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20thANNUAL REPORT

2012-2013

NARAINGARH SUGAR MILLS LIMITED

Naraingarh Sugar Mills Ltd. Annual Report 2012-13

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Annual Report 2012-13Naraingarh Sugar Mills Ltd.

BOARD OF DIRECTORS

Mr. Onkar Anand, Director & Vice Chairman

Mrs. Renu Anand, Director

Mrs. Ravinder Kaur Kang, Director

Mr. Mahavir Singh, Independent Director

Mr. Gurkirpal Singh, Independent Director

Mr. Gurdev Bassi, Independent Director

Mrs. Uma Sharma, Independent Director

Mr. Aman Handa, Independent Director

Mr. Jitendra Anand, Executive Director

Mr. Baldev Singh Kang, Managing Director

COMPANY SECRETARY

Mrs.Jaswant Kaur

STATUTORY AUDITORS

M/s VASUDEVA & ASSOCIATES

Chartered Accountants

Chandigarh

COST AUDITORS

M/s Khushwinder Kumar & Co.,

Cost Accountants

Jalandhar

REGISTERED OFFICE & WORKS

Village Banondi, P.O. Shahzadpur.

Tehsil Naraingarh, Distt. Ambala (Haryana)

BANKERS

State Bank of India

REGISTRAR AND SHARE TRANSFER AGENT

M/s Alankit Assignments Limited

205-206, Anarkali Market,

Jhandelwala Extension, New Delhi, 11005

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CONTENTS Page No.

Notice 2-7Directors' Report 8-13Corporate Governance Report 14-22

Management Discussion & 23-31Analysis ReportDeclaration on Code of Conduct. 31CEO/CFO Certification 32Auditors Certificate on 33Corporate GovernanceAuditors' Report 34-39Balance Sheet 40Profit & Loss A/c 41Notes to Balance Sheet 41-49Significant Accounting polices and other Notes 50-59Cash Flow Statement 60-62Proxy Form & Attendance Slip 63

Annual Report 2012-13

NOTICE

ORDINARY BUSINESS

To appoint Auditors and fix their remuneration.

NOTICE is hereby given that the 20th Annual General Meeting of the company be and is hereby thconvened to be held on Monday the 29 July, 2013 at 11.30 a.m. at the registered office of the

company at Village Banondi, PO; Shazadpur, Teh. Naraingarh, Distt. Ambala to transact the

following business(s):

1. To receive, consider and adopt the Balance Sheet as at 31st March, 2013 and the Profit & Loss

Account for the period ended at that date alongwith the Director's and Auditor's report

thereon.

2. To appoint a Director in place of Mr. Onkar Anand who retires by rotation and being eligible

offers himself for reappointment.

3. To appoint a Director in place of Mrs. Renu Anand who retires by rotation and being eligible


4. To appoint a Director in place of Mr. Jitendra Anand who retires by rotation and being eligible


5. To consider and if thought fit to pass with or without modification the following resolution as

an ordinary resolution:

RESOLVED THAT M/s. Vasudeva & Associates, Chartered Accountants, having office at SCO: 32-

35, Ist Floor, Madhya Marg, Sector 8C, Chandigarh, the Statutory Auditors of the company,

retiring at the ensuing Annual General Meeting, be and are hereby appointed as the

Statutory Auditors of the company for the financial year ending on 31st March, 2014.

RESOLVED FURTHER THAT the Board of Directors of the company be and are hereby authorised

to fix the remuneration and all out of pocket expenses in consultation with M/s. Vasudeva &

Associates, Chartered Accountants.

SPECIAL BUSINESS6. To consider and if thought fit to pass with or without modification the following

resolution as an ordinary resolution:

To regularize the appointment of Mr. Aman Handa as Director liable to retire by rotation.

RESOLVED THAT Mr. Aman Handa, who was appointed as Additional Director of the company and whose appointment comes to an end on the ensuing Annual General Meeting of the company and in

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Naraingarh Sugar Mills Ltd.


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respect of whom the company has received a notice under section 257 of the Companies Act, 1956 from one of the shareholders, be and is hereby appointed as Director liable to retire by rotation.

BY ORDER OF THE BOARD FOR NARAINGARH SUGAR MILLS LIMITED

Sd/-Dated: 17/05/2013 (Onkar Anand)Place: Chandigarh Vice Chairman

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 to be the member of the company. The Proxies in order to be effective be deposited at the registered office of the company at least 24 hrs before the time fixed of the meeting.

2. A member or Proxy should fill the enclosed attendance slip and deposit the same at the entrance of the meeting hall.

3. All correspondence regarding change of address, transfer/transmission of shares etc maybe made to the Registrars and Share Transfer agents M/s Alankit Assignments Limited, 205-206, Anarkali Market, Jhandelwala Extension, New Delhi – 110055.

4. The members desirous of obtaining any information concerning the accounts and the operations of the company are requested to send their queries to the company atleast seven days before the date of meeting so as to enable the company to make available the desired information at the meeting.

rd5. Share Transfer Books and Register of Members will remain closed from Tuesday the 23 thJuly, 2013 to Wednesday the 29 July, 2013 (both days inclusive).

6. Members are requested to bring their copies of Annual reports as no additional copies will be provided.

7. The explanatory statement pursuant to section 173(2) of the Companies Act, 1956 in respect of Items No. 6 is annexed hereto.

Item-6

As the shareholders are aware that Mr. Aman Handa was appointed as Additional Director on the Board of the company under Section 260 of the companies Act, 1956 to hold office till the

thconclusion of the Annual General Meeting w.e.f 30 March, 2013 in the capacity of independent director as per provisions of Clause 49 of the Listing Agreement. Mr. Aman Handa has been providing professional advice to the company much before his appointment as independent director and has given a new lease of life. He has been contributing to the growth of the company with his valuable services and has handled all the responsibilities efficiently as and when assigned to him by the Board. Besides, the company has also received notice under section 256 of the Companies Act, 1956 proposing his candidature for the appointment of Independent Director liable to retire by rotation.



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Brief particulars of Mr. Aman Handa are as follows:-

Date of Birth: 01.02.1963

Qualification: B.A.

DIPLOMA IN ELECTRONICS & MANAGEMENT.

Experience: 30 years of post-qualification experience in the following areas:

ØIdentification of new projects and their implementation.

ØStudying and analyzing marketing trends.

ØMonitoring competitors' product and services.

ØPreparing and managing marketing plans and budgets.

ØDirector of M/s Impreglam Electronics Limited

In view of varied experience of Mr. Aman HAnda your Board recommends the regularization of his appointment as Independent Director liable to retire by rotation by way of ordinary resolution which shall be in best interests of the company.

None of the directors is interested in the above resolution

BY ORDER OF THE BOARD FOR NARAINGARH SUGAR MILLS LIMITED

Sd/-Dated: 17/05/2013 (Onkar Anand)Place: Chandigarh Vice Chairman

ØFormulating, directing and coordinating marketing activities and policies to promote products and services, working with advertising and promotion managers.

ØIdentifying, developing and evaluating a company's or organization's marketing strategy, based on knowledge of it's objectives, market characteristics, and cost and markup factors.

ØDirecting the hiring, training, and performance evaluations of marketing and sales staff and overseeing their daily activities.

ØEvaluating the financial aspects of product development, such as budgets, expenditures, research and development appropriations, and return-on-investment and profit-loss projections.

ØDeveloping pricing strategies, balancing firm objectives and customer satisfaction.



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Information pursuant to Corporate Governance of the Listing Agreement (s) regarding the

Directors seeking appointment/re-appointment in the Annual General Meeting

Name of the Director Onkar Anand Renu Anand Jitendra Anand Aman Handa

Date of Birth 12.01.1957 12.11.1961 07.01.1951 01.02.1963

Date of appointment 03.11.2008 03.11.2008 03.11.2008 30.03.2013

Expertise in Specific A) 32 years rich function experience in the

over all management of company's affairs and sufficient knowledge on the following subjects :-

- Man Management- Finance Control- Taxation Matters- Legal Matters- Marketing Research

& Selling Strategies

- Vendor Development

- Liaison with Financial Institutions/ Banks

(B) Promoted Rahul Sales Ltd., in the year 1991. The company specializes in the import of various commodities such as petroleum products, petrochemicals, polymers, heavy/ fine industrial chemicals, agro products.

(C) Director of M/s Naraingarh Sugar Mills Ltd.- a Sugar manufacturing unit with an installed capacity of 3000 TCD along with a cogeneration of 5 MW per day.


(A) Have been associated with Rahul Sales Limited since the inception of the company in 1991 and have been handling finance, accounts and other administrative activities.

(B) Appointed as Director in M/s Naraingarh Sugar Mills Limited w.e.f 3rd November, 2008.

(A) Worked in managerial capacity with the following sugar manufacturing companies:

(a) Gangeshwar Limited, Deoband for 13 years

(b) Mahaluxmi Sugar Mills Limited, Iqbalpur for 1 year

(c) RBN Sugar Mills, Laksar for 2 years

During association with the above companies, was directly involved in cane development, accounts, stores, purchase & stocks besides other administrative activities

(B) Have been associated with Rahul Sales Limited for last 16 years and have been looking after procurement, marketing & logistics of sizeable volumes of various commodities including sugar, molasses & ethanol.

30 years of post-qualification experience in the following areas:

Ø Formulating, directing and coordinating marketing activities and policies to promote products and services, working with advertising and promotion managers.

Ø Identifying, developing and evaluating a company's or organization's marketing strategy, based on knowledge of it's objectives, market characteristics, and cost and markup factors.

Ø Evaluating the financial aspects of product development, such as budgets, expenditures, research and development appropriations, and return-on-investment and profit-loss projections.


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Qualification B.Sc, Diploma In M.com B.A. B.A., Diploma in Material management, Electronics Diploma in Marketing & Management.Management.


(C) Appointed as Executive Director in M/s Naraingarh Sugar Mills Limited w.e.f 3rd November, 2008.

Ø Developing pricing strategies, balancing firm objectives & customer satisfaction.

Ø Director of M/s Impreglam Electronics Limited

Ø Worked with Televista Electronics Ltd as Sales Engineer from 1983 - 1984.

Ø Joined Pratap Rajasthan Copper Foils & Laminates Limited, as Marketing Manager from 1984 - 1995.

Ø From 1995, associated with Impreglam Electronics Limited, a company engaged in the manufacturing of Copper Clad & Unclad Industrial Laminates.

Ø Appointed as independent director of Naraingarh Sugar Mills Limited w.e.f 30/03/2013.


