Você está na página 1de 80

The Oudh Sugar Mills Limited

CERTIFICATE

CERTIFICATE

PREFACE

Welcome to Sugar, an open source Customer Relationship Management (CRM) application. Sugar enables

organizations to efficiently organize, populate, and maintain information on all aspects of their customer
relationships. It provides integrated management of corporate information on customer accounts and contacts, sales leads and opportunities, plus activities such as calls, meetings, and assigned tasks. The system seamlessly blends all of the functionality required to manage information on many aspects of your business into an intuitive and user-friendly graphical interface. The system also offers a graphical dashboard to track the sales pipeline, the most successful lead sources, and the month-by-month outcomes for opportunities in the pipeline. Sugar is based on an open source project, and therefore, advances quickly through the development and contribution of new features by its supporting community.

ACKNOWLEDGEMENT

I would like to thanks many individuals at Oudh Sugar Mills Limited who have contributed greatly to the success of this project. Thanks are due to Mr. V.K Periwal and Mr. Nitin Sareen (project guide) for their valuable assistance in preparing

the manuscript. The idea of this project was guided by my project guide, Mr. Nitin Sareen . My special thanks are not only for the idea but also for the encouragement and unstinted support throughout the preparation of the project.

LIST OF CONTENTS

Front page or Title page.


Certificate. Preface. Acknowledgement. List of Tables. List of Graphs. List of Abbreviations. Introduction. (a) General profile of the organization. (b) Products and Services. Need of study or Research Problem.

Objective of the Study. Hypothesis of the Study(optional). Research Methodology. (a) Tools used in the study. (b) Sources of Data. Data presentation and Analysis. (a) Table form. (b) Graphical. Findings of the study. Suggestions and Recommendations.

Bibliography.
Appendix. (a) Other relevant information.

LIST OF TABLES

Performance at a glance. FINANCIAL STATEMENTS Standalone:Balance sheet as on 30th june 2010. Profit and loss account for the year ended 30th june 2010. Cash flow statement for the year ended 30th june 2010. Consolidated:Consolidated Balance sheet as on 30th june 2010. Consolidated Profit and Loss Account as at 30th june 2010. Consolidated Cash Flow Statement for the ear ended 30th june 2010.

Subsidiaries:Balance sheet as on 31st march 2010. Profit and Loss Account for the year ended 31st march 2010.

LIST OF GRAPHS

Total income graph.

EBIT graph.
PAT graph. EPS graph. Net Worth graph. Graph showing performance of companys equity shares.

LIST OF ABBREVIATIONS

O.S.M.L- Oudh Sugar Mills Limited

C.A.C.P- Commission on Agricultural Costs and Prices


S.A.P- State Advised Price S.S- Sugar Session S.M.P- Statutory Minimum Price P.D.S- Public Distribution System F.R.P- Fair and Remunerative Price M.A.T- Minimum Alternative Tax

INTRODUCTION

GENERAL PROFILE OF ORGANISATION

The Oudh Sugar Mills Limited (OSML) belongs to the renowned K.K. Birla Group of Companies. K.K. Birla Group is a major player in key industries like fertilizers, chemicals, heavy engineering, textiles, shipping, media etc. apart from sugar. From a modest beginning in 1932, OSML has grown to become the pioneers in Sugar Industry. It is one of the largest and rapidly growing Company in the Sugar Industry.

Shri C.S. Nopany, Chairman cum Managing Director, is in the overall management of the Company and is the driving force of the Company.

Through organic and inorganic modes of growth, the Company has cautiously but consistently grown from a single unit sugar manufacturing company to a company having four sugar manufacturing units with an aggregate crushing capacity of about 28,700 tonnes of sugarcane per day, two Distilleries producing 160

kilo litre per day (KLPD) of industrial alcohol/ethanol, three Co-generation Power Plants with a total capacity of 60 MW Power, Bio-Compost plant producing organic fertilizer. Sugar Mills : Hargaon Sugar Mills, Hargaon, Dist. Sitapur(U.P.) with a crushing capacity of about 10,000 tonnes of sugarcane per day. New Swadeshi Sugar Mills, Narkatiaganj, Dist. West Champaran (Bihar) with a crushing capacity of about 7,500 tonnes of sugarcane per day. Rosa Sugar Works, Rosa, Dist. Shahjahanpur, (U.P.) with a crushing capacity of about 4,200 tonnes of sugarcane per day. New India Sugar Mills, Hata, Dist. Kushinagar, (U.P.) with a crushing capacity of about 7,000 tonnes of sugarcane per day. Distilleries : Hargaon Distillery, Hargaon, Dist. Sitapur (U.P.) with a capacity of producing 100 (KLPD) of Industrial Alcohol/Ethanol. New Swadeshi Distillery, Narkatiaganj, Dist. West Champaran (Bihar) with a capacity of producing 60 (KLPD) of Industrial Alcohol/Ethanol. Co-Generation Power Plants : Hargaon Co-generation Power Plant, Hargaon, Dist. Sitapur (U.P.) with a capacity of 15 MW Power. Narkatiaganj Co-generation Power Plant, Narkatiaganj, Dist. West Champaran (Bihar) with a capacity 10 MW Power. Hata Power Plant, Dist. Kushinagar, (U.P.) with a capacity of 35 MW Power. Organic Fertilizer : Bio-Compost Plant producing organic fertilizer marketed under the brand name Oudh Shakti Jaivik Khad

PRODUCTS AND SERVICES

Sugar :

Sugar is produced at the Hargaon Sugar Mills and Rosa Sugar Works both situated in the State of Uttar
Pradesh and at New Swadeshi Sugar Mills situated in the State of Bihar having crushing capacity of 7500, 4000 and 6500 tonnes of sugarcane per day respectively. The sugar factories are equipped with the state of the art technology to produce pure crystal cane sugar of the highest purity.

