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HARINAGAR
SUGAR MILLS LIMITED
Annual Report and Accounts 2007 - 2008
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ADMINISTRATIVE OFFICE : World Trade Centre, Centre - 1, 10th Floor, Cuffe Parade, Mumbai - 400 005.
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HARINAGAR SUGAR MILLS LIMITED MUMBAI Regd. O f f i c e : 207, Kalbadeui Road, Mumbai-400 002.
NOTICE
NOTICP] is hereby given that the SEVENTY-SEVENTH Annual General Meeting of the Shareholders of HARINAGAR SUGAR MILLS LIMITED, will be held at it's Administrative Office at World Trade Centre, Centre No. 1, 10th Floor, Cuffe Parade, Mumbai - 400 005 on Tuesday, 30th September, 2008 at 5.30 p.m. to transact the following business : 1. To receive and adopt the Report of the Directors and the Audited Balance Sheet and Profit & Loss Account for the year ended 31st March, 2008. To declare a Dividend. To elect a Director in place of Shri Madhusudanlal N. Pittie, who retires by rotation under Article 102 of the Articles of Association of the Company and being eligible, offers himself for re-election. To elect a Director in place of Shri Vivek M. Pittie, who retires by rotation under Article 102 of the Articles of Association of the Company and being eligible, offers himself for re-election. To appoint Auditors for the Current Year and to fix their remuneration. By Order of the Board of Directors For HARINAGAR SUGAR MILLS LIMITED Mumbai, Dated : 31st August, 2008. L. B. AGARWAL Director
2. 3.
4.
5.
NOTES :
1.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER. THE REGISTER OF MEMBERS AND TRANSFER BOOKS OF THE COMPANY WILL REMAIN CLOSED FROM MONDAY, 22ND SEPTEMBER, 2008 TO TUESDAY, 30TH SEPTEMBER, 2008 BOTH DAYS INCLUSIVE. \ MEMBERS ARE REQUESTED TO NOTIFY IMMEDIATELY ANY CHANGE IN THEIR ADDRESS TO THE COMPANY.
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3.
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31.03.2007
Rs.
Gross Profit subject to Depreciation and Taxation Brought forward from the previous year as per Profit & Loss Appropriation A/c Excess provision for Income Tax (earlier year) written back Excess provision for Wealth Tax (earlier year) written back TOTAL
7,61,61,690 22,78,08,851
Out of this, provisions have been made for Year ended 31.03.2008
Rs.
31.03.2007
Rs.
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv)
Depreciation 7,22,53,607 Provision for Income Tax (current year) 47,16,000 Provision for Fringe Benefit Tax (current year) 16,70,000 Provision for Wealth Tax (current year) 43,640 Provision for Deferred Tax Liability 2,31,00,000 Transferred to Molasses Storage Tank Fund Provision for Income Tax (earlier years) Provision for Fringe Benefit Tax (earlier year) Interim Dividend (already paid) Corporate Tax on Interim Dividend (already paid) Proposed Dividend 9,59,952 Corporate Tax on Proposed Dividend 1,63,144 Transferred to General Reserve Balance carried over to next year as per Profit & Loss Appropriation A/c 23,48,51,473 TOTAL 33,77,57,816
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Your Directors are pleased to recommend a dividend @ Re. I/- per share for the year ended 31st March, 2008, which will be paid after approval by the Shareholders. The proposed dividend shall entail an outflow of Rs. 11,23,0967- (inclusive of Corporate Tax on dividend). Your Company has been diligently implementing and meeting all its obligations in respect of pollution control as stipulated by the Bihar State Pollution Control Board as well as the Central Pollution Control Board. Your Directors are pleased to inform you that your Company has been given Industrial Pollution Control Award from time to time by the Bihar State Pollution Control Board as per details mentioned as under:1996- 1997 1997- 1998 1999- 2000 2000- 2001 2004- 2005 2005- 2006
3.
First Award Third Award Third Award First Award Third Award Second Award
For the year 2006-07 and 2007-08, the Bihar State Pollution Control Board has not awarded the "Industrial Pollution Control Award" to any unit. 4. Season 2007-2008 : The following are the figures of Cane Crushed, Sugar Produced and Sugar Recovery during the Accounting Year/Sugar Year 2007-2008 and 2006-2007. Accounting Year 1st April to 31st March Year Period of Crushing Gross days Cane Crushed (Qtls.) Cane Crushed Per gross day (M.T.) Net Sugar Produced (Qtls.) Sugar Recovery 2007-2008 01.04.2007
to
31.03.2008
130
1,27,52,952.44
1,21,22,054.62
1,19,56,637.96
1,32,10,065.74
9,810
9,397
9,801
9,303
12,20,562.51
11,00,461.63
11,59,794.32
11,91,545.63
9.57
9.08
9.70
9.02
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HARINAGAR SUGAR MILLS LIMITED, MUMBAI The cane crushed and sugar recovery of your Factory during the season 200708 have been the highest in the State of Bihar. 5. Distillery : (a) Your Directors are pleased to inform that the 45 KLPD Ethanol Plant was successfully commissioned on 5th March, 2008. (b) The production at the Distillery stabilized in a very short period of time without any significant teething problems. (c) The quality of the product has been well appreciated by the buyers.