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Directorship of -Rahul Sales --Rahul Sales Limited -Rahul Sales - Impreglam other Companies Limited Limited Electronics

-Naraingarh Distillery -Naraingarh Distillery -Naraingarh LimitedLimited Limited Distillery

- RSL Builders (P) Ltd. - RSL Aviations (P) Ltd Limited- RSL Hotels & Resorts (P) Ltd.

- RSL Aviations (P) LTd - RSL Estates (P) Ltd

- RSL Pharmaceuticals (P) Ltd

- RSL Estates (P) Ltd

- Bhavna Agro Limited

Chairmanships/ Nil Nil Nil NilMembership of committees of other companies

Number of shares held 2010000 233600 Nil Nil

Relationship with other directors Husband of Mrs. Wife of Mr. Onkar Brother of Not related to

Renu Anand Anand Mr. Onkar Anand any director

Brother of Mr. Jitendra Anand



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DIRECTORS’ REPORT

To

The shareholders of

Naraingarh Sugar Mills Limited

Naraingarh

OPERATIONS & FINANCIAL RESULTS

Rs in Lacs

Particulars Current Year Previous year

The comparative figures of Cane crushed and recovery during the current year and last financial

year which is given hereunder:-

Particulars 2012-13 2011-12

Cane Crushed (MT)

Recovery (%) 9.47 9.53

Production(MT) 34469 31424

thYour Directors are pleased to present the 20 Annual report of your company alongwith audited stannual accounts of the company for the period ended 31 March, 2013.

(31.03.2013) (31.03.2012)

Total Income 12060.43 7920.36

Total expenditure 11574.64 7522.23

Profit before Depreciation and Tax 485.79 398.13

Depreciation 170.24 115.09

Profit before tax 315.55 283.04

Taxes 58.83 59.71

Profit after Taxes 256.72 223.33

Earning per share 1.35 1.10

It is informed that during the current financial year the company achieved a Gross turnover of Rs. 12482.79 Lacs which is approximately 55% higher than the previous year figure of Rs 8057.22 Lacs. The company was able to register a net profit after taxes of Rs. 256.72 Lacs compared to Rs. 223.33 lacs during last financial year.

363980 329624


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Future Plans

DIVIDEND

DIRECTORS

Change in Directorship

Your company is an established player in the sugar industry and has been showing consistent profits despite overall dismal performance of the industry in the last few years. The management is taking keen initiatives in bringing the technology and performance of the unit at par with the big players in the industry. As briefed by the management in previous reports that it has proposed to set up a 25MW capacity cogeneration power plant apart from expansion and modernization of existing sugar plant. As a part of the Concurrent modernization and expansion plan of the sugar plant, the company has invested an amount of Rs. 5.27 Cr. from its internal accruals for increasing the installed capacity of the unit to 3000 TCD from the existing 2500 TCD during the financial year under review which shall be further increased to 5500 TCD before the start of sugar season 2014 in a phased manner thus stabilizing operations to 229 TCH from existing 125 TCH. The company is also at the final stages of entering into an implementation agreement (IA) with Haryana Renewable Energy Development Agency (HAREDA) for setting up the Grid Connected Industrial Bio mass/Bagasse Cogeneration Power project. The power project is on implementation stage and is likely to be commissioned before the start of sugar season 2014 in integration with sugar mill expansion/modernization plans of the company.

The company has designed and initiated the installation of modification scheme for achieving steam and power economy. The design philosophy will be able to generate optimum levels of power from high pressure steam, supply steam and power requirements of the sugar complex and auxiliaries and export optimum level of power to HSEB’s substation. The cogeneration project has several advantages in terms of availability of required space, suitability from topographical and geological considerations, availability of rail/road networks, sugar availability, water availability and nearest grid connectivity for operating the project.

The alone integrated project shall not only improve the quality of sugar for meeting the national and international standards while operating at optimum levels, but also reduce the manufacturing costs apart from providing raw material for cogen power plant in the form of Bagasse. Implementation of cogen power plant concurrently with sugar expansion/modernization project along with other by-products right from beginning goes a long way to integrate the operations and improve sustainability and shall mitigate the risk of fluctuation in international market prices to some extent.

In view of the above your Board expects much better performance in the years to come.

Keeping in view the financial constraints of the company, your directors have decided not to recommend any dividend for the year under review.

During the financial year under review, Mr. Shashi Bhushan Mahen and Mr. Vijay Mahen resigned rdfrom the Directorship of the company w.e.f 23 August, 2012 and Mr. Aman Handa was appointed as


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thAdditional Director on 30 March, 2013 in independent capacity under the provisions of Clause 49 of the listing Agreement. As per provisions of Section 260 of the Companies Act, 1956 the appointment of Mr. Aman Handa comes to an end on the ensuing Annual General Meeting. Your Board recommends the regularization of his appointment as Directors to retire by rotation as the company has received notices from one of the shareholders proposing their candidature for

thappointment as independent director in their Annual General Meeting to be held on 29 July, 2013.

As per provisions of Section 256 of the companies Act, 1956 Mr. Onkar Anand, Mrs. Renu Anand and Mr. Jitendra Anand retire by rotation and being eligible offer themselves for re-appointment at the ensuing annual general meeting.

Following is the directors' Responsibility Statement as required under section 217 (2AA) of the companies (Amended) Act, 2000, in respect of the Financial Statements, the directors, confirm that:

That during the preparation of annual accounts, applicable accounting standards and policies have been followed along with proper explanation relating to material departures.

That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the statement of affairs of the company at the end of the financial year ended on 31.03.2013 and of the profit or loss of the company for that period.

ØThat the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of companies Act,1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

That the directors have prepared the annual accounts on a going concern basis.

M/s Vasudeva & Associates, Chartered Accountants of the company retire at the ensuing Annual General Meeting. The said Chartered Accountants have confirmed their eligibility under section 224(1B) of the Companies Act, 1956. Your Board recommends their reappointment by way of ordinary resolution.

The Auditors' report is self explanatory and does not call for any comments as the auditors have not made any adverse remarks/qualifications in the Auditors' Report.

M/s Khushwinder Kumar & Co., Cost Accountants, Jalandhar were appointed as Cost Auditors for

Directors to retire by rotation

DIRECTORS’ RESPONSIBILITY STATEMENT

?

?

?

AUDITORS

AUDITORS’ REPORT AND OBSERVATIONS

COST AUDITORS


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stthe financial year ended 31 March, 2013. Their report shall be submitted to the Department of Company Affairs, Government of India in accordance with the requirements of law.

As per clause 49 of the Listing Agreement report on Corporate Governance alongwith Certificate of auditors in respect thereof and Management Discussion and Analysis Report forms an essential part of this report and are annexed herewith as Annexure-B.

The company has not invited any public deposits under section 58A, 58AA of the Companies Act, 1956 during the financial year under review.

The Directors wish to place on record their appreciation of the earnest efforts and contributions made by employees at all level for the smooth operation of the company.

The Company has not employed any person, the information of which is to be given under section 217 (2A) of the companies act, 1956 read with the companies (Particulars of employees) Rules, 1975.

The particulars as required under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the information relating to conservation of energy and technology absorption and Foreign Exchange earning and Outgo forms an integral part of this report and is annexed as Annexure A.

We take this opportunity to acknowledge our deep senses of gratitude to all Banks, central/state government department and other local authorities for unstinted and continued guidance and support. Our gratitude is also due to the shareholders for the confidence and faith they have reposed in us.

BY ORDER OF THE BOARD

FOR NARAINGARH SUGAR MILLS LTD

sd/-Date: 17/05/2013 ONKAR ANANDPlace: Chandigarh VICE CHAIRMAN

REPORT ON CORPORATE GOVERNANCE

PUBLIC DEPOSITS

HUMAN RELATIONS

PARTICULARS OF EMPLOYEES:

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

ACKNOWLEDGEMENT


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Annexure A

Disclosure of Particulars in respect of conservation of energy and technology

A. Conservation of energy(a)

B. Power and Fuel consumption

The company has installed most modern equipment in the plant in order to minimize energy consumption.

(b) The company does not allow wastage of energy and resources.

(c) Every department has been given different electric connections which are used only at the time of need. In the absence of staff all the electrical appliance are put off.

Sl. Particulars Current year Previous year

No. (2012-13) (2011-12)

01 Electricity

a. Purchased (units in No.s) 277978 174823

b. Amount (in Rs) 1946381 1189152

Rate per unit (Rs.) 7.00 6.80

c. Own Generation

i. Through Diesl Gen Set (units in No.s) 239244 240469

Unit per litre of Diesel oil 2.55 2.47

Diesel rate per unit (Rs.) 15.67 16.18

ii. Through Steam turbine generation unit 10733890.80 11403578

Unit per tonne of fuel rate/unit 222.22 222.22

Rate per unit(Being generated out of

steam required for process) 5.85 5.62

2. Bagasse (quantity in MT) 92768.28 91536.2

Total cost (Rs. In Lacs) 1205.98 1144.20

Average rate (Rs.) 1300.00 1250.00

3. Fire Wood (quantity in MT) — —

Cost (Rs. In Lacs) — —

Rate per MT — —

4 Consumption per unit of product

Electricity (KW/MT) 287.78 261.90

Bagasse (MT/MT) 2.59 2.93


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C. TECHNOLOGY ABSORPTION

1)

D.FOREIGN EXCHANGE EARNING AND OUTGO

The company is regularly carrying on activities of development of sugarcane in the area.

2) Agricultural implements, fertilizers, pesticides and cane seeds are supplied to the cane

growers on loan basis and at subsidized rates.

3) Expenditure incurred on R & D – Nil

4) Total Expenditure as %age of Turnover – Nil

5) Technology absorption, adoption and innovation.

(a) The company has adopted latest technology in the plant to maximize production, yield,

better quality and to minimize consumption of energy.

(b) Technology imported during last five years – Nil

The company has not done any transactions in foreign exchange.


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ANNEXURE-B TO DIRECTORS’ REPORT.

REPORT ON CORPORATE GOVERNANCE

Corporate Governance

1. Company's Philosophy

Corporate Governance is an ever-evolving art to put into practice ethical business conduct that

focuses on four of its key elements – transparency, fairness, disclosures and accountability.

Primarily, the governance system affects the way the company functions and hence impact its

performance. While governments can frame regulations that can direct the course of governance

in a country and the world, but it is for the companies and management to believe in and

implement the legal, economic and social process by which companies are run.