Molasses : Molasses is a by product generated in the process of manufacture of sugar. It can either be sold untreated or be used as principal feedstock for manufacture of alcohol. The molasses generated in the Companys sugar factories at Hargaon and Narkatiaganj is used as raw material in its distilleries for production of Industrial Alcohol/Ethanol.

Bagasse : Bagasse is a by product generated in the process of manufacture of sugar. It can either be sold or be captively consumed for generation of steam. The bagasse produced in the Sugar Factories is used for generation of steam.

Industrial Alcohol :

The Company has installed Distilleries at Hargaon and Narkatiaganj with a capacity to produce 11.53
million litres and 9 million litres of industrial alcohol/ethanol per annum respectively.

Ethanol : One of the most remunerative applications of molasses is in the manufacture of ethanol, an environment friendly fuel. Being an oxygenate it contains high percentage of oxygen which helps combust fuel more completely and reduces vehicular injurious emission. The Government has made blending of fuel petrol with 5% ethanol mandatory with effect from 1st October, 2003 in nine states and four union territories.

To meet the increasing demand of ethanol, the Company's Distillery at Hargaon installed

ethanol producing plant to convert Rectified Spirit into Ethanol of a capacity of 30 klpd.

Organic Fertilizer :

Spent wash, an effluent generated from processed molasses is used with press mud for the
production of organic fertilizer. The Company has installed a Bio Compost Plant at Hargaon to produce organic fertilizer which is marketed under the brand name "Oudh Shakti Jaivik

Khad".

Canning Factory :

The Company has a Canning factory at Bamrauli near Allahabad and markets its processed
food products under the brand name MORTON.

NEED OF STUDY/RESEARCH PROBLEM

To study the financial position of the sugar industry through various ratios. To study the various ratios and their impact on certain functional areas in the organization. To compare the financial position of the organization through various ratios, in the current financial year and the next .

OBJECTIVE OF STUDY

The Oudh Sugar Mills Limited is amongst the most efficient sugar companies in sugar

industry. As a Company we strive to - Excel in our core areas of competence i.e., manufacture
of sugar and allied products; Uphold and nurture the core values of good Corporate Governance, i.e. transparency, empowerment, accountability, independent monitoring and environmental consciousness; Ful fill the aspirations of customers, employees, financers and of the society in general; Provide every opportunity for employees and business associates to realise their potential to the fullest; Maximise shareholders' wealth through value addition by

integration and expansion

RESEARCH METHODOLOGY

TOOLS USED IN STUDY

MANAGEMENT DISCUSSION AND ANALYSIS REPORT ON CORPORATE GOVERNANCE FINANCIAL STATEMENTS(STANDALONE) FINANCIAL STATEMENTS(CONSOLIDATED) FINANCIAL STATEMENTS(SUBSIDIARIES) PERFORMANCE AT A GLANCE.

SOURCES OF DATA

Annual Report 2009-10(The Oudh Sugar Mills Limited)

www.birla-sugar.com
www.quickmba.com

DATA PRESENTATION AND ANALYSIS TABLES

FINDINGS AND STUDY


SUGGESTIONS AND RECOMMENDATIONS
Here are some suggestions which may help to strengthen the firm better:

The following recommendations reflect the general thrust of the Assessment. Further ideas and specific actions are indicated in the text o report, to be developed by industry and, as appropriate, government.

(1) INDUSTRY AND COMPETITION Scenario: At present the sugar industry is largely unprofitable and the business management skills are variable and often not well-developed. The notion of industry leadership is often focused on sectoral representation at state level while the profit centre is at regional level. The

technical and production needs of the industry are generally known, as is the required technology. However a whole of value chain syste approach to all aspects of operations is lacking.

Action: The Queensland industry must establish a strong mill area or mill region focus of operations. For improved mill area economic outcomes, election to the Mill Suppliers Committee specified in the (Queensland) Act should be completely free of any link whatsoever to the constitution of CANEGROWERS or ACFA, with no unity tickets permitted, and with voting to reflect economic interests of farmers. A Queensland industry body should be established to represent all mill regions (farm

and mill) on extra-regional issues (eg water, transport, health and safety). Industry must develop local economic leadership
for local negotiations, in preference to established sectoral state representational route With government support, the industry must build business management skills in the regions. An upgrading of business management training is urgently required. Industry should install a whole of value chain systems approach to all operations, particularly in relation to harvest and

transport arrangements. Within mill areas, a rationalisation of the industry into larger units of farms or farm cooperatives is
highly desirable. Government should be fully supportive of industrys efforts. Worldwide benchmarking of industry activities against the strongest competitors is required, followed by implementation of cost effective options. Millers need to work to ensure the early rationalisation of mill areas and feeder farms in Far North Queensland.

(2).THE MARKET Scenario: The world sugar price is at a low level and is likely to remain so for the short to medium term. The Australian sugar industry is fully exposed to world price at home and abroad.

Action:

Urgent continued efforts are required by government and industry to gain access to protected European, US and

Japanese markets. (3). DIVERSIFICATION Scenario: There are diversified products available such as ethanol and surplus power co-generated at the mill. Investment in ethanol for transport fuel requires market access and supply undertakings, at a price sufficiently profitable to divert sugar potential. Ethanol from molasses has limited production potential. Action:

(4). ENVIRONMENT Scenario: The sugar industry has tended to isolate itself in the environmental debate, despite having been a leader in rural environmental work.