The relevant figures pertaining to the operation of the Distillery Plant during the Accounting Year 2007-2008 are as follows:i) ii) iii) iv) v) 6. Period of Production Duration (days) Quantity of Molasses distilled (Qtls.) Alcohol produced (B.L.) Alcohol recovery (%) 05-03-2008 to 31-03-2008 27 55,042 12,28,960 22.33
Sugar Policy during the Season 2007-2008 and onwards : (a) The Levy : Free ratio is maintained at 10 : 90.
(b) Sugarcane Price : (i) The Statutory Minimum Cane Price for the season 2007-2008 was increased vide Notification No.GSR 759(E)/Ess.com./Sugarcane dtd. 06th December, 2007 from Rs.80.25 to Rs.81.18 per quintal, linked to a basic recovery of 9% with a premium of Rs.0.90 per quintal for every 0.1% increase in recovery above 9%. The minimum price so payable by your Factory was Rs. 81.18 per quintal at gate.
(ii) The sugarcane price paid by the Industry in Bihar for the season 2007-08 was Rs. 967- per quintal at factory gate comprising of Statutory Minimum Cane Price (SMP) as notified by the Government of India and Advance against additional cane price (payable in instalments), if any, under clause 5A of the Sugarcane (Control) Order, 1966. (iii) The sugarcane price paid by the Industry in Bihar for the season 2007-08 was Rs. 87.50 per quintal at outcentre comprising of Statutory Minimum Cane Price (SMP) as notified by the Government of India after deducting transport rebate and Advance against additional cane price (payable in instalments), if any, under clause 5A of the Sugarcane (Control) Order, 1966. (iv) An additional amount @ Rs.5/- per quintal was being paid for certain specified varieties i.e. CoP 9301, CoS 88230, CoS 8436 & CoS 96268. (v) A deduction @ Rs.7/- per quintal was being made for specified rejected and unapproved varieties i.e. CoSe 92423, CoS 91269 & CoLk 8102.
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(ii) The issue price of levy sugar sold through Public Distribution System (P.D.S.) has remained at Rs.13.50 per kg. (iii) The Department of Food & Public Distribution, Government of India, has instituted an enquiry into the cost structure of the sugar industry and has accordingly made a reference to the Tariff Commission, Ministry of Commerce & Industry, to undertake a study of zonal conversion cost schedules, escalation formula, return on capital and other issues related to determination of levy sugar prices for the sugar season 2007-2008 to 2009-2010. The said expert body has not submitted its report in this regard till date. (d) Excise Duty : (i) The rate of excise duty on levy sugar and free sale sugar continues to be the same as was fixed vide Notification No. 7/2006-Central Excise dtd. 1st March, 2006 and is as follows:Levy sugar Free sale sugar : : Rs. 387- per qtl. Rs. 717- per qtl.
Further, in addition to the above, Sugar Development Cess at the rate of Rs.147- per quintal was also payable in case of both levy sugar and free sale sugar upto 31-12-07. From 01-01-08 the rate of Cess was increased from Rs.14/- to Rs.157- per quintal vide Notification No. S.O. HE) dtd. 1st January,2008. The rate of Cess was further increased from Rs.157- per quintal to Rs.247- per quintal with effect from 01-03-2008 vide Notification No. S.O. 392(E) dtd. 25th February, 2008. (ii) The excise duty on molasses was maintained at Rs.7507- per tonne fixed vide Notification No. 3/2006-Central Excise dtd. 1st March, 2006.
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HARINAGAR SUGAR MILLS LIMITED, MUMBAI (iii) In addition to the above excise duty, Education Cess @ 2% on the excise duty so payable is also applicable on all excisable goods (i.e. in case of sugar, molasses, ethanol and impure spirit). (iv) Further, Secondary and Higher Education Cess @ 1% of the aggregate of duties of excise has been imposed on excisable goods (i.e. in case of sugar, molasses, ethanol and impure spirit) with effect from 1st March, 2007. This Cess is in addition to the Education Cess of 2% as mentioned above. (e) Future Trading : The National Commodity and Derivatives Exchange (NCDEX) has made the following changes/new introductions with regard to sugar:i) The open interest limits have been revised with effect from February, 2008 as under:A) B) From 7,500 tonnes to 20,000 tonnes for members and from 2,500 tonnes to 7,500 tonnes for clients in respect of the near month. The total open interest limit in respect of all months was increased from 30,000 tonnes to 50,000 tonnes for members and from 10,000 tonnes to 20,000 tonnes for clients.