In India, Clause 49 of the listing agreement of the Indian Stock Exchanges mandates adherence of a

code of corporate governance by the listed companies. It encompasses certain mandatory and

non-mandatory clauses in various areas, like, statutory auditor-company relationship, auditor's

independence, working of audit committees, Board composition and governance, certification of

accounts and financial statements by managers and directors, the role of independent directors

etc.

NSML has embedded the best of corporate governance practices in its day to day operations aimed

at building trust with shareholders, employees, customers, suppliers (including farmers) and

diverse stakeholders. The company's policies on Corporate Governance and compliance thereof in strespect of specific areas for the year ended 31 March, 2013 in the format prescribed by Clause 49

of the Listing Agreement with the stock exchanges are set out below for the information of the

shareholders and investors of the company.

In Naraingarh Sugar Mills Limited (NSML), the pursuit towards achieving good Corporate

Governance is an on-going process, thereby ensuring truth, transparency, accountability and

responsibility in all our dealings with customers, dealers, employees, shareholders and with every

individual who comes in contact with the Company.

NSML firmly believes that the practice of trusteeship, transparency, empowerment and

accountability in all dealings with its stakeholders, which leads to the creation of the right

corporate culture which fulfils the purpose of Corporate Governance. This helps the company to

perform better thus culminating into higher productivity of the corporate resources. The ethical

values have been sufficiently integrated with business acumen as part of Corporate Governance

framework implemented by the company. The philosophy, principles and practice of corporate

governance in NSML can be concisely stated as:


15

?

2. Board of Directors

Observance with true spirit of law rather than just with the letter of law.

ØTransparency in all business dealings and transactions.

ØMaintaining a high degree of disclosure levels in timely and accurate manner.

ØCorrect and factual internal and external communication.

ØEquality in treating all shareholders – the organization is always keenly conscious of the

management's role as a trustee of shareholder's capital.

ØClear distinction between personal conveniences and corporate resources.

ØCompliance with all the applicable law.

ØStrategic guidance and effective monitoring by the Board of Directors.

ØThe accountability of the Board of Directors to the company and shareholders.

In compliance with the Corporate Governance norms the present strength of the Board is Ten

headed by Mr. Onkar Anand, Vice Chairman, Mr. Baldev Singh Kang as Managing Director and

Mr. Jitendra Anand as Executive Director. The new management has rich experience in handling

corporate matters. Except Mr. Onkar Anand, Mr. Baldev Singh Kang, and Mr. Jitendra Anand, all

other Directors are Non-executive Directors. Further, Mr. Mahavir Singh, Mr. Gurdev Bassi, Mrs. Uma

Sharma, Mr. Gurkirpal Singh Bedi and Mr. Aman Handa are amongst the independent Directors.

None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more

than 5 Committees across all the companies in which he is a Director. Necessary disclosure

regarding Committee positions in other companies as on March 31, 2013 have been made by the

Directors.

During the period under review 8 Board meetings were held on 28.04.2012, 25.07.2012,

23.08.2012, 31.10.2012, 09.01.2013, 31.01.2013, 20.02.2013 and 30.03.2013. The maximum time

gap between two board meetings is much less compared to the mandated requirement of not more

than 4 months in Clause 49 of the Listing Agreement.

Composition of Board of Directors, detail of number of directorships held in other public limited

companies and committee positions held by Directors is summarized in the table below:


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Name of the Director Category of Board previous Directorship (as Chairman / Member) Director Meetings AGM held in the public held in other public

ndAttended on22 Companies Companiesheld August,during 2012financial year ended

st31 March 2013 Chairman Member

Shashi Bhushan Mahen# C 02 Present 02 Nil 01

Baldev Singh Kang MD 05 Present 01 Nil Nil

Onkar Anand VC 07 Present 03 01 01

Jitendra Anand ED 08 Present 02 Nil 01

Renu Anand NED 07 Not Present 03 Nil 01

Mahavir Singh INED 0 Not present 04 01 04

Ravinder Kaur Kang NED 05 Not present Nil Nil Nil

Vijay Mahen# NED 02 Present Nil Nil Nil

Mrs. Uma Sharma NED 08 Not Present 01 Nil Nil

Mr. Gurdev Bassi INED 04 Not Present 01 Nil Nil

Mr. Gurkirpal Singh Bedi INED 06 Not present Nil Nil Nil

Mr. Aman Handa* INED 01 Not Present 01 Nil Nil

rd# Mr. Shashi Bhushan Mahen re signed from the directorship of the company w.e.f. 23 August,

2012.th* Mr. Aman Handa was appointed as independent directors w.e.f 30 March, 2013.

The Board of NSML has complete access to any information within the company and to any

employee of the company. At the meetings, the Board is provided with all the relevant information

on important matters affecting the working of the company as well as all related details that

require deliberation by the members of the Board.

stAs on 31 March, 2013, Audit Committee comprised of four members of which three were

Independent Directors with the following composition:-

No. of Attendance No. of No. of Committee positions

and Mr. Vijay Mahen

Information supplied to the Board

3. Committees of the Board

The Board has set up the following committees

(a) Audit Committee

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1. Mr. Mahavir Singh, Chairman

2. Mr. Gurkirpal Singh Bedi, Member

3. Mr. Gurdev Bassi, Member

4. Mr. , Member

Terms of Reference of Audit Committee

Sl. No. Name of the Member Category Meeting held Meeting participated

1. Mr. Mahavir Singh Member 04 01

2. Mr. Shashi Bhushan Mehan* Member 02 02

3. Mr. Gurdev Bassi Member 04 03

4. Mr. Gurkirpal Singh Bedi Member 04 04

5. Mr. Onkar Anand Member 02 02

Terms of reference:

The terms of reference of the committee include:

1) To review the financial statements and pre-publication announcements before

submission to the Board.

2) To ensure the compliance of internal control systems and action taken on internal audit

reports.

3) To apprise the Board on the impact of accounting policies, accounting standards and

legislation.

4) To hold periodical discussions with statutory auditors on the scope and content of the audit.

5) To review the company's financial and risk management policies.

Onkar Anand

The terms of reference of Audit Committee are as per relevant guidelines and legislations.

The primary objective of the Audit Committee is to monitor and provide effective supervision

of the management's financial reporting process with a view to ensure accurate, timely and

proper disclosures and transparency, integrity and quality of financial reporting, reviewing with

the management, external and internal auditors, the adequacy of internal control systems

and review the adequacy of internal audit functions.

During the year under review four meetings of the Committee were held on 28.04.2012, 25.07.2012,

31.10.2012 and 31.01.2013.

rd* Mr. Shashi Bhushan Mahen resigned from the directorship of the company w.e.f. 23 August, 2012.


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(b) Directors’ Remuneration Committee:

1.

(c) Share Transfer Committee

The composition of Share transfer Committee is as follows:

1.

(d) Investor Protection Committee

The composition of Investors’ Protection committee is as follows:

1.

There had been no complaints from investors during the financial year under review.

The Board is responsible for constituting, assigning, co-opting and fixing terms of service for

committee members of various committees. The chairman, in consultation with the Company

Secretary and the committee chairman determines the frequency and duration of the committee

meetings. Recommendations of the committees are submitted to the Board for its approval.

The Board constituted Remuneration Committee to recommend the remuneration payable to

Executive Directors. The Company has not paid any remuneration to its non-executive

directors during the financial year 2012-13. The Company does not have any Stock Option

Scheme. The constitution of Remuneration committee was as follows:

Mr. Mahavir Singh, Chairman


3. Mr. Baldev Singh Kang, Member

4. Mr. Onkar Anand, Member

5. Mr. Gurdev Bassi, Member


2. Mrs. Uma Sharma, Member


4. Mr. Baldev Singh Kang, Member

5. Mr. Onkar Anand, member

During the year under review Thirteen meetings of the Committee were held on 2/4/2012,

18/04/2012, 2/8/2012, 3/9/2012, 17/09/2012, 15/10/2012, 4/11/2012, 3/12/2012, 18/12/2012,

09/01/2013, 31/01/2013, 09/02/2013 and 30/03/2013.



3. Mr. Gudev Bassi, Member

4. Mr. Baldev Singh Kang, member

5. Mr. Onkar Anand, member


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Quorum for meetings of all committee meetings is two members or one third of the members,

which is higher.

4. General meetings

Sl. Year Ended Date of Time Venue

No. Annual

General

Meeting

Ensuing Annual General meeting

5. Postal Ballot

6. Disclosures

7. Management Discussion and Analysis Report

8. Code of Conduct

Location and Time of Last Three Annual General Meetings of the company is as follows:

01 31.03.2010 27.08.2010 11.30 a.m. Vill. Banondi, Teh. Naraingarh, Distt. Ambala

02 31.03.2011 26.09.2011 11.30a.m. Vill. Banondi, Teh. Naraingarh, Distt. Ambala

03 31.03.2012 22.08.2012 11.30a.m. Vill. Banondi, Teh. Naraingarh, Distt. Ambala

thThe ensuing Annual General Meeting is being convened on Monday 29 July, 2013 at 11.30 a.m at

the registered office of the company at Vill. Banondi, Teh. Naraingarh, Distt. Ambala.

During the financial year 2012-2013 no special resolution was passed through postal ballot.

During the financial year 2012-13, the Company had no materially significant related-party

transactions, which are considered to have potential conflict with the interests of the Company at

large.

There has not been any instance of non-compliance, penalties or strictures imposed by the Stock

Exchanges, and/or SEBI on any matter relating to the capital markets, in the preceding three

years.

The Management Discussion and Analysis Report is being annexed herewith as Annexure B1.

The Company has adopted a Code of Conduct for its Directors and Senior Management. The

Chairman has given a declaration that all Directors and Senior Management of the Company have

affirmed the compliance with the Code of Conduct which is annexed as Annexure-B2


20

9. CEO/CFO Certification

10. Means of Communication

.

11. General Shareholder Information

As required under Clause 49 of the Listing Agreement a Certificate signed by Mr. Baldev Singh Kang,

Managing Director and Mr. Ashwani Mittal, GM ( Accounts & Finance ) is annexed as Annexure B3.

The Quarterly results are published in Hindi Language Newspaper Ambala Bhaskar and English

Daily, The Financial Express and are also sent to Stock exchanges. Besides, the annual reports are

separately sent to all the shareholders

1. Annual General Meeting 29.07.2013 at 11.30 a.m. at Village Banondi,

Teh. Naraingarh, Distt. Ambala

2. Financial year April 2012 to March, 2013

3. Proposed Dates for Approval of quarterly Qtr ended 30.06.2013: Last week of July, 13

results for next 12 months Qtr ended 30.09.2013: Last week of Oct., 13

Qtr ended 31.12.2013: Last week of Jan., 14

Qtr ended 31.03.2014: Last week of April/May, 14.