Action:

The industry must adopt an engage not defend approach to all environmental matters and demonstrate leadership on a
catchment-focused level. The industry should continue to develop and promote voluntary programs such as COMPASS (and beyond) and advance its environmental performance through independent audits. The industry should work to ensure sustainability through ongoing education.

5. SOCIAL Scenario: The local communities in sugar regions are under pressure as a result of successive poor seasons, low prices, higher debt levels, and succession difficulties. Many cane farmers are prepared to endure extreme economic deprivation to preserve the lifestyle of the family farm, but the lifestyle itself is declining severely.

Action:
Options should be explored for allowing some industry participants to exit the industry with support, in the context of achieving more consolidated and viable industry arrangements. Further work is needed on the local impacts of industry change on industry participants and the broader community, especially the decreased labour requirements of larger farm units. Support must be provided to vulnerable communities in sugar regions, through an urgent review of existing assistance measures and the provision of training and retraining wherever necessary.

Scenario:

The research base is contracting through a sudden funding reduction. The main funding source of
facilitation work in systems-thinking solutions and best management practices will cease this year, and the industry is also losing scientists. A CRC bid is under way for sugarcane as a

biofactory.
Action: Government should investigate the continuation of supplementary funding for the development of

systems-thinking solutions, particularly towards integrated harvest and transport arrangements, in


order to consolidate strategic mill area viability.

The industry should be encouraged to leverage its intellectual property base, through seeking suitable funding partners. Industry and government should work at least to maintain and where possible broaden the researcher base serving the industry.

BIBLIOGRAPHY

Annual Report 2009-10(The Oudh Sugar Mills Limited).

www.birla-sugar.com
www.quickmba.com

APPENDIX

OTHER RELEVANT INFORMATION


CODE OF CONDUCT AND ETHICS Introduction This Code of Conduct and Ethics is made pursuant to Clause 49 (Corporate Governance) of the Listing Agreement with Stock Exchanges and shall hereinafter be known as the Code. The Code will become effective from the date it is approved and adopted by the Board of Directors of the Company.

The objective of the Code is to promote and uphold the high standards of ethics observed by the Company in conducting its business. The Code lays down a broad policy for ones conduct in dealing with the Company, fellow directors and employees and the external environment in which the Company operates.

The Company believes in conducting its business with responsibility, transparency, empowerment, honesty and environmental consciousness. The Company seeks to be a leader in its chosen area of operation and to operate and achieve excellence in everything it does.

All concerned are expected to read and understand the Code, uphold the standards prescribed therein in letter and spirit and to act within the bounds of the authority conferred upon them with duty to make and enact informed decisions and policies which result in enhancement of the value of the Company to its

shareholders and simultaneously enable the Company to ful fill its obligations to other stake holders such as
customers, employees and financers and to the society in general. Applicability of the Code The Code applies to all the members of the Board of Directors and to senior management personnel of the Company. Senior management personnel shall mean personnel of the Company who are members of its core management team excluding Board of Directors and shall comprise of all the members of management one level below the executive director, including all functional heads. Respect for individual The Companys vision is based on inspiring and unleashing creative potential in human assets of the Company. This is

possible in an environment where we all respect the rights of those around us. In this direction, we

endeavour :

a. To treat individuals in all aspects of employment solely on the basis of ability irrespective of race, caste, creed, religion, age, disability, gender, sexual orientation or marital status. b. Not to tolerate racial, sexual or any other kind of harassment. Honest and Ethical Conduct The Directors and senior management personnel are expected to act in accordance with the highest standards of personal and professional integrity, honesty and ethical conduct while working for the Company.

We consider honest conduct to be conduct that is free from any fraud or deception. The ethical conduct is
the conduct conforming to the accepted professional standards of conduct. Ethical conduct includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Conflicts of Interest Each of us has a responsibility to the Company, its shareholders and towards each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where conflict of interest might occur or appear to occur.

A conflict of interest occurs when an individuals private interest interferes or appears to interfere with the interests of the Company. The Directors and senior management personnel must act at all times in the Companys best interests and avoid putting themselves in a position where their personal interests conflict or appears to conflict with the interest of the Company. The personal interests will include those of their close relatives. Any Director or senior management personnel, who is aware of a conflict of interest or is

concerned that a conflict might develop, is required to disclose the matter promptly to the Board of
Directors in case of a Director and to the Chairperson in case of senior management personnel.

The Directors and senior management personnel shall not engage in any activity or enter into any relationship which might result in conflict of interest, either directly or indirectly. An illustrations only and not being exhaustive, some of the common instances of conflict of interest which should be avoided are given below :

a. None shall receive a personal benefit from a person or any entity which is seeking to do business or does business with the Company. They shall not participate in any decision making process of the Board

involving another entity/person in which they have direct or indirect interest. b. None shall receive remuneration, in any form, for service rendered for the Company from any source other than the Company. Corporate Opportunities None shall exploit for their personal gain opportunity that is discovered through the use of corporate property, information or position unless the opportunity is disclosed fully in writing to the Companys Board of Directors and the Board of Directors declines to pursue such opportunity. The Directors and senior management personnel are prohibited from using corporate property, information or position for personal gain and from competing with the Company. Wherever, it is difficult to differentiate

