company are compliant with internationally recognized quality, environment and food safety standards and are ISO 9001, ISO 14001 and FSSC 22000 certified. Management systems are applied to develop a systematic work culture that emphasizes process ownership across all levels of the organization. The Chilwaria Distillery of the Company has also been accredited with the ISO 9001 and ISO 14001.
Internal control system
The Company has adequate systems of internal control commensurate to its size and nature of business to safeguard the assets against loss and from any unwarranted use. All transactions are authorized, recorded and reported correctly. Internal audit and checks are carried out regularly at various units, projects and activities centers to ensure the adequacy of control system and its monitoring. The internal control procedures and information flow is transparent, predetermined and regulated. The evaluation of internal financial controls and risk management systems is a continuous process in the Company.
During the previous year, the exceptional item of Rs. 1,058 lacs represents write off of inventory shortage arising due to irregularities/ misappropriation committed by certain former senior executives of the Company against whom legal proceedings are in progress.
Risk assessment and mitigation policy
SSL has adopted a system based approach for risk management, with the clear objectives of identification, evaluation, monitoring and minimization of the identifiable risks. The policies have been formulated and adopted by the management for controlling the risks. The management periodically reviews the risk management framework to identify major business risks as applicable to the Company and works out their mitigation strategy. Business and currency volatility have also affected the risk profile of the Company. The following are the major risks associated with the businesses of the Company:
1. Risk of raw material: availability and pricing, particularly of sugarcane.
2. Pricing risks related to finished goods:
a. Sugar: The sugar prices are highly volatile based on the demand and surplus availability of sugar in the Country as well as in the international market. The market prices are therefore determined by the market forces.
b. Alcohol: Government policies affect the prices of ethanol and potable alcohol in international and domestic markets. The licensing of potable alcohol business is controlled by the state governments.
c. Power: The price is determined and payable by the state power corporations.
3. Agro climatic conditions: The sugar production depends on the volume and sucrose contents of sugarcane that is supplied to the mill. Various agro-climatic conditions such as unfavourable weather, irrigation facilities, crop disease, cane seed varieties etc adversely affect sugarcane crop and sugar yield.
4. Foreign exchange fluctuations affect the viability of international trade transactions.
5. Market risks: The demand and supply in the international markets and as a result, the price of the sugar, keep fluctuating for various reasons including changes in government policies in relation to the sugar industry.
6. Environment risk: The sugar and alcohol businesses are subject to Indian environmental laws and regulations, which require substantial capital expenditures and may also lead to closure of the plant by the regulatory authorities.
7. Competition: Competition in the sugar and alcohol sectors based upon a number of considerations, including location, product quality, brands, product innovation, distribution capabilities and price, may affect business.
8. Financial risks: The availability of funds to discharge obligations and continued finance from the Bankers for running the operations of the Company.
9. Legal risks: The business is subject to the litigation arising out of contractual liabilities and related dues, which may affect the running of the operations of the Company.
Besides, the Company is also subject to a number of internal and external risk factors, which affect its profitability. These include risks related to financing and reporting risks, contractual compliance, compliance with local laws, quality and project management, and human resource management.
Environmental Compliances
With reference to the operations of the Company, the mechanism to control the effluent treatment at zero discharge levels is in place under the prevailing policies as per industry norms. The Company has also taken steps with reference to the distillery plant of its wholly owned subsidiary for the action plans as per the directions of the Honble National Green Tribunal.
Corporate social responsibility (CSR)
The Company has a corporate social responsibility (CSR) policy indicating the guidelines for social welfare activities to be undertaken. It is implementing programs in the fields of education, healthcare, clean water, social welfare, village infrastructure development in reserved areas of its sugar mills. The Company, on its own, is meeting its social responsibility obligations by encouraging cleaner surroundings, improving village level infrastructure, unclogged drains and to learn the value of good hygiene and sanitation. The employees are also important stakeholders in the SIF, and have been contributing funds.
The Company is disseminating information on its CSR policies, activities and progress to all their stakeholders and the public at large through its website, annual reports, and other communication media. It has constituted a committee of directors to review the activities under its CSR policy.
Information technology
The information technology system of the Company is operating on SAP based enterprise resource planning (ERP) environment, optimizing the performance of its businesses as well as the business network. During the year, initiatives have been taken to bring operations of newly formed subsidiary/joint venture companies also into SAP environment. All the business units of the Company are now integrated through SAP modules.
Operations of Subsidiary/ Associate companies
I. Simbhaoli Spirits Limited (SISPL), a wholly owned subsidiary of SSL, has the business of operating a potable distillery at Simbhaoli. It has 90 kld capacity to manufacture rectified spirit, and interchangeable 60 kld capacity to manufacture extra neutral alcohol and ethanol. During the year, the Companys operations are adversely affected on account of the closure of distillery plant and the Company was not able to meet the fixed costs. Simbhaoli Sugars Limited, the holding Company has been providing necessary support during this financial crunch. The gross revenues earned by the Company during the year have been Rs. 10.60 crore (Previous year Rs. 94.64 crore) with a pre-tax loss after exceptional item Rs. 24.87 crore (Previous year Rs. 14.99 crore).
II. Simbhaoli Power Private Limited (SPL) is a 51% subsidiary, with a joint venture (JV) with Sindicatum Captive Energy Singapore Pte Limited (SCES). During the year, the expansion project of Simbhaoli cogeneration plant by 28 mw from existing 34 mw to 62 mw with a total project cost of Rs. 144 crore has been pursued. This will take the total power generation capacity to 100 mw. The gross revenues earned by the Company during the year have been Rs. 59.49 crore (Previous year Rs. 40.82 crore) with a pre-tax profit after exceptional item of Rs. 3.10 crore (Previous year loss Rs. 28.56 crore). In the year 2013, Simbhaoli Sugars Limited had transferred its power business to SPL under Business Transfer Agreement(s) (BTA). At the end of the financial year 2014-15, the outstanding BTA consideration stands at Rs. 8,180.15 lacs (previous year Rs. 11,204.33 lacs), which is proposed to be discharged in the manner as prescribed in Note 4 of the financial statements. The outstanding consideration payable has been disclosed under other current assets and other non-current assets. The management is hopeful that the entire liability will be discharged by SPL in the manner as agreed in BTAs.
III. Integrated Casetech Consultants Private Limited (ICCPL), an 85% subsidiary and the technology vertical of SSL has executed number of projects in India and overseas. In addition to the ongoing work in India, the projects at Zimbabwe and Philippines have been accomplished. ICCPL has earned gross revenues of Rs. 24.06 crore (Previous year Rs. 44.03 crore) with a pre-tax profit of Rs. 1.05 crore (Previous year Rs. 2.14 crore) for the year 2014-15.
IV. Uniworld Sugars Private Limited (USL) is a joint venture company between Simbhaoli Sugars Limited and ED&F Man Sugar Ltd, having a 1,000 tpd (3,00,000 mt per annum) capacity sugar refinery near Kandla Port, Gujarat. The share capital has been subscribed equally by the Company and ED & F Man, along with their affiliates. The refinery started commercial operations in August 2014 and is producing the international quality sugar for export. The gross revenues earned by the Company during the year have been Rs. 237.80 crore (Previous year Rs. 0.14 crore) with a pre-tax loss of Rs. 41.09 crore (Previous year Rs. 0.39 crore).
V. Simbhaoli Global Commodities DMCC, Dubai, is the wholly owned subsidiary. During the year, DMCC has earned revenue of Rs. 416.37 lacs (Previous year Rs. 1.43 Lacs) with a pre-tax loss of Rs. 32.73 lacs (Previous year Rs. 6.29 Lacs). It is proposed to close this company as there is no business opportunities envisaged in the near future.
VI. The name of Resham Packaging Private Limited, a wholly owned subsidiary company has been changed to Simbhaoli Speciality Sugars Private Limited. No major business activities have been carried out in this Company during the year.