4 Book Closure Tuesday the 23rd July, 2013 to Wednesday the 29th

July, 2013 (both days inclusive)

5. Dividend Payment Date Not Applicable(as no dividend has been

recommended)

6. Listing on Stock Exchanges The Delhi Stock Exchange Assn Ltd, Delhi

The Bombay Stock Exchange Ltd, Mumbai

The Calcutta Stock Exchange Ltd, Kolkata

The Ludhiana Stock Exchange Ltd. Ludhiana

The Ahmendabad Stock Exchange Ltd, Ahmendabad

7. Scrip Code BSE: 531457

8. Market price Data Since the company’s trading is suspended the market

price data is not available. However, efforts are being

made by the management for revocation of

suspension of trading of company’s shares and the

company’s share shall be available for trading as soon

as suspension is revoked by BSE.


12. Registrar and Share Transfer Agent

13. Share Transfer System

14. Distribution of Shareholding as on 31st March, 2013

No. of Equity Shares No. of

Shareholders holders held holding

Up to 5000 2351 95.14 3213210 15.82

5001 to 10000 52 2.10 484900 2.39

10001 to 20000 21 0.85 351500 1.73

20001 to 30000 9 0.36 221700 1.09

30001 to 40000 3 0.12 111900 0.55

40001 to 50000 2 0.08 100000 0.49

50001 to 100000 10 0.41 759030 3.74

100001 to Above 23 0.94 15069960 74.19

TOTAL 2471 100.00 20312200 100.00

15.Shareholding Pattern as on 31.03.2013

Sl. No. Category No. of Shares Held % of Shareholding

01 Promoters 7162860 35.26

02 Institutions (others): Mutual Fund/UTI 0 0

03 Bodies Corporate 2771700 13.65

04 Individuals 10377640 51.09

TOTAL 20312200 100.00

The company has appointed M/s Alankit Assignments Limited as its share transfer agent. All

correspondence regarding change of address, transfer/transmission of shares etc maybe made to

the Registrars and Share Transfer agents M/s Alankit Assignments Limited, 205-206, Anarkali

Market, Jhandelwala Extension, New Delhi – 110055.

All requests for share transfers/transmission received from shareholders are processed by the RTA

which is thereafter approved by the Share Transfer committee.

% of share No. of Shares % of Share


21


22

16. Dematerialisation of shares

The company has entered into an arrangement for dematerialization of shares with NSDL and CDSL.

Some shares, however, are still in physical form.

17. Plant location

The company is having one sugar manufacturing unit which is located at Village Banondi, PO:

Shazadpur, Teh. Naraingarh, Distt. Ambala (Hr.)

18. Address for Correspondence

The shareholders and other stakeholders may send their queries/grievances at the following

address:-

The Company Secretary

M/s Naraingarh Sugar Mills Limited

Village Banondi,

PO: Shazadpur,

Teh. Naraingarh,

Distt. Ambala (Hr.)

Email id: [email protected]



sd/-

Date: 17/05/2013 ONKAR ANAND

Place: Chandigarh VICE CHAIRMAN


23

ANNEXURE-B1 TO CORPORATE GOVERNANCE

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Introduction

Sugar Industry is the second largest agro-based industry next to textiles in India. Sugarcane is the

key raw material for production of sugar. Around 70 % Sugar is produced from Sugar Cane & 30% is

produced from Sugar Beet.

Your company is engaged in production of sugar from sugarcane and its only manufacturing unit is

located at Vill. Banondi, Teh. Naraingarh. The plant was originally set up with an installed capacity

of 2500 TCD (tons crushing per day) with a co-generation of power of 5 MW.

Industry Structure and Developments

The Sugar industry has always been a cause of concern since its inception. The Indian sugar industry

ranks second among the agro based processing industries in India. Being an essential commodity,

sugar prices are closely monitored by the government and controlled by a set of measures like

export restriction, import enhancement and fiscal concession. The raw material for production of

sugar i.e. sugarcane is a seasonal crop and hence the success or failure of a sugar factory mainly

depends on production of sugarcane.

The two foremost challenges for our industry are the rigid regulations constraining us and the

cyclicality in production. Both these problems are inter-linked. The lack of freedom to make

decisions on sound commercial basis is amplifying the financial distress in the industry. This leads to

ever sharper swings in sugar production from year to year. If one looks at the reasons for cyclicality

in sugarcane and sugar production, bad weather is one reason but the predominant cause is the

delay in payment of adequate cane price to the farmers, leading to reduction in area under

sugarcane and lack of proper care of the crop by the farmers causing lower yields and lower sugar

recoveries.

Not only does this cyclicality in sugarcane and sugar production puts a huge burden on the sugar

industry, but also causes harm to the sugarcane farmers as well as consumers. The farmers do not

get adequate payment for their cane on time during surplus years and consumers have to pay a high

price on sugar during low production years when they are exposed to high import prices of sugar.

Further, some major sugar producing states declare State Advised Prices with no reference to

economics of the industry. These constraints have collectively made the industry weak and poorly-

capitalised. We are also seen by the investors and banks as lacking the ability to have significant

impact on our well being and future prospects and more subject to rigid controls.



24

In a free environment, companies would be more competitive and efficient and shall have better

access to capital, invest more in agricultural and technical development and better serve its

farmers and customers.

Sugar Production

Indian sugar production for marketing year (MY) 2013/14 (October-September) is forecast to

decline by 8 percent to 25.3 million metric tons (raw value basis) on lower cane production and

higher diversion for alternative sweetener. India is set to become a net sugar importer in MY

2013/14 on relatively strong domestic prices. The government’s reform of marketing controls on

the sugar industry will give millers greater flexibility in managing sales and cash flows, which in will

ensure timely payment to cane farmers.

Assuming a normal monsoon and favorable weather, MY 2013/14 sugarcane planting is forecast at

5.35 million hectares, marginally higher than last year. In April 2013, the Government of India (GOI)

abolished the sugar levy on mills and deregulated sale of sugar in the open market. The policy

change (discussed in detail in the policy section) will help mills increase revenues and ensure

timely payment to cane farmers, which should encourage higher planting in MY 2013/14.

Despite higher plantings, total sugarcane production is likely to decline slightly in MY 2013/14 to

355 million tons. Cane yields in Maharashtra, India’s leading sugar producing state, are unlikely to

recover from last year’s drought. An expected larger proportion of retune crop will reduce

Maharashtra’s sugarcane yields, and as a result, Indian average cane yields will shrink over last

year.

India’s total centrifugal sugar production for MY 2013/14 is forecast at 25.3 million tons (includes

497,000 tons of khandsari - a low recovery sugar prepared by an open-pan evaporation method).

The forecast 8 percent decline in production over last year is mostly due to a larger diversion of

cane for gur production as gur prices are expected to remain relatively strong compared to sugar

prices in MY 2013/14. Gur (crude non-centrifugal lump sugar) production is forecast higher at 7.24

million tons compared to 5.8 million tons in MY 2012/13.

With the rising cost of labor and irrigation for sugarcane cultivation, some state governments are

assisting sugarcane farmers in procuring sugarcane harvesters. Industry observers believe that

mechanical cane harvesting will reduce the cost of sugarcane production, ensure timely and

reliable supplies of fresh cane to sugar mills, ensure timely harvesting for maximum yield and sugar

recovery, overcome labor problems, and improve soil structure. In general, rising sugarcane

cultivation costs, coupled with better remuneration from competing crops such as paddy, wheat

and corn, should keep cane prices firm during the forthcoming season.



25

Consumption:

Indian sugar consumption is set to rise in MY 2013-14 to 26 million tons on improved domestic

supplies and strong demand from bulk consumers. A growing population (about 1.8% p.a.) coupled

with forecast Indian economic growth of 6 to 6.7 per cent in fiscal year 2013-14 are likely to support

higher sugar consumption. Bulk consumers, which include soft drink manufacturers, bakeries,

hotels and restaurants account for nearly 65 per cent of the total consumption. Most Khandsari

sugar is consumed by local sweet meat shops. Gur is mostly consumed in rural areas for household

consumption and feed use.

Market Prices

After reaching a peak in January 2010, domestic sugar prices softened on the expectation of

increased domestic production in 2010-11 and 2011-12. Following the GOI's decision to allow sugar

exports in 2011-12, domestic sugar prices rose strongly in November 2011, but was moderated as

fresh sugar supplies pulled down prices. Current sugar prices in India’s domestic wholesale market

range from $530 to $585 per ton. Sugar prices in the upcoming 2013-14 season are expected to

remain range-bound on prospects of improved domestic supplies, although international price

movements can influence domestic prices. International price movements can influence domestic

prices as well.

Trade:

India is likely to be a net sugar importer in MY 2013-14 due to lower sugar production forecasts.

Imports are forecast at 1.5 million tons while minimal exports are forecast at slightly more than

half a million tons. During the first trimester of MY 2012-13 India imported approximately 890 tons

of raw sugar due to lower international prices. Exports were limited to 340 tons. Commercial

exports are likely to be minimal except for sugar re-exported under Advance License Scheme (ALS).

Trade Policy

The Central Government w.e.f May 11, 2012 allowed sugar exports without restrictions under OGL

subject to prior registration with the Directorate General of Foreign Trade. Sugar Mills, exporters

and importers are free to export and import sugar as per their commercial prudence. Sugar can be

imported from any country under OGL including raw sugar subject to payment of the prescribed

import duty of 10% (effective July 13, 2012).

Stocks:

Total closing stock for MY 2013-14 are forecast at 10.8 million tons, which is slightly higher than MY



26

2012-13 ending stocks. This is on par with normal stock levels, which is defined as India's three-

month consumption requirement.

Policy:

Sugarcane Production and Pricing Policy

The Government of India (GOI) supports research, development, training of farmers and transfer of

new varieties and improved production technologies (seed, implements, pest management) to

growers in its endeavor to raise cane yields and sugar recovery rates. The Indian Council of

Agricultural Research (ICAR) conducts sugarcane research and development at the national level.

State agricultural universities, regional research institutions, and state agricultural extension

agencies support these efforts at the regional and state levels. The central and state governments

also support sugarcane growers by ensuring finances and input supplies at affordable prices. To

increase the area of cultivation and production in India, a centrally sponsored scheme called the

Sustainable Development Fund of Sugarcane Based Cropping System Area under the Macro

Management Mode of Agriculture is being implemented in various sugarcane growing states.