between personal and Company benefits or there are both personal and Company benefits in certain
activities, the only prudent course of conduct for the Directors and senior management personnel is to make sure that any use of corporate property or services or such transactions that is not solely for the benefit of the Company has prior approval of the Board of Directors. Confidential Information Confidentiality of information must be maintained by all concerned. Any information concerning the Companys business, its customers, suppliers etc. which has been received or to which one has access during the course of employment or dealing with the Company shall be considered as confidential unless such information is

publicly available. Such information must be held in confidence and used only for the purposes of the business of the Company and not disclosed otherwise unless authorised to do so or required to do so under law. This obligation continues for three years even after one leaves or disassociates himself from the Company. Prohibition of Insider Trading The Company has formulated a Code of Internal Procedure and Conduct for Prevention of Insider Trading and all concerned are required to comply with the requirements of the said Code. The Directors and senior management personnel and their close relatives shall not directly

or indirectly derive or attempt to derive any benefit or assist others to derive benefit when in possession of
any price sensitive/unpublished information. Fair Dealing The Company does not seek competitive advantages through illegal or unethical business practices. Each Director and senior management personnel should endeavour to deal fairly with the Companys customers, service providers, suppliers, competitors and employees. None should take advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice. The Directors and senior management personnel shall immediately bring to the notice of the Board any unethical behaviour and actual or suspected fraud. Protection and proper use of Company Assets Protecting the assets of the Company is a key responsibility of every employee. The Directors and senior management personnel

safeguard and protect the assets of the Company against misappropriation, loss, damage and ensure their efficient use. They must ensure that assets are not put into use, sold, loaned or dealt with in any other manner without appropriate authorisation. All Company assets should be accounted for and used only for legitimate business purposes of the Company. Gifts and Donations Though business gifts and donations are customary in many parts of the world they need to be viewed with caution. No Director or senior management personnel shall receive or offer, directly or indirectly, any gifts, donation or benefits which are

intended or perceived to be intended to obtain unethical favour. Nominal gifts of commemorative nature for
special events may be accepted. Corporate Social Responsibility The Company is committed to serve the community around its area of operations. The Company believes that no organization can survive in isolation and it has a responsibility towards public at large. The Company aims to reach out to the neighbouring villages, conserve the environment and nurture young people. The Company shall take requisite community development initiatives around the areas of its operations. Safety, Health and Environment The Companys vision envisages no compromise in its commitment to safety, health and responsible care for the environment. Health and safety of the people in and around its area of operations are of paramount importance to the Company.

The Company is committed to environment protection, pollution control and maintenance of ecological

balance. The Company shall maintain high standards of pollution control, environment protection and
safety. Compliance with Laws, Rules and Regulations The Company is committed to high standards of corporate governance and believes in compliance of all the laws, rules and regulations and other legal requirements directly or indirectly, effecting or concerning the Company and or required to be observed in connection with the business and affairs of the Company. The Company has endeavoured in setting standards for itself, which are ahead of time and higher than those stipulated by law. All concerned are required to comply with the applicable laws, rules and regulations both in letter and spirit. Financial and

Operational Integrity The Company is committed to disclose in its financial statements all the information
required to be disclosed under the relevant accounting standards or under any law or regulation. It is essential to record all the transactions fully and properly in the financial statements. The Company shall prepare and maintain accounts of its business affairs truly and fairly in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country. There shall be no willful omission of any transaction from the books and

records of the Company.

No record, entry or document shall be false or misleading and no undisclosed or unrecorded account, fund or asset shall be established or maintained. The Auditors shall be provided full access to all information and records of the Company. Prevention of Sexual Harassment The Company firmly believes in the rule of Justice, Equity and Fair Play which demands of the Company that it be committed to renounce all such practices as are derogatory to the dignity and self respect of women working in the Company. With this end in view the Company is committed to maintain a non-hostile work environment, free of harassment and discrimination

of whatsoever nature for all its employees particularly the women employees

With the aforesaid end in view the Compliance Officer of the Company has been authorized and empowered to closely investigate any reported case of sexual harassment and should there be the need to constitute and appoint a Sexual Harassment Investigation team consisting of such number of male/female senior employees of the Company as he/she thinks most appropriate in a given case to make a dispassionate investigation into such complaint and make any remedial suggestion to the Compliance Officer. Annual Review The Directors and senior management personnel shall affirm in writing compliance with the Code

on an annual basis i.e. in July each year. Disciplinary Actions The matters covered in the Code are of
utmost importance to the Company and are essential to the Companys ability to conduct its business in accordance with the stated values. The Directors and senior management personnel are expected to adhere to the Code in carrying out their duties for the Company. Appropriate actions will be taken by the Board of Directors in case of Directors and by the Chairperson in case of senior management personnel for breach of the Code. Actions may include serious disciplinary action, removal from office as well as other remedies to the extent permitted by law and as considered appropriate in the circumstances. Compliance Officer The Company has appointed the Secretary as Compliance Officer for the purpose of the Code. The Compliance Officer will be available to the Directors and senior management personnel to resolve their queries and

assist them in complying with the Code. Any question relating to how this Code should be interpreted or complied should be addressed to the Compliance Officer. Implementation/Modification The decision of the Board of Directors with regard to all matters relating to the Code will be final and binding on all concerned.

The Board of Directors of the Company shall have power to modify or replace the Code in part or in full, as they may deem fit from time to time in their absolute discretion.