OPERATIONS
A summary of the physical operations of all the business units of the Company for the year 2014-15 is stated as under:
| Manufacturing Facilities | Unit | Simbhaoli | Chilwaria | Brijnathpur | Total | ||||
| Year/ Sugar Facilities | 2014-15 | 2013-14 | 2014-15 | 2013-14 | 2014-15 | 2013-14 | 2014-15 | 2013-14 | |
| Sugarcane crushed | Lacs MT | 12.95 | 11.19 | 6.02 | 6.37 | 4.73 | 4.46 | 23.70 | 22.02 |
| Sugar recovery* | % | 10.80 | 9.91 | 9.25 | 8.99 | 9.35 | 8.60 | 10.12 | 9.12 |
| Raw/ below grade sugar refined | Lacs MT | 0.24 | 0.20 | - | - | 0.006 | 0.07 | 0.25 | 0.27 |
| White Sugar produced# | 000 MT | 139.90 | 119.79 | 55.66 | 57.30 | 44.18 | 45.01 | 239.74 | 222.10 |
| Gross season for sugar plant | Days | 163 | 141 | 136 | 136 | 163 | 142 | NA | NA |
| Date of start of the Sugar plant | - | 14.11.14 | 07.12.13 | 10.12.14 | 11.12.13 | 14.11.14 | 10.12.13 | NA | NA |
| Date of closure of Sugar plants | - | 26.04.15 | 26.04.14 | 05.04.15 | 25.04.14 | 26.03.15 | 30.04.14 | NA | NA |
| Days of operations of distillery | days | 187 | 171 | 182 | 194 | NA | NA | ||
| Alcohol/ Ethanol produced | B.L (Lacs) | 92.00 | 97.69 | 120.74 | 132.95 | 212.74 | 230.64 | ||
* recoveries have been affected on account of climatic conditions. # including conversion of raw and below grade white sugar, into refined sugar
During the year, 23.97 lacs qtl (previous year 22.2 lacs qtl) of white sugar was produced and 25.11 lacs qtl (previous year 23.15 lacs qtl) of sugar from both sugarcane and refining of raw sugar, was sold at an average price realization of Rs. 2,980 per qtl (previous year, Rs.3,170 per qtl). The average realization of sugar was lower by Rs. 190 per qtl on account of depressed market scenario.
FINANCIAL RESULTS, ANALYSIS AND REVIEW
A summary of the standalone financial results of the Company for the year ended March 31, 2015 is stated as under.
(Rs in lakh)
| Particulars | Year ended Mar 31, 2015 | Year ended Mar 31, 2014 |
| Net Sales/Income from operations | 85,626 | 83,578 |
| Other Income | 2,831 | 2,812 |
| Profit/(Loss) before Interest, depreciation and exceptional items | (1,268) | 835 |
| Interest expense | 12,481 | 14,181 |
| Depreciation | 2,221 | 2,795 |
| (Loss) before tax & exceptional items | (15,970) | (16,142) |
| Exceptional Gains/(Loss) | 0 | (1,058) |
| Tax expense | 0 | 23 |
| Net (Loss) after Tax | (15,970) | (17,223) |
During the year, the business of the Company has been affected adversely on account of, high sugarcane prices, low sugar prices, and high finance and other fixed costs. In view of the absence of distributable profits, and substantial carried forward business losses, the directors express their inability to recommend any dividend for the year.
Since there was no unpaid/unclaimed dividend declared and paid in the previous years, the provisions of Section 125 of the Companies Act, 2013 do not apply.
The Company is implementing a Scheme of Amalgamation with Simbhaoli Spirits Limited, having appointed date as March 31, 2014 (the Scheme). The financial figures of the amalgamated entity after implementation of the Scheme will significantly vary particularly with reference to the share capital structure, reserves and surplus, and net worth. The impact of these changes pending final approval of the Scheme has not been considered in these accounts and therefore, not commented. The following is the summary of financial review for the year: Share Capital: There was no movement in share capital during the year.
Reserves and Surplus: following movement has taken place during the year:
(i) Revaluation reserve: Deduction of Rs.124.52 lacs, (previous year Rs. 37.42 lacs) being amount transferred to Profit and Loss Account.
(ii) Capital grant in aid: Adjustment for amount utilised during the year, Rs. 7.27 lacs (previous year Rs. 7.11 lacs). Pending completion of restructuring under the Scheme, the net worth of the Company shows a negative balance of Rs. 32,616.55 lacs, (previous year Rs. 16,346.40 lacs). However, on implementation of the Scheme, the net worth will turn into positive.
Long term borrowings : Long term borrowings have increased by Rs. 551.54 lacs during the year. The Company has submitted a proposal to its lenders for rescheduling its loan accounts.
Short term borrowings: Un-secured short term borrowings have reduced by Rs. 3,333.28 lacs (net).
Fixed assets : Addition to the fixed assets aggregating to Rs. 612.15 lacs (previous year Rs. 1,609.61 lacs) includes the following:
i) Rs. 167.67 lacs for 4th Mill -AC VFD drive with planetary gear box in CSD,
ii) Rs. 74.55 lacs for Brine recovery system and Rs. 73.48 lacs for furniture and fixtures in SSD,
iii) Rs. 369.93 lacs on account of miscellaneous assets.
The Company has deducted Rs. 221.80 lacs (previous year Rs. 282.91 lacs) from fixed assets:
i) Land at Noida of Rs. 217.96 lacs,
ii) Rs. 3.84 lacs on account of miscellaneous assets. Investments: The Company has following investments as on March 31, 2015:
(Rs in Lacs)
| Particulars | Opening balance as on April 1, 2014 | Additions during the year | Balance as on March 31, 2015 |
| (i) 2,00,800 equity shares of Rs. 10 each in Integrated Casetech Consultants Private Limited | 38 | 0 | 38 |
| (ii) 2,76,53,770 Equity shares of Rs. 10 each in Uniworld Sugars Pvt. Ltd | 7,226 | 106 | 7,333 |
| (iii) 300 Equity Shares of AED 1000 each in Simbhaoli Global Commodities DMCC | 40 | 0 | 40 |
| (iv) 3,18,00,000 Equity shares of Rs. 10 each in Simbhaoli Spirits Ltd | 25,405 | 0 | 25,405 |
| (v) 22,62,766 Equity shares of Rs. 10 each in Simbhaoli Power Pvt Ltd | 1,885 | 333 | 2,218 |
| (vi) 33,94,165 debentures of Rs. 100 each of Simbhaoli Powers Pvt. Ltd. | 2,894 | 500 | 3,394 |
| (vii) 19,000 equity shares of Rs. 10 each of Simbhaoli Speciality Sugar Private Limited | 0 | 190 | 190 |
| (viii) Others | 2 | 1 | 3 |
| Investments at the end of the year | 37,490 | 1,130 | 38,620 |
Inventories: Inventory amounting to Rs. 35,389.42 lacs (previous year Rs. 45,659.34 lacs) includes finished goods, raw material, process stocks, and store items. The sugar at the year end is valued at net realizable value of Rs. 2,600 per qtl (previous year Rs. 3,231 per qtl).
Sundry debtors: Sundry debtors (net) amounting to Rs. 8,426.94 lacs (previous year Rs. 6,499.50 lacs), are considered good and realisable. Provisions are generally made for all debtors outstanding for over 360 days subject to their scope of realization, industry trend and managements perception. Debtors are at 9.54% (previous year 7.53%) of gross revenues, representing an outstanding of 35 days (previous year 27 days).
Cash and Bank Balance: Cash and bank balance of Rs. 1,571.26 lacs (previous year Rs. 3,431.44 lacs) includes fixed deposits of Rs. 653.99 lacs out of which an amount of Rs. 430.52 lacs are pledged with banks for securing certain loans, letters of credit, guarantees and other facilities.
Other Current Assets: Other current assets of Rs. 10,460.90 lacs (previous year Rs. 15,308.13 lacs) comprise a receivable of Rs. 8,640.48 lacs (previous year Rs.13,473.78 lacs) against slump sale of Power business of the Company to Simbhaoli Power Private Limited.
Trade payables, other current liabilities, and provisions: Trade payables at Rs. 53,478.35 lacs (previous year Rs. 45,358.20 lacs) are increased by Rs. 8,120.15 lacs, on account of cane dues. The liability includes amount payable against sugarcane supply, other raw materials, stores and services. The other current liabilities of Rs. 18,655.36 lacs (previous year Rs. 15,277.45 lacs) reflect amount payable against finance charges and other miscellaneous liabilities.