The GOI establishes a minimum support price (MSP) for sugarcane on the basis of recommendations

by the Commission for Agricultural Costs and Prices (CACP) and after consulting state governments

and associations of the sugar industry and cane growers. In 2009, the GOI announced a new fair and

remunerative price system (FRP) that links cane prices with sugar price realization by sugar mills.

Several state governments further augment the MSP/FRP, typically by 30-40 percent, due to

political compulsions rather than market pricing.

Sugar mills are required to pay the “state advised price (SAP)” to sugarcane farmers irrespective of

the market price of sugar. Softening sugar prices, coupled with apprehensions of a large cane crop,

discouraged the sugar mills to pay higher cane prices vis-à-vis 2010-11. However, cane prices

received by farmers were higher than the MSP/FRP in most of the growing states. Although the local

industry has been advocating rationalization of cane pricing policy by linking it with

domestic/world sugar prices, industry sources do not expect any downward revision of the FRP in

the coming years given the political clout of the farmers lobby.

Sugar Marketing Policy: Government Approves Partial Market Decontrol

On April 4, 2013, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan

Singh, abolished the sugar levy on mills and deregulated the sale of sugar in the open market.

Under the sugar levy, mills were obligated to sell 10 percent of their sugar production at below-

market prices to the GOI. The GOI distributed this sugar at subsidized rates to poor consumers

through the public distribution system (PDS). Under the new system, the GOI will continue to



27

supply subsidized sugar for the poor by procuring sugar from the open market through open

tenders. The difference between the open market price and PDS sale price will be borne by the

GOI. The sugar industry will continue to be subject to production controls by state governments,

including sugar industry licensing, specified cane procurement areas for sugar mills, and cane

pricing. Decontrol of sugar marketing will be reviewed in two years after assessing its effect on

farmers and market prices.

.An official notification on sugar levy reform is expected to be out soon. On March 26, 2013, prior to

the partial decontrol of the sugar industry, the GOI decided to release 10.4 million tons of sugar as

non-levy quota for open market sale between April and September, 2013. The sale and delivery

period for the above quota is specified without inter-month restrictions. The non-levy quota will be

apportioned and released only among those sugar mills which have submitted online production

returns at the time of release. Mill-wise quota apportionment will discount the entire non-levy

quota released for the period of October, 2012 through March, 2013. Any quantity left unsold will

not be available for sale during the period of April, 2013 to September, 2013. There will be no

conversion of unsold non-levy quota into levy quota during the period of current release, i.e. April

to September, 2013)

RISKS AND CONCERNS

The Agro based sugar industry has a specific set of risk characteristics, which at NSML, are carefully

evaluated, managed and mitigated. The major risks are classified as under:-

Raw material risk

Sugarcane is the raw material and any disturbance on its timely availability will have a substantial

impact on operational cost. This risk may be caused by climatic conditions influenced by the

monsoon and local weather conditions over the crop cycle, which also affects both the quantity and

quality of cane. The profitability of alternative crops will influence the area of planting under

cane. Pests and disease and non-availability of farm labour also impact the cost incurred by the

cane grower.

Sugar Price Risk

The market price for sugar is function of demand and supply. Even a slight fluctuation in demand or

supply of sugar may move sugar price up or down, thereby directly impacting the sugar industry.

Wholesale price of sugar has significant impact on our profits. Higher the price higher the profit is.

Like other agricultural commodities, sugar is subject to price fluctuations resulting from weather,

natural disasters, domestic and foreign trade policies, movements in demand and supply and other

factors beyond the control of management. Besides, around 15-30% of sugar in the world is traded



28

on stock exchanges and hence is subject to speculation. As a result, any prolonged decrease in

sugar price may have an adverse effect on financial results of the company.

Regulatory risks

Sugar industry and hence our company is subject to several legal and regulatory measures imposed

by both Central and State Government. This includes both environmental and other legal strictures

which directly or indirectly impacts the performance of the company. The company may be

exposed to liability resulting from handling of hazardous substances and increased costs for

ensuring compliance of various laws.

Risk mitigation

The company has always maintained an amicable relationship with its farmers and taken up

initiatives to mitigate hardships by timely payment, cane development schemes through Bank

loans, promotion of right cane variety, maintaining goodwill among farmers. The Company adopts

appropriate procedures as per the policy and guidelines through internal control systems to

minimize the risk. The company maintains strong relationship with the customers for stabilizing

the domestic and international market through efficient production and best product delivery. As

explained earlier sugar cane price is also governed by both Central and State Government, the

company is always at a risk of a higher cane price and increased cost of production. These risks

cannot be mitigated unless the industry is completely decontrolled.

Competition Risk

The prospect for high growth in the industry encourages the company to face tough competition

from other companies in the industry and also from the new entrants.

Internal Control Systems and their adequacy

The Company has established a system of internal control across all of its business operations and

safeguarding of the Assets. The Board, Audit Committee and the Management ensure that the

internal control system operates effectively within the organization. Internal Audit team

supported by external experts as and when required, review the adequacy of internal control

systems and suggests necessary checks and balances to increase the effectiveness of the system.

Clear policies have been laid down for approval and control of expenditure. Investment decisions

involving capital expenditure are subject to detailed appraisal and review. Capital and revenue

expenditure are monitored and controlled with reference to approved budgets.



29

Financial performance of the company

OPERATIONS & FINANCIAL RESULTS

Rs in Lacs

Particulars Current Year Previous year

The comparative figures of Cane crushed and recovery during the current year and last financial

year which is given hereunder:-

Particulars 2012-13 2011-12

Cane Crushed (MT)

Recovery (%) 9.47 9.53

Production(MT) 34469 31424

Future Plans

(31.03.2013) (31.03.2012)

Total Income 12060.43 7920.36

Total expenditure 11574.64 7522.23

Profit before Depreciation and Tax 485.79 398.13

Depreciation 170.24 115.09

Profit before tax 315.55 283.04

Taxes 58.83 59.71

Profit after Taxes 256.72 223.33

Earning per share 1.35 1.10

It is informed that during the current financial year the company achieved a Gross turnover of Rs. 12482.79 Lacs which is approximately 55% higher than the previous year figure of Rs 8057.22 Lacs. The company was able to register a net profit after taxes of Rs. 256.72 Lacs compared to Rs. 223.33 lacs during last financial year.

363980 329624

Your company is an established player in the sugar industry and has been showing consistent profits despite overall dismal performance of the industry in the last few years. The management is taking keen initiatives in bringing the technology and performance of the unit at par with the big players in the industry. As briefed by the management in previous reports that it has proposed to set up a 25MW capacity cogeneration power plant apart from expansion and modernization of existing sugar plant. As a part of the Concurrent modernization and expansion plan of the sugar plant, the


company has invested an amount of Rs. 5.27 Cr. from its internal accruals for increasing the installed capacity of the unit to 3000 TCD from the existing 2500 TCD during the financial year under review which shall be further increased to 5500 TCD before the start of sugar season 2014 in a phased manner thus stabilizing operations to 229 TCH from existing 125 TCH. The company is also at the final stages of entering into an implementation agreement (IA) with Haryana Renewable Energy Development Agency (HAREDA) for setting up the Grid Connected Industrial Bio mass/Bagasse Cogeneration Power project. The power project is on implementation stage and is likely to be commissioned before the start of sugar season 2014 in integration with sugar mill expansion/modernization plans of the company.

The company has designed and initiated the installation of modification scheme for achieving steam and power economy. The design philosophy will be able to generate optimum levels of power from high pressure steam, supply steam and power requirements of the sugar complex and auxiliaries and export optimum level of power to HSEB’s substation. The cogeneration project has several advantages in terms of availability of required space, suitability from topographical and geological considerations, availability of rail/road networks, sugar availability, water availability and nearest grid connectivity for operating the project.

The alone integrated project shall not only improve the quality of sugar for meeting the national and international standards while operating at optimum levels, but also reduce the manufacturing costs apart from providing raw material for cogen power plant in the form of Bagasse. Implementation of cogen power plant concurrently with sugar expansion/modernization project along with other by-products right from beginning goes a long way to integrate the operations and improve sustainability and shall mitigate the risk of fluctuation in international market prices to some extent.

In view of the above your Board expects much better performance in the years to come.

Human Resources / Industrial Relations

Employee relation is one of the key success factors which are continued throughout the year. Lot of

development initiatives in all facets is implemented and practiced including six sigma concepts in

order to be competitive in the industry. The organization provides a learning atmosphere across

levels and aims at improving the standards through innovation. The industrial relations maintained

with the employees are satisfactory.

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis describing the Company's objectives,

projections, estimates, expectations or predictions may be "forward-looking statements" within

the meaning of applicable securities laws and regulations. Actual results could differ materially

from these expressed or implied. The Company assumes no responsibility in respect of these

forward looking statements that may be amended or modified later, on the basis of subsequent


30



31

developments, information or events and in view of the changes brought by the Government Rules

and Regulations.



Sd/-



Annexure B2 to Corporate

Governance Report

DECLARATION

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, this is to confirm

that all the members of the Board and the Senior Management have affirmed compliance with the

Code of Conduct for the year ended March 31, 2013.

Sd/-





32

Annexure B3 to Corporate Governance Report

CERTIFICATE UNDER SUB CLAUSE V OF CLAUSE 49 OF LISTING AGREEMENT

We, Baldev Singh Kang, Managing Director and Ashwani Mittal, GM ( Accounts & Finance ) of the

company hereby confirm and certify that:-

1. These statements do not contain any materially untrue statements or omit any material fact

or contain statements that might be misleading;

2. These statements together present a true and fair view of the Company's affairs and are in

compliance with existing accounting standards, applicable laws and regulations.

3. There are, to the best of our knowledge and belief, no transactions entered into by the

Company during the year ended 31st March, 2013 which, are fraudulent, illegal or violative of

the Company's Code of Conduct.

4. We accept responsibility for establishing and maintaining internal controls for financial

reporting. We have evaluated the effectiveness of the internal control systems of the

Company pertaining to financial reporting and we have disclosed to the auditors and the

Audit Committee those deficiencies in the design or operation of such internal controls of

which, we are aware and the steps we have taken or propose to take to rectify these

deficiencies.

5. We have indicated to the Auditors and the Audit Committee:

(a) there have been no significant changes in internal control over financial reporting

during this year.