CORPORATE ADDRESS
Registered Office Corporate Office The Oudh Sugar Mills P.O.: Hargaon Dist: Sitapur (U.P.) Pin: 261121 India Phone : 91 05862 256221 E-mail: birlasugar@birla-sugar.com Unit No. 210/212 Solaris - 1 'A' Wing (2nd Floor) Sakivihar Road Opp. L & T Gate No. 6 Andheri (East) Mumbai - 400 072

India
Phone : 91 022 2847 0249

E-mail: oudhsugar@mtnl.net.in Head Office 9/1 R.N. Mukherjee Road Birla Building Kolkata - 700 001 India Phone: 91 033 2243 0497/98 E-mail: birlasugar@birla-sugar.com

INVESTOR RELATION

Contact Addresses The Secretary

The Oudh Sugar Mills Ltd.


Unit Number 210/212, Solaris -1, 'A' Wing, 2nd Floor, Sakivihar Road, Andheri (East) Mumbai - 400072 India. Tel. No. : 91-22-2847 0249 E-mail : gnpareek@birla-sugar.com Link Intime India Pvt. Ltd., (RTA) (Unit : The Oudh Sugar Mills Limited)

C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup Mumbai - 400078. Tel No. : 91 - 22 - 25963838 E-mail : isrl@linkintime.co.in

EQUITY SHARES

Equity Shares

The Equity Shares of the Company are listed at Bombay Stock Exchange ltd., The National Stock Exchange
of India Ltd. The shares of the Company have been specified for trading in dematerialised mode only. Listing on Stock Exchanges (with Stock Codes): The Company's shares are listed with 2 Stock Exchanges: Sl. No. Stock Exchange Stock Code 1. The National Stock Exchange of India Ltd. (NSE) OUDHSUG 2. Bombay Stock Exchange Ltd. (BSE) 507260 The shares of the Company have been specified for trading in dematerialised mode only. The International Securities Identification Number (ISIN) allotted to the Equity Shares of the Company is INE594A01014. Procedural Aspects Transmission of Shares Transposition of Shares Nomination in Shares Issue of duplicate

share Certificates Change of Name Change of Address Bank Mandate - ECS Dividend Loss of Dividend Warrant Investor Complaint Quick Downloads Nomination Form Affidavit cum Indemnity Form ECS Mandate Form Letter of Indemnity

MANAGEMENT

Management of the Company vests with the Board of Directors comprising eminent industrialists,

professionals and persons having wide industrial experience and business acumen. Majority of the Directors
on the Board are independent.

The Board is headed by Shri C. S. Nopany, aged 45 years, who is the Chairman-cum-Managing Director. He is a Chartered Accountant and Master in Science of Industrial Administration from Carnegie Mellon University, Pittsburgh, USA. He is an eminent industrialist having vast industrial experience in diverse fields like sugar, tea, shipping, textiles, fertilisers and chemicals, etc. He is the past President of Indian Chamber of Commerce. He looks after the overall management and is the driving force of the Company.

The other members of the Board are : Shri S.V. Muzumdar, aged 82 years, is B.A., L.L.B. Advocate. He has

got wide and varied experience in the legal field. In addition, he is also on the Board of several other public Companies. Shri Ashvin C. Dalal, aged 74 years, is a Commerce Graduate. He is a partner in the firm of M/s. Chimanlal J. Dalal & Co., leading share and stock brokers. Shri Rohit Kumar Dhoot, aged 42 years, is a Chartered Accountant. He is a businessman of wide experience occupying position of Managing Director of Dhoot Industrial Finance Limited and Directorship in several companies. Smt. Madhu Vadera Jayakumar, aged 47 years, is a holder of Post Graduate Diploma in Management from Indian Institute of

Management, Ahmedabad and Mathematics Honours Degree from University of Delhi. She was associated
with Mineral Metals Trading Corporation during 1985-1988 and later with Citi Bank N. A. during 19882000. Shri J. N. Godbole, aged 65 years, is an ex-Chairman and Managing Director of Industrial Development Bank of India. His area of expertise include banking, financial management, corporate restructuring mechanism etc. Shri Haigreve Khaitan, Aged 40 years, is a practicing Advocate since 1995 and a Partner in Khaitan & Co. His area of expertise include Commercial & corporate laws, tax laws, mergers and acquisitions, restructuring, foreign collaboration, licensing etc. Shri C. B. Patodia, aged 62 years, possesses rich experience of over 37 years especially in Cane Marketing, Sugar Manufacturing Process, Administration and Finance. The Board of Directors is assisted by a team of competent persons

MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL SUGAR INDUSTRY REVIEW The sugar industry is one of the worlds major agro-based industries. Around 75% of the global sugar production comes from the top 10 producers, of which the top three (Brazil, India and the European Union) contribute 40% of the total As of August, 2010, global sugar production stands at 158.830

The sugar cycle

The Indian Sugar Industry is cyclical in nature. The industry downtrend starts with improved mill

profitability, prompt farmer payment resulting in higher sugarcane acreage and a bumper sugar output. This
results in supply exceeding demand, leading to a decline in sugar prices which in turn leads to lower mill profitability, delayed payment to farmers, high sugarcane arrears, lower cane production, all culminating into higher sugar prices

million tonnes, increasing just 4.65% over that of the previous year. Owing to high international prices and lingering impacts of global downturn, the worlds global consumption (163.779 million tonnes) posted a negative growth rate of 0.1244%, compared to last 10 years average of 2.64%. The world sugar economy witnessed a statistical deficit for a second year in a row

World sugar balance


2009/10 Production Consumption 158.830 163.779 2008/09 151.769 163.983 Change million tonnes 7.061 -0.204 2.555 3.472 -5.773 in % 4.65 -0.1244 5.093 7.0546 -9.5145

Surplus/deficit
Import demand Export availability End stocks Stocks/consum ption ratio in %

-4.949
52.722 52.688 54.903 33.52

-12.214
50.167 49.216 60.676 37.00

INDIAN SUGAR INDUSTRY REVIEW

In India, sugar industry is the second largest industry after textiles. The country is the second largest sugar

producer in the world (accounting 13% of the worlds sugar production). The sub-tropical region (Uttar
Pradesh) contributes almost 60% of Indias total sugar production, while the balance comes from the tropical region, mainly from Tamil Nadu, Karnataka, Maharashtra and Madhya pradesh.