Sales and other income: Sales and other income (net of excise) is Rs. 88,456.34 lacs (previous year Rs. 86,390.03 lacs). The segment wise allocation of revenues for the year 2014-15 and for proceeding two accounting years is as under:
(Rs. lacs)
| Years | Sugar | Alcohol | Power | |||
| Turnover | %age | Turnover | %age | Turnover | %age | |
| 2012-13 | 80,841 | 88.65 | 8,258 | 9.06 | 2087 | 2.29 |
| 2013-14 | 78,331 | 90.68 | 8,050.40 | 9.32 | - | - |
| 2014-15 | 80,423 | 91.00 | 7,952 | 9.00 | - | |
The other income of Rs. 2,830.57 lacs (previous year Rs. 2,812.10 lacs) comprises interest, rent, dividend from subsidiary companies, foreign exchange fluctuation, liabilities/provisions which are no longer required and written back and miscellaneous earnings.
Raw Material Consumption: Sugarcane, molasses and raw sugar are the principal raw materials purchased by the Company. There has been a reduction of Rs. 3,635.20 lacs in raw material consumption on account of accounting of benefits announced by the State Government related to sugarcane price.
Employees cost: The employee cost at Rs. 4,213.37 lacs (previous year Rs. 4,677.23 lacs), has decreased by Rs. 463.86 lacs on account of fall in the number of manpower employed. Finance cost: Finance costs of Rs. 12,480.65 lacs (previous year Rs. 14,180.82 lacs) has decreased by Rs. 1,700.17 lacs on account of impact of repayment of loans and less utilization of working capital limits.
Other Expenses: Other expenses at Rs. 8,969.52 lacs are showing an increase of Rs. 695.01 lacs, on account of provision made for amount of interest receivable on sunk ship.
Accounting policies
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention method as modified to include the revaluation/business valuation of certain fixed assets as indicated in Notes to account. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
The Board of Directors of the Company accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates/ judgments used in preparation of these statements. The estimates and/or judgments have been made on a consistent, reasonable and prudent basis to reflect true and fair view of the state of the affairs of the Company.
Loans, Guarantees, and investments under section 186
The particulars of Loans, guarantees or investments made under Section 186 of the Companies Act, 2013 and rules made there under is furnished in Note 9 in the notes to accounts forming part of the Annual report.
Particulars of contracts or arrangements made with related parties
The particulars of contracts or arrangements made with related parties made pursuant to Section 188 is furnished in Note 11 in the notes to accounts forming part of the Annual report
Debt servicing and public deposits
During the year, the Company has not been able to meet its obligations towards the lenders for principal and interest, in terms with the respective letters of sanction/approvals. Discussions are underway with them for the realignment of the debt structure of the Company.
The Company has not accepted any public deposits and no deposits are unpaid in any previous year.
As there are delays in repayment of the loans, and the cane price arrears have mounted high, the Companys credit rating has been downgraded.
Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Secretarial Auditors in their reports
The comments/remarks in the Secretarial Audit Report are self explanatory and explained at the appropriate section of the Anuual Report.
Material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of report
The Company has been facing financial difficulties on account of higher sugarcane price and lower sugar realization. The detail has been reported elsewhere in this report.
AUDITORS REPORT
The comments on the statement of account referred to in the report of the auditors are self-explanatory, and explained in the appropriate notes to accounts.
DIRECTORS
At the forthcoming 78thAnnual General Meeting (AGM) of the Company, Ms. Gursimran Kaur Mann and Mr. Gurpal Singh, Directors on the Board of the Company, are retiring by rotation and being eligible, have offered themselves for re-appointment. During the year, State Bank of India has withdrawn the nomination of Mr.Abhay Kumar Singh. The Board of Directors places on record its appreciation for the advices and guidance extended by the outgoing director to the Company.
Declaration of independent directors
The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013.
Companys policy relating to directors appointment, payment of remuneration and discharge of their duties
The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies
Act, 2013 is has been disseminated at the Companys website at link-http://www.simbhaolisugars.com/company_policies.asp.
Number of board meetings conducted during the year under review
Total 6 meetings of the Board of Directors of the Company were held during the year 2014-15 and detail is furnished in Report on the Corporate Governance forming part of this report.
Board Evaluation
The Company has devised the principles for review of the performance of the non-independent whole-time directors, based on the various criterion as approved by the independent directors of the Company in their meeting held in pursuance to the provisions of the Para VII (1) of schedule IV to the Companies Act, 2013 and Rules made there under.
The Company is also in process to adopt the best industry practices for the evaluation of the performance of non-independent directors and the Board as a whole and the Committees thereof.
Key Managerial Personnel:
The Company has the following persons as the key managerial personnel:
1. Mr. Gurmit Singh Mann, Executive Chairman
2. Mr. Gurpal Singh, Managing Director
3. Ms. Gursimran Kaur Mann, Managing Director
4. Mr. Sanjay Tapriya, Chief Financial Officer
5. Mr. S N Misra, Chief Operating Officer
6. Mr. Kamal Samtani, Company Secretary
Secretarial Audit
M/s Amit Gupta & Associates, Company Secretaries, have been engaged as the Secretarial Auditors of the Company under the provisions of the Companies Act, 2013. The Secretarial Audit Report is given as Annexure-1 to this report.
Cost Auditors
M/s Satnam Singh Saggu, Cost Accountants, have been engaged as the Cost Auditors of the Company under the provisions of the Companies Act, 2013 for the financial year 2014-15.
ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure-2 and is attached to this Report.
SUBSIDIARY, JOINT VENTURE, AND ASSOCIATE COMPANIES
The Company has four subsidiary Companies, viz. Simbhaoli Spirits Limited, Simbhaoli Power Private Limited, Integrated Casetech Consultants Private Limited, Simbhaoli Speciality Sugars Private Limited and Simbhaoli Global Commodities DMCC, Dubai. Uniworld Sugars Private Limited is a joint venture Company. The consolidated financial statements presented by the Company include financial information of its subsidiary and joint venture companies prepared in compliance with applicable accounting standards.
EMPLOYEE STOCK OPTION SCHEME
Under Simbhaoli Sugars Limited-Employee Stock Option Scheme 2007, all the balance stock options have lapsed on expiry of vesting period. No fresh stock options have been introduced during the year.
CORPORATE GOVERNANCE
The report on corporate governance along-with certificate from the practicing company secretary and certificate from Chairman, Managing Directors, Chief Financial Officer and Chief Operating Officer form part of this annual report.
VIGIL MECHANISM
The Company has established a vigil mechanism, which overseas through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees or Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company.
The policy on the vigil mechanism comprising of the whistle blower policy, has been disseminated at the Companys website at link-http://www.simbhaolisugars.com/company_policies.asp
LISTING OF SECURITIES
The equity shares of the Company are listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
CONSERVATION OF ENERGY, TECHNOLOGY AB SORPTION INITIATIVES, RESEARCH A ND DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology initiatives, Research and Development, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure-3.
PARTICULARS OF EMPLOYEES
The disclosure under the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-4.
There was no employee of the Company, who has been paid remuneration under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
AUDITORS
The Auditors, M/s Deloitte Haskins & Sells, Chartered Accountants, New Delhi, (the statutory auditors), have been appointed for the three financial years, 2014-15, 2015-16 and 2016-17 subject to the ratification at each annual general meeting of the members of the Company. The Companies Act, 2013 has also prescribed the provisions for the rotation of the statutory auditors. Your directors are in discussions with them and appropriate steps in this regard shall be taken in cohesion with the prescribed guidelines.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, read with the Rules made there under, with respect to the Directors responsibility statement, it is hereby confirmed:
(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 judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors 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 the applicable laws and that such systems were adequate and operating effectively.
CAUTIONARY STATEMENT
Certain statements in this report may be forward looking and represent intention of the management. Actual results may differ materially due to a number of risks or uncertainties associated with the business. Investors/stakeholders, therefore, are advised to make their own judgments before taking any investment, business decisions.