(b) there have been no significant changes in accounting policies during this year.

(c) there have been no instances of significant fraud of which we have become aware and

the involvement therein, of management or an employee having significant role in the

company’s internal control systems over financial reporting.

Sd/- Sd/-

Date: 17.05.2013 Baldev Singh Kang Ashwani Mittal

Place: Chandigarh Managing Director GM (A&F)



Auditors’ certificate on Corporate Governance

The Members

Naraingarh Sugar Mills Limited

We have examined the compliance of the conditions of Corporate Governance by Naraingarh Sugar

Mills Limited for the year ended 31st March, 2013, as stipulated in Clause 49 of the Listing

Agreement of the said company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management.

Our examination was limited to procedures and implementation thereof adopted by the Company

for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an

expression of the opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and

the representation made by the directors and the management, we certify that the Company has

complied with the conditions of corporate governance as stipulated in the above-mentioned

Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the

company nor the efficiency or effectiveness with which the management has conducted the affairs

of the company.

FOR VASUDEVA & ASSOCIATES

CHARTERED ACCOUNTANTS

Sd/-

Date: 17/05/2013 (PIYUSH SINGLA)

Place:Chandigarh PARTNER

Membership No. 520263

33


34

AUDITOR’S REPORT

The Members,

Naraingarh Sugar Mills Limited.

1. We have audited the accompanying financial statements of Naraingarh Sugar Mills Limited

which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit & Loss and

the Cash Flow Statement for the year then ended and a summary of significant accounting

policies and other explanatory information.

2. Management is responsible for the preparation of these financial statements that give a true

and fair view of the financial position, financial performance and cash flows of the Company in

accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the

Companies Act, 1956. This responsibility includes the design, implementation and

maintenance of internal control relevant to the preparation and presentation of the financial

statements that give a true and fair view and are free from material misstatement, whether

due to fraud or error.

3. Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with the Standards on Auditing issued by the Institute of

Chartered Accountants of India. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the Company’s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of the accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.



35

5. In our opinion and to the best of our information and according to the explanations given to us,

the financial statements give the information required by the Act in the manner so required

and give a true and fair view inconformity with the accounting principles generally accepted in

India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(ii) in the case of the Statement of Profit & Loss, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. As required by the Companies (Auditor’s Report) Order, 2003, as amended, issued by the

Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in

the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

7. As required by Section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this

report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement

comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of

the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 31st March,

2013, and taken on record by the Board of Directors, none of the directors is, prima

facie, disqualified as on 31st March, 2013, from being appointed as a director in terms of

clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956.

For VASUDEVA & ASSOCIATES


Firm Registration No. –022239N

Sd/-

Dated : 17th May, 2013 (PIYUSH SINGLA)

Place : Chandigarh PARTNER

Membership No. - 520263



36

ANNEXURE TO THE AUDITOR’S REPORT

(Referred to in paragraph 6 of our report of even date on accounts of Naraingarh Sugar

Mills Limited for the year ended 31st March, 2013).

i. In respect of its Fixed Assets :

a) The Company has maintained proper records showing full particulars, including

quantitative details and situation of fixed assets.

b) As explained to us, the Company has a phased programme of physical verification all of its

fixed assets which, in our opinion, is reasonable having regard to the size of the Company

and the nature of its assets. In accordance with such programme the management, during

the year, has physically verified its fixed assets and no material discrepancies were noticed

on such verification.

c) The Company, during the year, did not dispose off any of its fixed assets.

ii. In respect of its Inventories :

a) According to the information and explanations given to us, the physical verification of

inventories is conducted by the management at periodic intervals; the frequency of

verification is reasonable having regard to the size of the Company and the nature of its

inventories.

b) The procedures of physical verification of inventories followed by the management are

reasonable and adequate in relation to the size of the Company and the nature of its

business.

c) As explained to us, the Company is maintaining proper records of inventory and no

material discrepancies were noticed on physical verification. However, minor

discrepancies noticed on physical verification were properly accounted/adjusted.

iii. a) According to the information and explanations given to us, the Company has not granted

any loan, secured or unsecured, to Companies/firms/other parties covered in the register

maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (a) to (d) of

paragraph 4(iii) of the Order are not applicable; hence not commented upon.

b) According to the information and explanations given to us, the Company has taken,

interest free, unsecured loans from two other parties, covered in the register maintained

under Section 301 of the Companies Act, 1956 (The maximum amount outstanding during

the year - ̀ 1,591.95 lacs and the year end balance was ̀ 1,109.95 lacs).

c) According to the information and explanations given to us, the terms and conditions of


payment of interest and repayment of principal (though not determined) are prima-facie,

not prejudicial to the interest of the Company.

iv. In our opinion and according to the information and explanations given to us, there are

adequate internal control system commensurate with the size of the Company and the

nature of its business with regard to purchases of inventory, fixed assets and with regard to

sale of goods and services. During the course of our audit, we have not observed any

continuing failure to correct major weaknesses in the internal control system.

v. a) According to the information and explanations given to us, the particulars of contracts or

arrangements that need to be entered in the register maintained under Section 301 of the

Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in

pursuance of contracts and arrangements referred to in para v(a) above & exceeding the

value of rupees five lacs in respect of any party, during the year, have been made at prices

which are, prima facie, reasonable having regard to the prevailing market prices at the

relevant time.

vi. According to the information & explanations given to us, the Company has not accepted

deposits from the public within the provisions of Sections 58A and 58AA of the Companies

Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii. In our opinion and according to the information & explanations given to us, the internal

audit system is commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the accounts and records maintained by the Company pursuant

to the rules made by the Central Government for the maintenance of cost records under

clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the

opinion that, prima facie, the prescribed accounts and records have been made and

maintained.

However, we have not made a detailed examination of the records with a view to

determine whether they are accurate & complete.

ix. In respect of its Statutory dues :

a) According to the information & explanations given to us and on the basis of our

examination of the records of the Company, amounts deducted/accrued in the books of

account in respect of undisputed statutory dues including Provident Fund, Income Tax,

Sales Tax, Service Tax, Excise Duty, Customs Duty, Wealth Tax, Cess and other material

statutory dues, to the extent applicable, have generally been regularly deposited, during


37


the year, by the Company with the appropriate authorities.

The following undisputed amounts were outstanding, at the year-end, for a period of more

than six months from the date they became payable.

Name of the Nature of Amount Financial year to which

e the amount relates

Sugar Cane

Purchase Act Cane Purchase Tax 1,891,807 2003-2004

However, the Company, as per the mutual understanding with the concerned Department,

is regularly depositing the specified amount every year.

b) According to the information and explanations given to us, there are no statutory dues,

except Cane Purchase Tax ̀ 33,910,041/- for the financial years 1996-1997 to 2002-2003,

which have not been deposited and remained unpaid, as at 31st March, 2013, on account of

any dispute; the decision of the Hon’ble Punjab & Haryana High Court, Chandigarh is

awaited.

x. The Company does not have any accumulated losses as at 31st March, 2013 and has not

incurred any cash losses during the financial year ended on that date or in the immediately

preceding financial year.

xi. According to the information & explanations given to us and on the basis of verification of

records; subject to realisation of cheques, the Company has not defaulted in repayment of

dues to the banks. The Company has not taken any loan from financial institution.

xii. According to the information & explanations given to us, the Company has not granted

loans and advances on the basis of security by way of pledge of shares, debentures or other

securities.

xiii. According to the information & explanations given to us, the provisions of any special

statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to

the Company.

xiv. According to the information & explanations given to us, the Company is not dealing or

trading in shares, securities, debentures and other investments; accordingly clause (xiv) of

paragraph 4 of the Order is not applicable to the Company.

xv. According to the information & explanations given to us, the Company has not given any

guarantee for loans taken by others from banks or financial institutions.

Statue Dues


38



39

xvi. According to the information and explanations given to us, term loans (vehicle loans &

business loans) have been applied for the purposes for which the loans were obtained.

xvii. According to the information & explanations given to us and on an overall examination of

the Balance Sheet of the Company as at 31st March, 2013, we report that no significant

funds raised on short-term basis have, prima-facie, been used for long-term investment

by the Company.

xviii. The Company has not made any preferential allotment of shares to parties and Companies

covered in the registered maintained under Section 301 of the Companies Act, 1956, during

the year.

xix. According to the information & explanations given to us, the Company, during the year has

neither issued any debentures nor raised any money through a public issue; accordingly

clauses( xix) &( xx) of paragraph 4 of the Order are not applicable to the Company.

xx. Based on the information & explanations furnished by the management, which have been

relied upon by us, we report that no case of fraud on or by the Company has been noticed or

reported during the year under audit.

For VASUDEVA & ASSOCIATES


Firm Registration No. –022239N

Sd/-

Dated : 17th May, 2013 (PIYUSH SINGLA)

Place : Chandigarh PARTNER

Membership No. – 520263



40

BALANCE SHEET AS AT 31ST MARCH, 2013NOTE As at 31st March, 2013 As at 31st March, 2012

` ` ` `EQUITY & LIABILITIES

Shareholders' Funds

(a) Share Capital 1.1 211,953,510 211,953,510

(b) Reserves & Surplus 1.2 258,088,209 233,729,547

Non-Current Liabilities

(a) Long-term Borrowings 1.3 111,839,117 121,504,088

(b) Other Long-term Liabilities 1.4 404,051,722 5,633,250

(c) Long-term Provisions 1.5 6,716,783 5,934,123

Current Liabilities

(a) Short-term Borrowings 1.6 135,016,784 514,180,166

(b) Trade Payables 31,812,926 17,676,034

(c) Other Current Liabilities 1.7 435,647,640 309,666,928

(d) Short-term Provisions 1.8 31,673,863 31,425,579

TOTAL r 1,626,800,554 1,451,703,225ASSETS Non-Current Assets(a) Fixed Assets(i) Tangible Assets 1.9 424,676,934 400,135,790(b) Deferred Tax Asset (Net) 4.11 9,459,362 9,235,882(c) Long-term Loans & Advances 1.10 35,333,274 36,593,039(d) Other Non-Current Assets 1.11 11,056,947 0

Current Assets(a) Inventories 1.12 855,403,750 821,022,170(b) Trade Receivables 1.13 8,801,109 7,758,164(c) Cash & Bank Balances 1.14 16,565,884 27,388,196(d) Short-term Loans & Advances 1.15 215,946,576 99,682,925(e) Other Current Assets 1.16 49,556,718 49,887,058