Production and consumption of sugar in India

After consecutive decline in production in 2007-08 and 2008-09, Indias sugar production has started increasing. With the increase in the sugarcane output to 274 million tonnes in sugar season 2009-10, the production of sugar is expected to touch 18.75 million tonnes by the time the current sugar season comes to an end in September, 2010.

According to ISO, a further 34% production recovery is expected in the sugar year 2010-11, with a revised
production of 25.5 million tones. Indias sugar is mostly produced from sugarcane, and the swings in production were driven primarily by large swings in the acreage of land cultivated for sugarcane and rainfall patterns . The sugar consumption, on the other hand, is estimated to have grown marginally to 23.5 million tonnes. The growth is on account of rising per capita income and government interventions to adjust stocks and facilitate trade to assure adequate monthly availability. Despite rising price, the sugar demand did not reduce among bulk consumers.

Bakeries, soft drinks and local sweet manufacturers accounted for around 60% of the sugar demand. ISO estimates an approximate growth of 4% in 2010-11 in Indias sugar consumption, accounting for about 19.8% of the global sugar consumption.

The industry is highly fragmented with the presence of organised and unorganised players. The unorganised sector usually produces jaggery (unrefined concentrated sugar) or khandsari accounting for smaller shares of overall use. The production and consumption of khandsari has been declining, while it is a reverse situation in case of jaggery. Its production and consumption are unregulated and tend to rise in years, when higher jaggery prices or increase in payment arrears by sugar mills incentivise farmers to divert sugarcane for jaggery production. During 2009-10, jaggerys market share rose to about 35% of the total demand of

the sweetener, reflecting a drop in sugar production caused by reduced sugarcane plantings. India ranks
sixth in per capita sugar consumption. Indias sugar consumption currently hovers around 20 kg/capita compared to 57.6 kg of Brazil. The lower per capita consumption leads to anticipation of increasing demand in the future, though in the last few years, the per capita consumption is increasing at a steady 3.7% annually.

Recovery rate

A higher recovery rate (percentage of sugar produced from sugarcane crushed) ensures higher production.

Frequent switching of crops and climatic conditions affect the recovery rate considerably. In India, the
recovery varies from the plantation in the subtropical region and tropical region. Indias current recovery rate stands at around 10%, compared to Brazils recovery rate of 3.7% annually

Pricing
Until the last sugar season (SS), there were two types of pricing that were followed by the sugar mills to

remunerate the farmers State Advised Price (SAP) and Statutory Minimum Price (SMP). The Commission
on Agricultural Cost s and Prices (CACP) decides the SMP, whereas the state governments fix the SAP, which is significantly higher than SMP. The difference in pricing led to regional variation in productivity and profitability. To include reasonable margin for both the sugarcane and sugar producers, the Centre replaced the Statutory Minimum Price (SMP) with Fair and Remunerative Price (FRP) in early 2010, for the minimum price to be paid to sugarcane farmers for the sugar season 2009-10. FRP for 2009-10 sugar season was fixed at Rs. 129.84 per quintal and has been further raised to Rs. 139.12 per quintal for the 2010-11 season. SAP was fixed at Rs. 165 per quintal.

AUDIT COMMITTEE

Overall purpose/objective

The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing
Agreement with the Stock Exchange read with Section 292A of the Companies Act, 1956. The purpose of the Audit Committee is to assist the Board of Directors(the Board) in reviewing the financial information which will be provided to the shareholders and others, reviewing the systems of internal controls established in the Company, appointing, retaining and reviewing the performance of independent accountants internal auditors and overseeing the Companys accounting and financial reporting processes and the audit of the Companys financial statements.

a) Terms of Reference The terms of reference of the Audit Committee are broadly as under:

Overview of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed.

Recommending the appointment and removal of external auditors, fi xation of audit fee and also approval for payment for any other services. Discussion with statutory auditors before the audit commences, of the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

Reviewing the financial statements and draft audit report, including quarterly/half yearly financial information.

Holding periodic discussions and reviewing with the management, the Statutory Auditors and internal
Auditors the annual and quarterly financial reports and statements before submission to the Board, focusing primarily on:

i. any changes in accounting policies and practices;

ii. major accounting entries based on exercise of judgment by management; iii. qualifications and observations in draft audit report; iv. significant adjustments arising out of audit;

v. the going concern assumption;


vi. compliance with accounting standards; vii. compliance with stock exchange and legal requirements concerning financial statements;

viii. any related party transactions as per Accounting Standard 18


ix. Significant findings of the statutory and internal auditors and follow up thereon. Reviewing the Companys financial and risk management policies. Reviewing with the management, statutory and internal auditors, the adequacy of and compliances with internal control systems. Reviewing the adequacy of internal audit function,

including structure of the internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Reviewing the functioning of the Whistle Blower mechanism.