ACKNOWLEDGEMENT
The Board of Directors acknowledge the continued assistance and guidance provided by the Government of India, State Government of Uttar Pradesh, lender banks and institutions and the co-operation and assistance received from all executives, staff and workmen of the Company.
The directors also express special thanks to the joint venture partners to run the affairs of the respective subsidiary/associate companies, being part of the future growth of the Company. The Directors also wish to emphatically state their gratitude to the Indian Sugar Mills Association, farmers, suppliers and all other concerned persons who have continued their valuable support to your Company.
| For and on behalf of the Board of Directors | |
| Simbhaoli Sugars Limited | |
| Gurmit Singh Mann | |
| Noida | Chairman |
| May 30, 2015 | DIN - 00066653 |
Annexure-1
FORM NO. MR.3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2015
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
To,
The Members,
SIMBHAOLI SUGARS LIMITED,
(CIN - L24231UP1936PLC000740)
Hapur Road, Simbhaoli, Uttar Pradesh
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s SIMBHAOLI SUGARS LIMITED (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on our verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion
i. The Company has, during the audit period covering the financial year ended on 31st March, 2015 complied with the statutory provisions listed hereunder and also
ii. That the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of:
i. The Companies Act, 2013 (the Act) and the rules made there under;
ii. The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made there under;
iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
iv. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings - Not applicable as the Company has not made any such transaction during the financial year under review;
v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009- Not applicable as the Company has not made any public offer of securities during the period under review;
d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999/Securities And Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (effective 28th October 2014) - Not applicable as the Company has not granted any options during the financial year under review
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable as the securities issued by Company were not listed during the period under review;
f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review;
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable as the Company has not delisted/propose to delist its equity shares from any stock exchange during the financial year under review;
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the Company has not bought back/propose to buyback any of its securities during the financial year under review.
vi. The following other laws as may be applicable specifically to the Company:
(a) Sugar Cess Act, 1982
(b) Levy Sugar Price Equalisation Fund Act, 1976
(c) Food Safety And Standards Act, 2006
(d) Essential Commodities Act,1955
(e) Sugar Development Fund Act, 1982
(f) Agricultural and Processed Food Products Export Act, 1986
(g) The Boilers Act, 1923
(h) The Legal Metrology Act, 2009
(i) The Environment Protection Act, 1986
(j) The Water (Prevention and Control Pollution) Act, 1974
(k) The Air (Prevention and Control Pollution) Act, 1981
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India -Not applicable as the standards were not notified during the period under review; and
(ii) Listing Agreements entered into by the Company with BSE Limited & The National Stock Exchange of India Limited, Mumbai.
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:
(i) Whereas in terms of the provisions of Section 149(6) of the Companies Act, 2013 and clause 49 of the Listing agreement, the Companys Board is required to maintain the mix of 50% Independent Directors,
(ii) Whereas in terms of the provisions of the Para VII (1) of schedule IV to the Companies Act, 2013 (the Act) and Rules made there under, the Independent Directors were required to undertake an evaluation of the performance of Non-independent Directors, the Company has started the process of evaluation. The Company has devised the principles for review of the performance of the non-independent whole-time directors, based on the various criterion as approved by the independent directors of the Company in their meeting held in pursuance to the provisions of the Para VII (1) of schedule IV to the Companies Act, 2013 and Rules made there under. However, review of the performance of Independent Directors in terms of the requirement of revised clause 49 of the Listing agreement (effective from 01.10.2014) and evaluation of the Board as per the requirement of the provisions of section 134(3)(p) of the Companies Act, 2013 is pending. The management of the Company has informed that the Company is in process to adopt the best industry practices for the evaluation of the performance of non-independent directors and the Board as a whole and the Committees thereof and aforesaid evaluations shall be concluded soon.
(iii) The Company has not filed/filed with delay certain forms/ returns/documents etc. with the Registrar of Companies, Ministry of Corporate Affairs, Kanpur under the provisions of the Companies Act, 2013.
(iv) The Honble National Green Tribunal (NGT), Principal Bench, New Delhi has passed an order imposing monetary penalty on the Company on the complaint alleging non-fulfilment of certain conditions on pollution and effluent discharge against the Company. The NGT in its order had issued directions for mandatory compliance before re-start of the distillery operations. However, as explained by the Company the matter relates to the year 2013-14 in respect of its wholly owned subsidiary M/s Simbhaoli Spirits Limited on account of withdrawal of consent by the pollution control authorities due to non-fulfillment of certain conditions of their consent.
We further report that:
• The Board of Directors of the Company is duly constituted with proper balance of Executive Directors & Non-Executive Directors. The Company, being a listed entity, need to maintain the 50% mix of an Independent Directors on its Board The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
• Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were generally sent at least seven days in advance. However, we have noted delay in sending agenda papers in few cases, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting for meaningful participation at the meeting.
• Majority decision is carried through, while the dissenting members views, if any, are captured and recorded as part of the minutes.
We further report that the systems and processes in the Company require further strengthening and improvements, considering the size and operations of the Company to enable better monitoring and ensuring of timely compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the company has: (i) Initiated a Scheme of Amalgamation of the Company with Simbhaoli Spirits Limited (SISPL), the wholly owned subsidiary company (the Scheme) and filed the same with the Honble High Court of Judicature at Allahabad (the Court). The shareholders and unsecured creditors of the Company have approved the Scheme and the meetings of the secured creditors of both the companies have been convened as per the directions of Honble Court on July 11, 2015. Based on record and as explained to us, pending sanction of the Scheme by the Court, no financial effect has been considered in financial statements for the year ended at 31st March, 2015 and considering the pendency of the Scheme, whereby Net worth of the Company becomes positive, no further steps in terms of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) have been initiated.
| For Amit Gupta & Associates | |
| Company Secretaries | |
| (Amit Gupta) | |
| Proprietor | |
| Place: Lucknow | Membership No. : F5478 |
| Date: 30.05.2015 | C.P. No. 4682 |
Note: This report should be read with the letter of even date by the Secretarial Auditors.