TOTAL r 1,626,800,554 1,451,703,225Significant accounting policies 3Other notes to accounts 4

sd/-The notes referred to above "AUDITOR'S REPORT" ONKAR ANANDform an integral part of the In terms of our attached (Vice-Chairman)financial statements. report of even date.

sd/- For VASUDEVA & ASSOCIATES BALDEV SINGH KANGCHARTERED ACCOUNTANTS (Managing Director)Firm Registration No. - 022239N

sd/-sd/- JITENDRA ANAND(PIYUSH SINGLA) (Executive Director) PARTNERMembership No. - 520263 sd/-

ASHWANI MITTAL(GM - Accounts & Finance)

sd/-Dated : 17th May, 2013 JASWANT KAURPlace : Chandigarh (Company Secretary)



41

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2013

NOTE As at 31st March, 2013 As at 31st March, 2012 ` ` ` `

REVENUERevenue from operations 2.1-Sales 1,248,279,148-Less : Excise Duty 46,103,960 1,202,175,188 764,724,055Other Operating Revenues 2.2 3,223,648 20,750,859Other Income 2.3 644,400 6,560,736Total Revenue 1,206,043,236 792,035,650

EXPENSESCost of materials consumed 2.4 992,712,384 738,849,653Changes in Inventories 2.5 (36,503,880) (193,615,960)Employee Benefits Expense 2.6 39,320,091 38,858,307Finance Costs 2.7 80,507,952 90,222,391Depreciation & Amortisation Expense 1.9 17,024,185 11,508,942Other Expenses 2.8 81,427,667 77,907,679Total Expenses 1,174,488,399 763,731,012

Profit before tax 31,554,837 28,304,638

Tax Expense 5,971,190-Current Tax 10,146,540 Less : MAT Credit Entitlement 4,039,950 6,106,590-Deferred Tax (223,480) 5,883,110Profit after tax 25,671,727 22,333,448 Earnings per equity share 4.10Basic & DilutedBasic & Diluted- R 10 paid-up 1.35 1.10- R 5 paid-up 0.67 0.55Significant accounting policies 3Other notes to accounts 4The notes referred to above "AUDITOR'S REPORT" ONKAR ANANDform an integral part of the In terms of our attached (Vice-Chairman)financial statements. report of even date.

sd/- For VASUDEVA & ASSOCIATES BALDEV SINGH KANGCHARTERED ACCOUNTANTS (Managing Director)Firm Registration No. - 022239N

sd/-sd/- JITENDRA ANAND(PIYUSH SINGLA) (Executive Director) PARTNERMembership No. - 520263 sd/-

ASHWANI MITTAL(GM - Accounts & Finance)

sd/-Dated : 17th May, 2013 JASWANT KAURPlace : Chandigarh (Company Secretary)



42

NOTE 1.1 : SHARE CAPITALParticulars As at 31st March, 2013 As at 31st March, 2012

` ` ` `1.1.1 Authorised-21,000,000 Equity shares 210,000,000 210,000,000 of ` 10/- each-9,000,000 Redeemable Preference shares of ` 10/- each 90,000,000 300,000,000 90,000,000 300,000,000

1.1.2 Issued, Subscribed & Paid upEquity Share Capital-20,312,200 Equity shares of ` 10/- each, fully paid up 203,122,000 203,122,000 Less:- Calls in arrear * 12,941,000 190,181,000 12,941,000 190,181,000

Preference Share Capital -2,177,251 (12%) Redeemable, (Non-Cumulative), Preference shares of ` 10/- each 21,772,510 21,772,510

TOTAL ` 211,953,510 211,953,510

* represents 2,588,200 Equity Shares @ ` 5 per share (refer note 4.2).

1.1.3 Details of shareholders holding more than 5% equity shares as at year end

a) Equity shares of r 10/- each, fully paid up Name of Shareholder As at 31st March, 2013 As at 31st March, 2012

No. of shares %age of No. of shares %age ofshareholding shareholding

i) United Vanaspati Ltd. 4,374,700 21.54 4,458,200 21.95

ii) Onkar Anand 1,700,000 8.37 1,700,000 8.37

iii) life Medical Devices Pvt. Ltd. 1,500,000 7.38 - -

iv) P.L. Lamba 1,133,400 5.58 1,133,400 5.58

v) Network Fiscal Services Pvt. Ltd. 859,600 4.23 1,588,600 7.82

vi) Industrial Financial Corporation of India - - 1,500,000 7.38

TOTAL 9,567,700 47.10 10,380,200 51.10

1.1.4 Reconciliation of share capital outstanding as at the beginning and at the end of the yearDuring the current year and in the previous year, there has been no movement in the number of equity shares outstanding.



43


NOTE 1.2 : RESERVES & SURPLUSParticulars As at 31st March, 2013 As at 31st March, 2012

` ` ` `1.2.1 Capital ReserveBalance brought forward 37,395,013 37,395,0131.2.2 Capital Redemption ReserveBalance brought forward 48,845,220 48,845,2201.2.3 SurplusStatement of Profit & Loss-Balance brought forward 111,365,425 89,031,977-Add : Net Profit for the year 25,671,727 22,333,448

137,037,152 111,365,425MAT Credit Entitlement-Balance brought forward 36,123,889-Add : Adjustments * 2,726,885

38,850,774-Les :Utilised during the year 4,039,950 34,810,824 171,847,976 36,123,889 147,489,314

TOTAL ` 258,088,209 233,729,547

* represent excess utilisation (` 1,583,220/-) and non-availment (` 1,143,665/-) in earlier years.

NOTE 1.3 : LONG-TERM BORROWINGSParticulars As at 31st March, 2013 As at 31st March, 2012

r r r r1.3.1 "A" SecuredVehicle Loans *From : Non-Banking Financial Companies 1,206,882 1,757,378 Less : Current Maturities 362,765 844,1171.3.2 "B" Unsecured From : Non-Banking Financial Company 805,102 3,751,710Less : Current Maturities 805,102 0From : Directors 110,995,000 110,995,000 115,995,000 119,746,710

. TOTAL r 111,839,117 121,504,088

Note:Vehicle Loans are secured against hypothecation of specified vehicles.

* inclusive of instalments, due and payable in the financial year 2013-2014 and thereafter.

NOTE 1.4 : OTHER LONG-TERM LIABILITIESParticulars As at 31st March, 2013 As at 31st March, 2012

r r r rAdvance From customer 400,000,000 0Security Deposits-From: Farmers, suppliers/ contractors etc. 1,497,838 2,327,838-From: Dealers 1,450,689 2,948,527 1,372,623 3,700,461Retention Money 1,103,195 1,932,789

TOTAL r 404,051,722 5,633,250


44


NOTE 1.5 : LONG-TERM PROVISIONSParticulars As at 31st March, 2013 As at 31st March, 2012

` ` ` `Gratuity 3,950,450-balance brought forward 3,950,450-Add : Current year's provision 791,363 4,741,813-Less : paid during the year 467,315 4,274,498Leave Encashment 1,983,673-balance brought forward 1,983,673-Add : Current year's provision 701,372 2,685,045-Less : paid during the year 242,760 2,442,285

TOTAL ` 6,716,783 5,934,123

NOTE 1.6 : SHORT-TERM BORROWINGSParticulars As at 31st March, 2013 As at 31st March, 2012

` `

1.6.1 SecuredWorking Capital Loan-From : State Bank of India 135,016,784 514,180,166

TOTAL ` 135,016,784 514,180,166

Note :Working Capital Loan from State Bank of India is secured by (a) first hypothecation charge on pari-passu basis with member banks of consortium (State Bank of India, State Bank of Patiala, Canara Bank, Oriental Bank of Commerce and Allahabad Bank) over all current assets of the Company consisting of raw material, semi-finished & finished goods (b) second, pari passu, charge on fixed assets of the Company alongwith equitable mortgage of Land & Building of the Company.

NOTE 1.7 : OTHER CURRENT LIABILITIESParticulars As at 31st March, 2013 As at 31st March, 2012

` ` ` `Current Maturities-of Long-term debts (refer note no. 1.3) 1,167,867 0Interest accrued and due 0 19,226,000Advance : From customers 391,989,903 242,877,726Taxes & Expenses Payable 5,715,010 3,905,233Tax deducted at source 352,893 423,237Other Liabilities 36,421,967 43,234,732

TOTAL ` 435,647,640 309,666,928

NOTE 1.8 : SHORT-TERM PROVISIONS

Particulars As at 31st March, 2013 As at 31st March, 2012

` ` ` `For : Excise Duty on Inventories of Finished Goods 25,567,273 25,764,649For : Current Tax 10,146,540 5,660,930Less : MAT Credit Entitlement 4,039,950 6,106,590

TOTAL r 31,673,863 31,425,579


45

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Date

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17th

May,

2013

Pla

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Chandig

arh


46


NOTE 1.10 : LONG-TERM LOANS & ADVANCESParticulars As at 31st March, 2013 As at 31st March, 2012

` `(Unsecured considered good - unless otherwise stated) Advance -For Capital Goods

39,900 0Deposits with GovernmentDepartments & Other Agencies 482,550 469,150Taxes-MAT Credit Entitlement 36,123,889 (refer note no. 1.2) 34,810,824

TOTAL ` 35,333,274 36,593,039

NOTE 1.11 : OTHER NON-CURRENT ASSETSParticulars As at 31st March, 2013 As at 31st March, 2012

` `Pre-operative Expenses(pending capitalisation)-Addition during the year 11,056,947 0

TOTAL ` 11,056,947 0

NOTE 1.12 : INVENTORIESParticulars As at 31st March, 2013 As at 31st March, 2012

` `(As taken, valued & certified by the management) Raw Material 41,040 0 Work-in-Progress 30,852,160 20,666,840 Finished Goods etc. 815,164,540 788,845,980 Stores & Spares etc. 9,346,010 11,509,350

TOTAL ` 855,403,750 821,022,170

NOTE 1.13 : TRADE RECEIVABLES

Particulars As at 31st March, 2013 As at 31st March, 2012

` `(Unsecured considered good - unless otherwise stated).1.13.1 Exceeding six months 2,500,000 2,561,183

1.13.2 Others 6,301,109 5,196,981

TOTAL ` 8,801,109 7,758,164


47


NOTE 1.14 : CASH & BANK BALANCESParticulars As at 31st March, 2013 As at 31st March, 2012

` `1.14.1 Cash and cash equivalentsBalances with bankscurrent accounts 1,310,669 4,290,961Cheques & drafts in hand 100,000 66,180Cash in hand 8,458,216 15,829,5961.14.2 Other bank balancesFixed Deposits 6,696,999 7,201,459

TOTAL r 16,565,884 27,388,196

NOTE 1.15 : SHORT-TERM LOANS & ADVANCESParticulars As at 31st March, 2013 As at 31st March, 2012

` `

For Supplies & Services 209,892,172 97,254,588Prepaid Expenses 1,605,721 988,012Taxes 69,097 55,076Staff 97,362 131,744Balances with Excise & Custom Authorities 4,282,224 1,253,505

TOTAL r 215,946,576 99,682,925

NOTE 1.16 : OTHER CURRENT ASSETSParticulars As at 31st March, 2013 As at 31st March, 2012

` `Amount Recoverable(Unsecured considered good - unless otherwise stated).-Exceeding six months 49,431,710 49,602,050-Others 125,008 285,008

TOTAL r 49,556,718 49,887,058

NOTE 2.1 : REVENUE FROM OPERATIONS For the year ended For the year endedParticulars 31st March, 2013 31st March, 2012

` ` ` `Sales-Sugar 1,137,756,318 720,352,470-Molasses 97,337,301 78,960,507-Bagasse 13,185,529 1,248,279,148 6,409,266 805,722,243Less : Excise Duty 46,103,960 * 40,998,188

TOTAL r 1,202,175,188 764,724,055

* inclusive of current year's provision of Excise Duty (` 25,567,273/-) and net of previous year's provision of Excise Duty (` 25,764,649/-) on closing inventories of finished goods.