Objectives: i) Though the constitution of the Remuneration Committee is not mandatory, the Company has constituted the Remuneration Committee review and determine the Companys policy on managerial remuneration and recommends to the Board on the specific remuneration of Executive Directors, so as to ensure that they are

fairly rewarded for their individual contributions to the Companys overall performance and their
remuneration is in line with the industry practice and standards. The Committee has all the powers and authority as may be necessary for implementation, administration and superintendence of various fringe benefits for managerial remuneration. Terms of Reference:

The broad terms of reference of the Remuneration Committee are as under: a. To recommend to the Board salary, perquisites and incentive payable to the Companys executive

b. To recommend to the Board any new appointments

including re-appointments and tenure of office,

whether of executive or non-executive Directors Such other matters as the Board may from time to time request the Remuneration Committee to examine and recommend/approve.

Composition and Meetings

The Committee, presently, comprises of three Independent Non-executive Directors, viz. Mr. S V Muzumdar (Chairman), Mr. Ashvin C Dalal and Mr. Rohit K Dhoot. One meeting of the Committee was held during the year.

Remuneration Policy:

The Company, while deciding the remuneration package of the senior management, takes into consideration
the following items: a. Job profile and special skill requirements. b. Prevailing compensation structure in companies of similar size and in the industry.

c. Remuneration package of comparable managerial talent in other industries. The NonExecutive Directors are paid remuneration by way of commission besides sitting fees, if

approved by the Board, on the net profit of the Company at the rate not exceeding 1% of
the net profit of the Company determined in accordance with the terms and provisions of Section 349 of the Companies Act, 1956. The distribution of such commission

amongst the non-executive directors is placed before the Board for its decision subject to
a maximum of Rs. 1 lac per Director per year. During the last 4 years the Company has not been able to pay any commission to the Non- Executive Directors in view of inadequacy of the net profit of the Company.

MEANS OF COMMUNICATION

i) Since the financial results in respect of each quarter and annual audited financial results of the Company are

sent to the Stock Exchanges immediately after they are approved by the Board/Committee and posted on
the Companys Website and also published in Business Standard, in English in Lucknow and Mumbai editions and Business Standard, in Hindi in Lucknow edition, the same were not separately sent to the shareholders. ii) The financial results are simultaneously posted on the Companys website at www.birla-sugar.com/osugar. Distribution of shareholdings is also displayed on the website. iii) The Company also displays official press releases every quarter on the above website. iv) No presentation was made to any Analysts during the year

GENERAL SHAREHOLDERS INFORMATION

i) 78th Annual General Meeting

Day : Tuesday
Date : 21st December, 2010 Time : 11.00 AM Venue : Registered Office: Sugar Mills Complex, Hargaon, District Sitapur Uttar Pradesh-261121

ii) Book Closure The Register of Members and Share Transfer Books of the Company shall remain closed from 17th December, 2010 21st December, 2010 (both days inclusive) for the purpose of Annual General Meeting. iii) Dividend Payment Date The Board of Directors do not recommend any dividend for the year under review iv) Registrar & Share Transfer Agent The Company has appointed Link Intime India Pvt. Ltd. as its Registrar & Share Transfer Agent (RTA) for handling work related to share registry in terms of both physical and electronic modes. Accordingly, all correspondence, shares for transfer, demat / remat requests and other communication in relation thereto should be mailed/hand delivered to the said RTA directly at the following address:

Link Intime India Pvt. Ltd.


Unit : The Oudh Sugar Mills Ltd. C-13, Pannalal Silk Mills Compound.

L.B.S Marg, Bhandup (West)


Mumbai - 400 078 Tel : 91 022 2596 3838 Fax : 91 022 2594 6969 e-mail : mumbai@linkintime.co.in v) Share Transfer System After the requests for transfer/transmission of shares in physical form are approved by the Investors Grievance Committee the same are sent to the Registrar & Share Transfer Agent for completing the necessary procedural formalities and despatch to the shareholders. The Board of Directors have authorised the Secretary to approve transfer/transmission of up to 1,000 shares.

Share transfer requests, if found valid and complete in all respects, are normally effected within a
period of 15 days from the date of receipt. A total of 5,589 shares were transferred/ transmitted during the year 2009-10.

11. INTERNAL CONTROL SYSTEM The Internal Control System prevalent in the Company is aimed at proper utilisation and safeguarding of the Companys resources and also at promoting operational efficiency. The system is reviewed periodically by the Audit Committee in consultation with the senior management of the Company, the Statutory Auditors and the external internal auditors. The Internal Audit of the Company is conducted by PARM & SMRN, Chartered Accountants. The findings of the Internal Audit and consequent corrective actions initiated and implemented from time to time by the Executive Management are placed before the Audit

Committee. The Audit Committee reviews such audit findings and the adequacy of Internal Control System.
12. HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATION Continuous learning is the cornerstone of the Companys human resource policy. The Companys human resource policy is structured to meet the aspirations of the employees as well as of the organisation. The Company has adopted a progressive policy of continuous development of its human resources by training and motivating its employees to attain greater efficiency and competence besides striving to retain the talent. The current strength of management staff is 77 and non management staff is 1801. Industrial relations

in all the units were cordial throughout the year under review. 13. RISK MANAGEMENT The Company has in place a Risk Management Policy, which lays down the process for identification and mitigation of risks. This Policy has been approved by the Board of Directors of the Company. The Board of Directors reviews the risk management and mitigation policy from time to time, the last such review having been made on 25th August, 2009 15. CODE OF CONDUCT & ETHICS The Company has also adopted a Code of Conduct and Ethics (Code) for the members of Board of Directors and Senior Management Personnel of the Company to follow. The Code is posted on the website of the Company at www. birla-sugar.com. The essence of the Code is to conduct the business of the

Company in an honest and ethical manner, n compliance with applicable laws and in a way that excludes
considerations of personal advantage. All Directors and Senior Management Personnel have affirmed their compliance with the Code, and a declaration to this effect, signed by the Managing Director, is attached to this report.