To,
The Members,
SIMBHAOLI SUGARS LIMITED,
Hapur Road, Simbhaoli, Uttar Pradesh
Our Report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
4. Where ever required, we have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
| For Amit Gupta & Associates | |
| Company Secretaries | |
| Amit Gupta | |
| Proprietor | |
| Membership No.: F5478 | Date: 30.05.2015 |
| C.P. No. 4682 | Place: Lucknow |
Annexure-2
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2015
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014
I. REGISTRATION & OTHER DETAILS:
| 1. CIN | L24231UP1936PLC000740 |
| 2. Registration Date | 29/06/1936 |
| 3. Name of the Company | Simbhaoli Sugars Limited |
| 4. Category/Sub-category of the Company | Listed Company |
| 5. Address of the Registered office & contact details | Simbhaoli, District- Hapur, Uttar |
| Pradesh-245207 | |
| Ph: 05731 226410/11 | |
| 6. Whether listed company | Yes |
| 7. Name, Address & contact details of the Registrar & Transfer Agent, if any. | Mas Services Limited, T-34, |
| 2nd Floor, Okhla Industrial Area, | |
| Phase-II, New Delhi-110020 |
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)
| S. No. | Name and Description of main products/ services | NIC Code of the Product/service | % to total turnover of the company |
| 1 | Sugar | 1072 | 91.05 |
| 2 | Alcohol | 1101 | 8.05 |
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: NIL
| S. No | Name and Address of the Company | CIN/GLN | Holding/subsidiary /associate | % of shares held | Applicable section |
| 1 | Simbhaoli Spirits Limited | U15122UP2011PLC044210 | Wholly owned subsidiary | 100% | 2(87) ii |
| 2 | Simbhaoli Speciality Sugars Pvt. Limited | U21015DL1995PTC069925 | Wholly owned subsidiary | 100% | 2(87) ii |
| 3 | Integrated Casetech Consultants Pvt Ltd | U74140DL2008PTC184876 | Subsidiary | 85.16% | 2(87) i& ii |
| 4 | Simbhaoli Power Private Limited | U40300UP2011PTC045360 | Subsidiary | 51% | 2(87) ii |
| 5 | Uniworld Sugars Pvt Ltd | U15422UP2009PTC038540 | Associate | 50% | 2(6) |
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
(i) Category-wise Share Holding
| Category of Shareholders | No. of Shares held at the beginning of the year [As on 31-March-2014] | No. of Shares held at the end of the year [As on 31-March-2015] | % Change during the year | ||||||
| Demat | Physical | Total | % of Total Shares | Demat | Physical | Total | % of Total Shares | ||
| A. Promoters | |||||||||
| (1) Indian | |||||||||
| a) Individual/ HUF | 63,01,656 | - | 6,301,656 | 22.32 | 72,01,656 | - | 72,01,656 | 25.51 | 3.19 |
| b) Central Govt | - | - | - | - | - | - | - | - | - |
| c) State Govt(s) | - | - | - | - | |||||
| d) Bodies Corp. | 66,07,213 | - | 66,07,213 | 23.41 | 68,97,213 | - | 68,97,213 | 24.43 | 1.02 |
| e) Banks / FI | - | - | - | - | - | - | - | - | - |
| f) Any other | - | - | - | - | - | - | - | - | - |
| Total shareholding of Promoter (A) | 1,29,08,869 | - | 1,29,08,869 | 45.73 | 1,40,98,869 | - | 1,40,98,869 | 49.95 | 4.22 |
| B. Public Shareholding | |||||||||
| 1. Institutions | |||||||||
| a) Mutual Funds | - | 1,500 | 1,500 | 0.01 | - | 1,500 | 1,500 | 0.01 | - |
| b) Banks / FI | 1,000 | - | 1,000 | - | 1,000 | - | 1,000 | - | - |
| c) Central Govt | - | - | - | - | - | - | - | - | - |
| d) State Govt(s) | - | - | - | - | - | - | - | - | - |
| e) Venture Capital Funds | - | - | - | - | - | - | - | - | - |
| f) Insurance Companies | - | - | - | - | - | - | - | - | - |
| g) FIIs | 22,39,643 | - | 22,39,643 | 7.93 | 10,45,737 | - | 10,45,737 | 3.71 | -4.22 |
| h) Foreign Venture Capital Funds | - | - | - | - | - | - | - | - | - |
| i) Others (specify) | - | - | - | - | - | - | - | - | - |
| Sub-total (B)(1):- | 22,40,643 | 1,500 | 22,42,143 | 7.94 | 10,46,737 | 1,500 | 10,48,237 | 3.81 | -4.13 |
| 2. Non-Institutions | |||||||||
| a) Bodies Corp. | 61,23,971 | 6,266 | 61,30,237 | 21.72 | 60,01,139 | 6,266 | 60,07,405 | 21.28 | -0.44 |
| i) Indian | - | - | - | - | |||||
| ii) Overseas | - | - | - | - | - | - | - | - | |
| b) Individuals | - | - | - | - | - | - | - | - | |
| i) Individual shareholders holding nominal share capital uptoRs. 1 lakh | 47,14,436 | 5,44,101 | 52,58,537 | 18.63 | 46,81,753 | 5,35,263 | 52,17,016 | 18.48 | -0.15 |
| ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh | 13,52,669 | - | 13,52,669 | 4.79 | 15,84,357 | - | 15,84,357 | 5.61 | 0.82 |
| c) Others (specify) | |||||||||
| Non Resident Indians | 1,94,307 | - | 1,94,307 | 0.69 | 1,80,796 | 1,80,796 | 0.64 | -0.05 | |
| Overseas Corporate Bodies | - | - | - | - | |||||
| Foreign Nationals | - | - | - | - | |||||
| Clearing Members | 1,41,848 | - | 1,41,848 | 0.50 | 91,830 | 91,830 | 0.33 | -0.17 | |
| Trusts | 200 | - | 200 | - | 300 | 300 | |||
| Foreign Bodies - D R | - | - | - | ||||||
| Sub-total (B)(2):- | 1,25,27,431 | 5,50,367 | 1,30,77,798 | 46.33 | 1,25,40,175 | 5,41,529 | 1,30,81,704 | 46.34 | 0.01 |
| Total Public Shareholding (B)=(B)(1)+ (B)(2) | 1,47,68,074 | 5,51,867 | 1,53,19,941 | 54.27 | 1,35,86,912 | 5,43,029 | 1,41,29,941 | 50.06 | -4.21 |
| C. Shares held by Custodian for GDRs & ADRs | - | - | - | - | |||||
| Grand Total (A+B+C) | 2,76,76,943 | 5,51,867 | 2,82,28,810 | 100 | 2,76,85,781 | 5,43,029 | 2,82,28,810 | 100 | 14.7 |
(ii) Shareholding of Promoter-
| SN | Shareholders Name | Shareholding at the beginning of the year | Shareholding at the end of the year | % change in shareholding during the year | ||||
| No. of Shares | % of total Shares of the company | %of Shares Pledged / encumbered to total shares | No. of Shares | % of total Shares of the company | %of Shares Pledged / encumbered to total shares | |||
| 1 | Gurmit Singh Mann | 22,84,747 | 8.09 | 0 | 31,84,747 | 11.28 | 0 | 3.19 |
| 2 | Gurpal Singh | 20,53,649 | 7.28 | 0 | 20,53,649 | 7.28 | 0 | 0 |
| 3 | Gursimran Kaur Mann | 9,71,514 | 3.44 | 0 | 9,71,514 | 3.44 | 0 | 0 |
| 4 | Govind Singh Sandhu | 6,26,614 | 2.22 | 0 | 6,26,614 | 2.22 | 0 | 0 |
| 5 | Jai Inder Kaur | 3,56,714 | 1.26 | 1.14 | 3,56,714 | 1.26 | 1.14 | 0 |
| 6 | Angad Singh | 8,418 | 0.03 | 0 | 8,418 | 0.03 | 0 | 0 |
| 7 | Dholadhar Investments Pvt Ltd | 53,06,585 | 18.80 | 4.87 | 55,96,585 | 19.83 | 4.87 | 1.03 |
| 8 | Pritam Singh Sandhu Associates Private Limited | 13,00,628 | 4.61 | 1.95 | 13,00,628 | 4.61 | 1.95 | 0 |
| Total | 1,29,08,869 | 45.73 | 7.97 | 1,40,98,869 | 49.95 | 7.97 | 4.22 | |
(iii) Change in Promoters Shareholding (please specify, if there is no change)
| S. No | Particulars | Shareholding at the beginning of the year | Cumulative Shareholding during the year | ||
| No. of shares | % of total shares of the company | No. of shares | % of total shares of the company | ||
| A. | Mr. Gurmit Singh Mann | ||||
| 1 | At the beginning of the year | 22,84,747 | 8.093 | 22,84,747 | 8.093 |
| 2 | Increase in shareholding by inter say transfer among the promotersdated 25.03.2015 | 9,00,000 | 3.188 | 31,84,747 | 11.281 |