ii)
With effect from contracts pertaining to January, 2009 and onwards, the following changes have been made:A) B) C) Seller may deliver 'S' Grade sugar against the contract of 'M' Grade sugar at a discount of Rs.55/- per quintal. Sugar of only current season must be delivered. Two new delivery centres have been opened at Gorakhpur and Sitapur.
iii) Future contracts are available up to 12 months as against only 6 months which was available hitherto i.e. now future trading up to 12 months is permitted. (f) Sugar Exports : (i) The validity period of the cash incentives by way of part re-imbursement of expenditure incurred for the purpose of internal transport and freight charges (including ocean freight and handling and marketing charges) available on export of sugar under Open General License (O.G.L.) has been extended up to 30th September, 2008 vide Order dtd. 28th March, 2008 issued by the Department of Food and Public Distribution, Government of India i.e. payment of Rs.13507- per tonne of sugar exported from sugar mills located in the coastal states of India and payment of Rs. 14507- per tonne of sugar exported from sugar mills located in states other than the coastal states of India.
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B)
(iii) The Government of India has extended the validity of Duty Entitlement Pass Book Scheme (DEPB) by another year i.e. upto 31st March, 2009 - exports of sugar would be entitled to benefit under this scheme. (iv) Due to the various incentives given by the Government of India and initiatives taken by Indian Sugar Exim Corporation (ISEC) for promoting the export of raw sugar, which has constituted more than 50% of the total quantity of sugar . exported, India will export in 2007-08, the largest quantity ever in its history in a single sugar year (1st October to 30th September). It is expected that the total quantity of sugar exports from India during this sugar year would be in the range of 4.5 million tonnes. (g) Ethanol : (i) The Ethanol blending programme i.e. doping of Ethanol with petrol (EBP) is progressing at a very slow pace across the country.
(ii) Presently, the quantity of Ethanol being lifted by the Oil Companies is only equivalent to approximately 3% blending on an All India basis. (iii) Although the Group of Ministers (GOM) had recommended 10% blending to be made mandatory from October, 2008, no steps for implementing this recommendation has been taken either by the Government of India or the Oil Companies. (iv) No decision has been taken on the recommendation of the Department of Food and Public Distribution, Government of India, i.e. to amend the Central Sales Tax Act, 1956 through appropriate legislation to include "denatured anhydrous alcohol of minimum 99% strength" in the list of "goods of special importance" so as to facilitate unhindered interstate movement of Ethanol. (v) Your Company succeeded in getting tenders for supply of Ethanol to depots in Jharkhand State. However, due to levy of import duty on Ethanol by the State
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HARINAGAR SUGAR MILLS LIMITED, MUMBAI Government, it has become unviable for the Oil Companies to supply Ethanol blended petrol and thus they have not commenced purchases of Ethanol against the tender so awarded to your Company. (vi) The Oil Companies are not issuing/finalizing tenders for purchase of Ethanol in West Bengal/Chhatisgarh due to levy of various taxes/duties and imposition of various conditions by the respective State Governments thereby rendering the entire Ethanol blending programme unviable for the Oil Companies. (vii) The various State Governments still continue to impose restrictions on the use of Molasses for production of Ethanol and give priority to production of Rectified Spirit used in the manufacture of Country Liquor. (h) The specifications of Organic Fertilizer manufactured using Press Mud and Spent Wash from distilleries have been deleted from the Fertilizer (Control) Order, 1985 vide Notification No.837(E) dtd. 10th April, 2008 issued by the Ministry of Agriculture, Government of India. This will help in removing the hindrances which were being faced by various sugar factories having attached distilleries, in selling the Bio-compost being manufactured by them. (i) Interest Free Loan : (i) With a view to improve the liquidity position of sugar factories for enabling them to clear cane price arrears of sugar season 2006-07 and cane price of sugar season 2007-08 relatable to statutory minimum price for the respective sugar seasons, to the sugarcane farmers, the Government of India, vide Notification dtd. 7th December, 2007 has notified the "Scheme for Extending Financial Assistance to Sugar Undertakings, 2007" ('SEFASU', 2007).
(ii) The salient features of the said scheme are as under :A) Interest free loans equivalent to notional Central Excise Duty payable on total production of sugar during sugar season 2006-07 and 2007-08 shall be granted to the sugar factories. The Central Excise Duty shall be net of Sugar Cess. The above mentioned loan amount shall be sanctioned to each sugar factory by the concerned banker providing working capital facilities to the concerned sugar factory. Full interest subvention (upto maximum 12%) will be provided to all banks giving this facility to the sugar factories - 5% will be met out of general budget provisions of the Central Government and the remaining 7% from the Sugar Development Fund. The total duration of the loan would be 4 years including 2 years moratorium and thereafter to be repaid in 24 monthly instalments.
B)
C)
D)
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