16. LEGAL COMPLIANCES The Board reviews periodically compliance reports of all laws applicable to the Company, prepared by the Company as well as steps taken by the Company to rectify instances of non compliances, if any 17. COMPLIANCES WITH CORPORATE GOVERNANCE NORMS The Company has complied with all the mandatory requirements of the Code of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has submitted the compliance report in the prescribed format to the stock exchanges for the quarters ended September 30, 2009, December 30, 2009, March 2010 and June 2010. The Statutory Auditors have certified that the Company has complied with the conditions of corporate governance as stipulated in Clause 49 of the listing agreements with the stock exchanges. The said certificate is annexed to this Report and will be forwarded to the Stock Exchanges and the Registrar of Companies, Uttar Pradesh along with the Annual report. As regards compliance with the non-mandatory requirements, the following have been adopted: 1. Remuneration Committee: As detailed in the earlier paragraphs, the Company has constituted a Remuneration Committee. The

Chairman of the Remuneration Committee is Mr. S.V. Muzumdar. 2. Whistle Blower Mechanism Though a codified Whistle Blower Policy of the Company is not in place every employee of the Company is encouraged to escalate to the level of the Audit Committee any issue of concerns impacting and compromising with the interest of the Company and its stakeholders in any way. The company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of employees from reprisals or victimisation, for whistle blowing in good faith. 3. Other non mandatory requirements have not been adopted by the company

18. SUBSIDIARY COMPANIES: The Company does not have any material non listed Indian Subsidiary Company. The Audit Committee reviews the financial statements and in particular, the investments made by unlisted subsidiary companies. The minutes of the Board meetings as well as statements of all significant transactions of the unlisted subsidiary companies are placed before the Board of Directors of the Company for their review.

19. SHAREHOLDERS RIGHTS: The quarterly financial results are published in leading financial newspapers, uploaded on the Companys website and any major developments are covered in the press releases/intimation to stock exchanges by the Company. The Company therefore has not been sending the half yearly financial results to the shareholders. 20. CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009 The Ministry of Corporate Affairs recently announced a set of voluntary guidelines on Corporate Governance. The Company in line with its stated policy of being committed to the principles and practices of good corporate governance, is in compliance with many of these guidelines, as reported in the earlier paragraphs. As regards the remaining guidelines, the Company is in the process of evaluating the feasibility of implementing the same progressively.

Performance of Companys Equity Shares in comparison to BSE Sensex and BSE 200

Series 1
120 115 110 105 100 95 Series 1

RATIO ANALYSIS
LIQUIDITY RATIOS:-

Current Ratio= Current assets / Current Liabilities.


=39006.93/12716.35=3.0674628 Liquid Ratio=Liquid assets/ Current liabilities =(current assets-stock and prepaid expenses)/current liabilities =39006.93-(31291.51+6163.45)/12716.35 =39006.93-37454.96/12716.35 =1551.97/12716.35=0.12204552 CAPITAL STRUCTURE OR LEVERAGE RATIO:Debt Equity Ratio=Debt(Issued+subscribed)/ Equity =2618.92+2591.79/4000

=5210.71/4000 =1.3026775 Propritery Ratio=Shareholder fund or Propriter fund/Total Assets Shareholder fund =share capital +Reserves and Surplus + Profit and Loss Account. Total Assets=Current Assets + Fixed Assets. P.R = 4000+2618.92+2591.79+(4991.38)/67038+39006.93 =9210.71-4991.38/106045.46 =4219.33/106045.33=0.0397879 Solvency Ratio=Total Outside Liabilities/Total Assets =Current Liabilities + Provisions/Current Assets + Fixed Assets. =12495.04+221.31/ 67038+39006.93 =12716.35/106045.46 =0.1199141

PROFITABILITY RATIO

(a)Based on Sales:Gross Profit Ratio= Gross Profit/Net Sales*100 =1109.63/53572.33*100 =2.0712745 Net Profit Ratio=Net Profit/Net Sales*100 =(11073.48)/53572.33*100 =(20.670148) Earning Ratio=Particular Expense/Net Sales*100 =55013.40/53572.33*100

=102.68995 (b) Based on Capital:Return on capital employed=N.P before interest and tax/Capital Employed*100 =11073.8/102454.90 =10.808151 Return on Assets=N.P before interest and tax/Total Assets*100 =11073.48/106045.46*100 =10.442201 Return on Equity Capital= N.P after tax, interest and pref. dividend/Equity Share Capital*100 =(4991.38)/40008100 =(124.7845) Operating Ratio= Operating Cost/ Net Sales*100 =55013.40/53572.33*100 =102.68995

=102.68995 (b) Based on Capital:Return on capital employed=N.P before interest and tax/Capital Employed*100 =11073.8/102454.90 =10.808151 Return on Assets=N.P before interest and tax/Total Assets*100 =11073.48/106045.46*100 =10.442201 Return on Equity Capital= N.P after tax, interest and pref. dividend/Equity Share Capital*100 =(4991.38)/40008100 =(124.7845) Operating Ratio= Operating Cost/ Net Sales*100 =55013.40/53572.33*100 =102.68995

Você também pode gostar