| 3 | At the end of the year | 31,84,747 | 11.281 | 31,84,747 | 11.281 |
| B. | M/s Dholadhar Investments Private Limited | ||||
| 1 | At the beginning of the year | 53,06,585 | 18.80 | 53,06,585 | 18.80 |
| 2 | Increase in holding by purchase in open market on 17.03.2015 | 11,90,000 | 4.21 | 64,96,585 | 23.01 |
| Decrease in shareholding by inter say transfer among the promotersdated | 9,00,000 | 3.188 | 55,96,585 | 19.83 | |
| 25.03.2015 | |||||
| 3 | At the end of the year | 55,96,585 | 19.83 | 55,96,585 | 19.83 |
(iv) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):
| S. No | For Each of the Top 10 Shareholders | Shareholding at the beginning of the year | Cumulative Shareholding during the year | ||
| No. of shares | % of total shares of the company | No. of shares | % of total shares of the company | ||
| 1. | M/s India Max Investment Fund Limited | ||||
| At the beginning of the year | 22,20,687 | 7.93 | 22,20,687 | 7.93 | |
| Sale of shares on 17.03.2015 in open market | 11,74,950 | 4.16 | 10,45,737 | 3.77 | |
| At the End of the year | 10,45,737 | 3.77 | 10,45,737 | 3.77 | |
| 2. | M/s Monica Realtors & Investments Private Limited | ||||
| At the beginning of the year | 12,00,000 | 4.25 | 12,00,000 | 4.25 | |
| Date wise Increase/Decrease in Shareholding during the year specifying the reasons for increase/ decrease | Nil | Nil | |||
| At the End of the year | 12,00,000 | 4.25 | 12,00,000 | 4.25 | |
| 3. | M/s U K Paints (India) Private Limited | ||||
| At the beginning of the year | 8,09,377 | 2.86 | 8,09,377 | 2.86 | |
| Shares purchased from open market on 23.05.2014 | 2,95,388 | 1.046 | 11,04,765 | 3.91 | |
| At the End of the year | 11,04,765 | 3.91 | 11,04,765 | 3.91 | |
| 4. | M/sPearl Innovative Marketing Private Limited | ||||
| At the beginning of the year | 7,95,404 | 2.81 | 7,95,404 | 2.81 | |
| Date wise Increase/Decrease in Shareholding during the year | Nil | ||||
| At the End of the year (or on the date of separation, if separated during the year) | 7,95,404 | 2.81 | 7,95,404 | 2.81 | |
| 5. | M/sShri Vatsala Traders Private Limited | ||||
| At the beginning of the year | 7,90,969 | 2.80 | 7,90,969 | 2.80 | |
| Date wise Increase/Decrease in Shareholding during the yearspecifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus/sweat equity etc): | Nil | Nil | |||
| At the End of the year (or on the date of separation, if separated during the year) | 7,90,969 | 2.80 | 7,90,969 | 2.80 | |
| 6. | M/s Wang Investment Finance Private Limited | ||||
| At the beginning of the year | 5,37,269 | 1.90 | 5,37,269 | 1.90 | |
| Date wise Increase/Decrease in Shareholding during the year specifying the reasons for increase /decrease | Nil | Nil | |||
| At the End of the year (or on the date of separation, if separated during the year) | 5,37,269 | 1.90 | 5,37,269 | 1.90 | |
| 7. | M/s Citland Commercial Credits Limited | ||||
| At the beginning of the year | 3,03,544 | 1.07 | 3,03,544 | 1.07 | |
| Date wise Increase/Decrease in Shareholding during the year specifying the reasons for increase /decrease | Nil | Nil | |||
| At the End of the year (or on the date of separation, if separated during the year) | 3,03,544 | 1.07 | 3,03,544 | 1.07 | |
| 8. | M/s Vignette Investments Private Limited | ||||
| At the beginning of the year | 2,95,388 | 1.046 | 2,95,388 | 1.046 | |
| Open Market sale on 23.05.2014 | 2,95,388 | 1.046 | 0.00 | 0.00 | |
| Date of separation May 23, 2014 at the end of year | Nil | 0.00 | |||
| 9. | Mr. Yogesh Kumar | ||||
| At the beginning of the year | 1,50,000 | 0.531 | 1,50,000 | 0.531 | |
| Date wise Increase/Decrease in Shareholding during the year specifying the reasons for increase /decrease | Nil | ||||
| At the End of the year | 1,50,000 | 0.531 | 1,50,000 | 0.531 | |
| 10. | Mr. Shivinder Pal Singh Mann | ||||
| At the beginning of the year | 1,25,000 | 0.442 | 1,25,000 | 0.442 | |
| Date wise Increase/Decrease in Shareholding during the year specifying the reasons for increase /decrease | Nil | ||||
| At the End of the year | 1,25,000 | 0.442 | 1,25,000 | 0.442 | |
a. Shareholding of Directors and Key Managerial Personnel:
Shareholding of each Directors and each Key Managerial Personnel
| S. No | Shareholding of each Directors and each Key Managerial Personnel | Shareholding at the beginning of the year | Cumulative Shareholding during the year | ||
| No. of shares | % of total shares of the company | No. of shares | % of total shares of the company | ||
| A. | Mr. Gurmit Singh Mann | ||||
| 1 | At the beginning of the year | 22,84,747 | 8.093 | 22,84,747 | 8.093 |
| 2 | Increase in shareholding by inter say transfer among the promoters dated 25.03.2015 | 9,00,000 | 3.188 | 31,84,747 | 11.281 |
| 3 | At the end of the year | 31,84,747 | 11.281 | 31,84,747 | 11.281 |
| B. | Mr. Gurpal Singh | ||||
| 1. | At the beginning of the year | 20,53,649 | 7.275 | 20,53,649 | 7.275 |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | |||
| 3. | At the end of the year | 20,53,649 | 7.275 | 20,53,649 | 7.275 |
| C. | Ms. Gursimran Kaur Mann | ||||
| 1. | At the beginning of the year | 9,71,514 | 3.44 | 9,71,514 | 3.44 |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | |||
| 3. | At the end of the year | 9,71,514 | 3.44 | 9,71,514 | 3.44 |
| D. | Mr. Sanjay Tapriya | ||||
| 1. | At the beginning of the year | 2,070 | 0.007 | 2,070 | 0.007 |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | |||
| 3. | At the end of the year | 2,070 | 0.007 | 2,070 | 0.007 |
| E. | Mr. S N Misra | ||||
| 1. | At the beginning of the year | 1,280 | 0.004 | 1,280 | 0.004 |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | |||
| 3. | At the end of the year | 1,280 | 0.004 | 1,280 | 0.004 |
| F. | Mr. S K Ganguli | ||||
| 1. | At the beginning of the year | 500 | 0.001 | 500 | 0.001 |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | |||
| 3. | At the end of the year | 500 | 0.001 | 500 | 0.001 |
| G. | Mr. B K Goswami | ||||
| At the beginning of the year | Nil | Nil | Nil | Nil | |
| Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | Nil | Nil | Nil | |
| At the end of the year | Nil | Nil | Nil | Nil | |
| H. | Mr. C K Mahajan | ||||
| 1. | At the beginning of the year | Nil | Nil | Nil | Nil |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | Nil | Nil | Nil |
| 3. | At the end of the year | Nil | Nil | Nil | Nil |
| I. | Mr. S C Kumar | ||||
| 1. | At the beginning of the year | Nil | Nil | Nil | Nil |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | ||||
| Nil | Nil | Nil | Nil | ||
| 3. | At the end of the year | Nil | Nil | Nil | Nil |
| J. | Mr. Kamal Samtani | ||||
| 1. | At the beginning of the year | 515 | 0.001 | 515 | 0.001 |
| 2. | Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease | Nil | |||
| 3 | At the end of the year | 515 | 0.001 | 515 | 0.001 |
V) INDEBTEDNESS -Indebtedness of t he Company including interest outstanding/accrued but not due for payment.
(Rs. In lacs)
| Secured Loans excluding deposits | Unsecured Loans | Deposits | Total Indebtedness | |
| Indebtedness at the beginning of the financial year | ||||
| i) Principal Amount | 60269.35 | 51395.08 | - | 111,664.43 |
| ii) Interest due but not paid | 137.10 | 5235.43 | - | 5,372.53 |
| iii)Interest accrued but not due | 162 | - | - | 162 |
| Total (i+ii+iii) | 60,568.45 | 56630.51 | - | 117,198.96 |
| Change in Indebtedness during the financial year | ||||
| * Addition | - | 6,414.20 | - | 6,414.20 |
| * Reduction | 8,879.52 | 3,695.21 | - | 12,574.74 |
| Net Change | (8,879.52) | 2,718.99 | - | (6160.54) |
| Indebtedness at the end of the financial year | ||||
| i) Principal Amount | 50,270.73 | 54,304.70 | - | 1,04,575.43 |
| ii) Interest due but not paid | 1,399.82 | 3,454.97 | - | 4,854.78 |
| iii)Interest accrued but not due | 18.38 | 1,589.83 | - | 1,608.22 |
| Total (i+ii+iii) | 51,688.93 | 89,349.50 | - | 1,11,038.43 |
VI. REMUNERATION OF DIRECTORS A ND KEY MANAGERIAL PERSONNEL*-
A. Remuneration to Managing Direct or, Whole-time Directors and/or Manager:
(Rs in Lacs)
| S. No | Particulars of Remuneration | Name of MD/WTD/ Manager | Total Amount | ||||
| Mr. Gurmit Singh Mann (Chairman) | Mr. Gurpal Singh (MD) | Ms. Gursimran Kaur Mann (Managing Director) | Mr. Sanjay Tapriya (CFO) | Mr. S N Misra | |||
| 1 | Gross salary | 48.00 | 33.00 | 24.08 | 24.12 | 42.05 | 171.25 |
| (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 | 48.00 | 31.35 | 23.41 | 23.20 | 32.22 | 158.18 | |
| (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 | - | 1.65 | 0.67 | 0.92 | 9.83 | 13.07 | |
| (c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 | - | - | - | - | - | - | |
| 2 | Stock Option | - | - | - | - | - | - |
| 3 | Sweat Equity | - | - | - | - | - | - |
| 4 | Commission | - | - | - | - | - | - |
| - as % of profit | |||||||
| - others, specify… | |||||||
| 5 | Others, please specify | - | - | - | - | - | - |
| Total (A) | 48.00 | 33.00 | 24.08 | 24.12 | 42.05 | 171.25 | |
| Ceiling as per the Act | 48.00 | 48.00 | 48.00 | 48.00 | 48.00 | ||
* Standalone figures from the company
B. Remuneration to other directors: Nil
(Rs in Lacs)
| S. No | Particulars of Remuneration | Name of Directors | Total Amount | ||||
| Mr. S K Ganguli | Mr. S C Kumar | Mr. B K Goswami | Mr. C K Mahajan | Mr. Abhay Kumar Singh | |||
| 1 | Independent Directors | ||||||
| Fee for attending board committee meetings | 1.695 | 1.695 | 1.695 | 0.68 | 0.645 | 6.41 | |
| Commission | - | - | - | - | - | - | |
| Others, please specify | - | - | - | - | - | - | |
| Total (1) | |||||||
| 2 | Other Non-Executive Directors | ||||||
| Fee for attending board committee meetings | - | - | - | - | - | - | |
| Commission | - | - | - | - | - | - | |
| Others, please specify | - | - | - | - | - | - | |
| Total (2) | - | - | - | - | - | - | |
| Total (B)=(1+2) | 1.695 | ||||||
| Total Managerial | |||||||
| Remuneration | 1.695 | 1.695 | 1.695 | 0.68 | 0.645 | 6.41 | |
Overall Ceiling as per the Act: As per Rule 4 of the Company Rules (Appointment and Remuneration of Managerial Personnel) 2014 there is prescribed ceiling of Rs. One lac per meeting of the Board or Committees thereof in a financial year.
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
| S. No | Particulars of Remuneration | Key Managerial Personnel | Total Amount | ||
| CEO | CS | CFO | |||
| 1 | Gross salary | - | 15.80 | - | 15.80 |
| (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 | - | 14.25 | - | 14.25 | |
| (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 | - | 1.55 | - | 1.55 | |
| (c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 | - | - | - | - | |
| 2 | Stock Option | - | - | - | - |
| 3 | Sweat Equity | - | - | - | - |
| 4 | Commission | - | - | - | - |
| - as % of profit | - | - | - | - | |
| others, specify… | - | - | - | - | |
| 5 | Others, please specify | - | - | - | - |
| Total | - | 15.80 | - | 15.80 | |
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
During the financial year under report the Company has not received any penalties / punishment/ compounding of offences under the Companies Act, 2013.
Annexure-3
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Energy conservation measures taken
1. Modification of the Centralized Lubrication System in all three sugar units has resulted savings in lubricant cost.
2. Brine Recovery System at Simbhaoli Sugar Division (SSD) reduces effluent quantity substantially and recovers salt and caustic.
3. Exhaust condensate heat recovery improves the steam savings at SSD and CSD.
4. Condensate Cooling System has been modified for reduction in effluent generation, ground water saving and steam saving by heating DM water at SSD and CSD.
5. Installation of Planetary Drive with rope coupling on last mill in CSD has reduced loss in bagasse which translated into equivalent gain in sugar recovery.
6. Installation of Magma Mixer at CSD has used for reprocessing of moist sugar.
7. Installation of PRDS, Which improved efficiency of plant working and avoided unwanted stoppages at CSD.
8. Chopper Hood Modification in BSD has reduced load and stoppages at mills.
(b) Additional investments and proposals for reduction of consumption of energy
i. Activities are regularly being pursued on continuous basis for reducing the steam and power consumption in all three sugar and alcohol plants.
ii. Further Steam saving is planned at all the units with the replacement of high pressure steam from boiling house with low pressure steam.
(c) Impact of above measures
The above measures have reduced the power consumption at all the sugar units and bagasse saving in all the units has increased. SSD and CSD are able to utilize the saved bagasse for off-season power generation and raw sugar processing. Bagasse saved at BSD is utilized for off season consumption.
TECHNOLOGY ABSORPTION, ADAPTATION AND RESEARCH AND DEVELOPMENT
1. Efforts made
Efforts made and steps taken in the previous years towards technology absorption, adaptation and innovations were continued during the year.
2. Benefits
The benefits derived in the form of cost reduction and the improvement in the quality of the product continued to be available to the Company.
3. Particulars of technologies imported during the last five years
Not applicable
Disclosure of particulars with respect to technology absorption for the year ended March 31, 2015.
I Specific areas in which research and development carried out by the Company
1) The heating of condensate for superheated wash water through exhaust condensate has been introduced to reduce the steam consumption.
2) Steam saving is planned by automation at evaporator to achieve constant syrup brix.
3) VFD has been provided on boiler feed pump motor to be minimise the running load.
4) Capacitors are provided on raw water pump motor to increase the power factor.
5) Condensate cooling is being adopted this year, which is expected to reduce bore well water and energy consumption.
II Benefit derived
(i) Power consumption reduced significantly while sale of power increased.
(ii) Company saved bagasse that will be helpful in off season raw processing and power generation.
III. Future plan of action
Efforts will be made to enlarge these activities/capacities in future.
IV. Expenditure on Research & Development (R & D)
The expenditure in incurred on Research and development has been included under other expenditure heads.
Form of Disclosure of particulars with respect to conservation of energy for the year ended March 31, 2015
A. Power and fuel consumption
| S.No | Particulars | Unit | Year ending March 31, 2015 | Year ending March 31, 2014 |
| 1 | Electricity | |||
| Purchased | ||||
| Units | Kwh (000) | 1752 | 1454 | |
| Total Amount | Rs Lacs | 86.38 | 77.08 | |
| Rate/Unit | Rs/Kwh | 4.93 | 5.30 | |
| Own Generation | ||||
| (i) Through diesel generator | ||||
| Units | Kwh (000) | 313 | 362 | |
| Unit per ltr. of diesel oil | Kwh | 3.05 | 3.24 | |
| Total Amount | Rs Lacs | 64.13 | 73.55 | |
| Cost/Unit | Rs/Kwh | 20.49 | 20.34 | |
| (ii) Through steam turbine | ||||
| Units | Kwh (000) | 93650 | 83549 | |
| Units per ltr. of fuel/gas | Kwh | N.A. | N.A. | |
| Total Amount | Rs in lacs | 820.29 | 743.31 | |
| Cost/Unit | Rs/Kwh | 0.88 | 0.89 | |
| 2 | Coal/Coke | |||
| Quantity | Tonnes | 2.75 | Nil | |
| Total Cost | Rs Lacs | 0.38 | Nil | |
| Average Rate | Rs/MT | 13832 | N.A. | |
| 3 | Furnaceoil/L.D.O | |||
| Quantity | Kilo Ltrs. | Nil | Nil | |
| Total Cost | Rs Lacs | Nil | Nil | |
| Average Rate | Rs/K Ltrs | N.A. | N.A. | |
| 4 | Others | |||
| Fire Wood | ||||
| Quantity | Tonnes | Nil | 508 | |
| Total Cost | Rs in Lacs | Nil | 18.00 | |
| Average Rate | Rs/MT | N.A. | 3545 | |
| Bagasse/Husk (Purchased) | ||||
| Quantity | Tonnes | 7983 | 7905 | |
| Total Cost | Rs. Lacs | 174.97 | 146.91 | |
| Average Rate | Rs./MT | 2192 | 1858 |
B. Consumption per MT of Sugar Production
| Particulars | Unit | Year ending March 31, 2015 | Year ending March 31, 2014 |
| 1 Electricity | Kwh | 369 | 362 |
| 2 Coal/Coke | Tonnes | 0.000 | 0.000 |
| 3 Fire Wood | Tonnes | 0.000 | 0.000 |
| 4 Bagasse (Purchased) | Tonnes | 0.000 | 0.000 |
C. Consumption per K. Ltr. Of Alcohol Production
| Particulars | Unit | Year ending March 31, 2015 | Year ending March 31, 2014 |
| 1 Electricity | Kwh | 318 | 232 |
| 2 F.O./L.D.O | K.Ltrs. | 0.000 | 0.000 |
| 3 Bagasse/Husk (Purchased) | Tonnes | 0.352 | 0.343 |
NOTES:
- For electricity generated through diesel generator, cost of the diesel has been considered.
- Since various types of fuel used are alternative to each other, no standard can be fixed for their consumption.
- Due to change in mix of fuel used, no comparison can be made with the earlier years.
- Cost of electricity generated through steam turbine has been arrived at after giving credit for the exhaust steam subsequently used in the manufacturing process.
- Costs have been given based on the records maintained under the Cost Accounting Records Rules, applicable to Sugar and Alcohol industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
Activities relating to export; initiatives taken to increase exports; development of new export markets for products and services; exports and import plans are mentioned in the Directors Report. Total foreign exchange used and earned for the year ended March 31, 2015: Mentioned in the Directors Report.
Annexure - 4
Information pursuant to Section 197(12) of the Companies Act 2013 read w ith Rule 5(1) of the Companies (A ppointment and Remuneration of Managerial Personnel) Rules, 2014
The manufacturing units of the Company comprise of about 80% of the employees at the workers level. The Company has total 1586 permanent employees inclusive of workers on rolls as on March 31, 2015. The median remuneration as on March 31, 2015 is Rs. 15,775 per month which is increased by 5.61% from Rs. 14,937 per month during the financial year 2014-15.
Ratio of the Remuneration of each Director/KMP to the median remuneration of all the employees of the Company for the financial year.
| Median remuneration of all the employees of the Company for the Financial year 2014-15 | Rs.15,775* Per Month |
| The percentage increase in the median remuneration of employees in the Financial year | 5.61 |
| The number of permanent employees on the rolls of Company as on 31 march 2015 | 1,586 |
*inclusive of the workers at the manufacturing units
As the sugar industry is running into losses, there has been no substantial increase in the remuneration of the Directors/KMPs for the financial year 2014-15. The details are as follows:
| Name of Director | Ratio of remuneration to median remuneration of all employees | % increase in remuneration in the Financial Year 2014-15 |
| Executive Directors | ||
| Mr. Gurmit Singh Mann, Chairman | 25.35 | - |
| Mr. Gurpal Singh, Managing Director | 18.80 | - |
| Ms. Gursimran Kaur Mann, Managing Director | 13.71 | 10% |
| Mr. Sanjay Tapriya, Director-CFO. | 14.70 | 10% |
| Mr. S N Misra, Chief Operating Officer | 23.25 | 10% |
| Mr. Kamal Samtani-Company Secretary | 8.24 | 7.5% |
Notes:
1. The ratio of remuneration median remuneration is based on remuneration paid during the period April 1, 2014 to March 31, 2015
2. The independent directors are being paid only the sitting fees and the relevant disclosures are made in the Corporate Governance report forming part of this Annual Report.
the explanation on the relationship between average increase in remuneration and company performance;
Revenue from operations for the year 2014-15 is Rs. 856.26 crore as compared to Rs. 835.78 crore for the year 2013-14. Although, there is no direct relationship between remuneration and company performance as the remuneration is paid at par with the industrial norms for retention of employees with the Company.
comparison of the remuneration of the Key Managerial Personnel against the performance of the company;
There is no direct relationship between remuneration of KMPs and company-performance as the remuneration is paid within industry norms for retention of KMPs with the Company.
variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies
On account of continued losses of four consecutive years, market capitalization of the Company as on March 31, 2014 was 46.01 Crore and March 31, 2015 was 31.05 Crore. With a decrease of 32.5%. Since earning per share (EPS) is negative no comparative data is available for comparison.
average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;
There was no substantial increase on the remuneration of the employees during the year. comparison of the each remuneration of the Key Managerial Personnel against the performance of the company;
As aforementioned, the Company is continuously suffering losses, with erosion of substantial part of its net-worth and increased dependency on the Government policy change. The Company has been paying for retention of KMPs within the permissible limits as prescribed in schedule V of the Companies Act, 2013.
As regarding the Company Secretary, he has been paid the remuneration as per the contractual arrangement and sharing of responsibilities with the management.
the key parameters for any variable component of remuneration availed by the directors;
As per terms of employment, commission on net profit is the only variable component of remuneration to Whole Time Directors. On account of the continued losses there was no commission paid to any of the Directors.
the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;
None of the employees has been paid remuneration in excess of the highest paid Director during the year. affirmation that the remuneration is as per t he remuneration policy of the company.
The remuneration is being paid as per the remuneration policy of the Company.
There was no employee of the Company who has been paid remuneration of the under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) rules 2014.
Annexure -5
FORM AOC-1
(Pursuant to first proviso to sub - section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014.Statement containing salient features of the financial statement of subsidiaries / associate companies / joint ventures.
(Amount in Lacs)
Part "A" : Subsidiaries
| Name of subsidiary | Integrated Casetech Consultants Pvt Ltd | Simbhaoli Global Commodities, DMCC | Simbhaoli power Limited | Simbhaoli Sprits Limited | Simbhaoli Speciality Sugars Pvt Ltd |
| Particular | Year ended 31.03.2015 | Year ended 31.03.2015 | Year ended 31.03.2015 | Year ended 31.03.2015 | Year ended 31.03.2015 |
| Reporting currency and Exchange rate | N.A. | USD and Exchange Rate is taken as INR 61.22 for Statement of Profit & Loss items, INR 62.59 for Balance Sheet items and Share Capital at INR 48.86 Per US$ | N.A. | N.A. | N.A. |
| Share Capital | 23.58 | 39.94 | 443.68 | 3,180.00 | 1.90 |
| Reserve & | 700.36 | (71.54) | 1,389.63 | 15,720.69 | 89.07 |
| Surplus | |||||
| Total Assets | 1,529.56 | 107.89 | 28,977.25 | 29,223.39 | 100.53 |
| Total Liabilities | 1,529.56 | 107.89 | 28,977.25 | 29,223.39 | 100.53 |
| Investments | 150.15 | - | 214.08 | - | - |
| Turnover | 2,355.01 | 416.08 | 5,560.05 | 942.06 | - |
| Profit before taxation | 105.05 | (32.73) | 310.31 | (2,486.54) | (10.12) |
| Provision for taxation | 51.48 | - | 925.63 | - | - |
| Profit after taxation | 53.57 | (32.73) | (615.32) | (2,486.54) | (10.12) |
Part " B" : Associates and Joint ventures Considered in Consolidation
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures
| Name of Joint Ventures | Uniworld Sugars Private Limited |
| 1. Latest audited Balances Sheet Date | 31.03.2015 |
| 2. Shares of Joint Ventures held by the company on the year end | |
| No. | 27653770 |
| Amount of Investment in Joint Venture | 7,332.50 |
| Extend of Holding % | 43.67% |
| 3. Description of how there is significant influence | As Company along with its affilates holds 50% shares |
| 4. Reason why the associate/joint venture is not consolidated | N.A. |
| 5. Networth attributable to Shareholding as per latest audited Balance Sheet | 5153.65 |
| 6. Profit / Loss for the year | (2,054.59) |
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