48


NOTE 2.2 : OTHER OPERATING REVENUES For the year ended For the year endedParticulars 31st March, 2013 31st March, 2012

` `Premium on Export Quota 0 16,463,400Sale (Press Mud) 1,637,910 1,483,307Farming Income (Net) 1,547,903 2,804,152Miscellaneous 37,835 0

TOTAL ` 3,223,648 20,750,859

NOTE 2.3 : OTHER INCOME For the year ended For the year endedParticulars 31st March, 2013 31st March, 2012

` `Interest earned 644,400 550,736Other Non-Operating Revenues 0 6,010,000

TOTAL ` 644,400 6,560,736

NOTE 2.4 : COST OF MATERIALS CONSUMED For the year ended For the year endedParticulars 31st March, 2013 31st March, 2012

` `Purchases 992,753,424 738,849,653Less: Closing Stock 41,040 0

TOTAL r 992,712,384 738,849,653

NOTE 2.5 : CHANGES IN INVENTORIES For the year ended For the year endedParticulars 31st March, 2013 31st March, 2012

` ` ` `Stock at Commencement-Work-in-Progress 20,666,840 15,415,590-Finished Goods etc. 788,845,980 809,512,820 600,481,270 615,896,860Stock at Close-Work-in-Progress 30,852,160 20,666,840-Finished Goods etc. 815,164,540 846,016,700 788,845,980 809,512,820

TOTAL ` (36,503,880) (193,615,960)

NOTE 2.6 : EMPLOYEE BENEFITS EXPENSEParticulars For the year ended For the year ended

31st March, 2013 31st March, 2012` ` ` `

Salaries & Wages (salaries & wages, leave encashment & bonus) 35,810,824 34,719,575Contribution to : -Provident Fund 1,398,341 1,469,106Other benefits :-Staff Welfare * 1,319,563 1,752,959-Gratuity 791,363 2,110,926 916,667 2,669,626

TOTAL ` 39,320,091 38,858,307* inclusive of Uniform & Liveries (` 203,029/-).


49


NOTE 2.7 : FINANCE COSTSParticulars For the year ended For the year ended

31st March, 2013 31st March, 2012` ` ` `

Interest-Banks/ Non-Banking Financial Companies 70,384,069 84,375,388-Others 6,673,983 77,058,052 2,307,585 86,682,973Bank Charges 3,449,900 3,539,418

TOTAL ` 80,507,952 90,222,391

NOTE 2.8 : OTHER EXPENSESParticulars For the year ended For the year ended

31st March, 2013 31st March, 2012` ` ` `

Operating Expenses-Consumable Stores 8,508,565 10,763,478-Packing Material 14,106,718 12,483,917-Power & Fuel 5,713,387 4,912,979-Others 16,966,830* 45,295,500 12,850,631 41,011,005Rent 762,118 764,85Repairs & Maintenance-Building/Electricals 3,438,849 5,332,858-Machinery 18,499,693 18,349,729-Computers 199,466 80,165-Vehicles 2,324,759 24,462,767 1,494,753 25,257,505Insurance 2,038,666 714,816Rates & Taxes 1,051,396 699,766Miscellaneous Expenses-Other Administrative Expenses 2,042,160 3,172,939-Travelling & Conveyance 715,070 Directors 0 Staff/Others 811,615-General Charges 2,674,587 2,627,398-Selling & Distribution Expenses 2,138,858 7,667,220 2,801,822 9,317,229Payments to Auditor 150,000 142,500

TOTAL ` 81,427,667 77,907,679

* inclusive of Handling Charges etc. (` 16,825,525/-).


50

NOTE ‘3’ : SIGNIFICANT ACCOUNTING POLICIES(Forming part of Accounts)

FOR THE YEAR ENDED 31ST MARCH, 2013

3.1. Basis of AccountingThe financial statements are prepared under historical cost convention, on accrual basis of

accounting in accordance with the Generally Accepted Accounting Principles in India and

comply with the Accounting Standards (AS) as notified under the Companies (AS) Rules, 2006

and the presentation requirements as prescribed by the revised Schedule VI of the

Companies Act, 1956, to the extent applicable.

3.2. Use of Estimates

The preparation of financial statements inconformity with generally accepted accounting

principles requires that management makes estimates and assumptions that affect the

reported amounts of income and expenses of the year, the reported balance of assets and

liabilities and the disclosure relating to contingent liabilities as at the date of the financial

statements. These estimates are based upon management’s best knowledge of current

events and actions. The difference between the actual results and estimates are recognised

in the period in which the results are known/materialised.

3.3. Fixed Assets

- Tangible Assets

Fixed Assets are stated at their cost of acquisition or construction less accumulated depreciation and impairment of assets, if any.

The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use and net of Cenvat/VAT availed.

- Intangible Assets

Intangible Assets are stated at cost less accumulated amortisation and impairment loss, if any.

- Capital Work-in-Progress

Expenses incurred during construction/installation period are included under capital work-in-progress and allocated to relevant fixed assets in the ratio of cost of the respective assets on completion of construction/installation.

3.4. Depreciation/Amortisation

- Depreciation on fixed assets is provided, on the basis of actual working days/utilisation, on written down value method, as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

- Depreciation on additions to fixed assets is calculated on month-end balances.



51

- Depreciation on assets sold & scrapped, during the year, is provided upto the month in which such fixed assets are sold or scrapped.

- Intangible Assets are amortised on straight line basis over their estimated useful life not exceeding ten years, based on economic benefits that would be derived, as per the estimates made by the Management.

3.5. Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

3.6. Valuation of Inventories

- Raw Material.

At cost (on fifo method)

- Work-in-Progress

At estimated process cost.

- Finished Goods

At cost or market price whichever is lower.

(inclusive of excise duty)

- Stores & Spares

At estimated realisable value.

3.7. Excise Duty/Cenvat

- Excise Duty in respect of goods lying in the factory, at the close of the year, is accounted for at the prevalent applicable rate of duty.

- Cenvat on capital goods is credited to respective assets.

- Cenvat on purchase of raw material and other material is deducted from the cost of such material.

- Cenvat on input service is credited to respective expense.

3.8. Revenue Recognition

- Revenue from sale of goods is recognised when risk and rewards of ownership are transferred to the customers.

- Revenue from services is recognised when services are rendered and related costs are incurred.

- Other income is recognised on accrual basis unless otherwise stated.

- Insurance and other claims are accounted for on settlement of claims/on receipt.

- Sales are shown net of Excise Duty and other taxes, as applicable.


52


3.9. Employee Benefits

a) Short-term Employee Benefits :

Bonus are accounted for on accrual basis.

b) Post-Employment Benefits

(i) Defined Contribution Plans :

- Contributions as required under the Statute/Rule are made to Provident Fund and charged to the Statement of Profit & Loss of the year when the contributions to the funds are due.

- Provisions of Employees State Insurance are not applicable.

(ii) Defined Benefit Plan :

Gratuity is accounted for on accrual basis - the Company has not taken any Gratuity policy with Life Insurance Corporation of India or any other insurer covered under the specified provisions of the Income Tax Act, 1961.

c) Other Long-term Employee Benefit :

Leave Encashment, on the basis of actual computation, is accounted for on accrual basis, during the tenure of employment the payment in respect thereof is made by the Company from its own funds as per the past practice consistently followed by the Company.

d) Termination Benefits :

Other termination benefits are recognised as an expense as and when incurred.

3.10. Borrowing Costs

Borrowing costs which are directly attributable to acquisition, construction or production of a qualifying asset are capitalised as part of the cost of such assets. Other borrowing costs are recognised as an expense in the period in which they are incurred.

3.11 Foreign Currency Transactions

- Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

- Gains or losses, if any, arising due to exchange differences at the time of transaction or settlement are accounted for in the Statement of Profit & Loss.

3.12. Investments

- Investments are classified into current and long-term investments. Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non current investments.

- Current investments are carried at cost or fair value whichever is lower.

- Long-term investments are carried at cost. Provision for diminution in value of long-term investments is made only, if a decline is other than temporary.


53


3.13. Operating Lease

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease charges are recognised as an expense in the Statement of Profit & Loss on a straight line basis.

3.14. Taxes on Income

- Current Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961.

- Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

- Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off assets against liabilities.

- Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will be in a position to avail of such credit under the provisions of the Income Tax Act, 1961.

3.15. Earnings Per Share (EPS)

- Annualised basic earnings per equity share is arrived at based on net profit/(loss) attributable to equity shareholders to the basic weighted average number of equity shares outstanding.

- Annualised diluted earnings per equity share is arrived at based on adjusted net profit /(loss) attributable to equity shareholders to the adjusted weighted average number of equity shares outstanding, for the effects of all dilutive potential equity shares; except where the results are anti-dilutive. At present the Company does not have any dilutive potential equity shares.

3.16. Cash Flow Statement:

- The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard (AS) 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company.

- Cash and cash equivalents presented in the Cash Flow Statement consist of cash in hand, cheques & drafts in hand, balances in current account, fixed deposit (with an original maturity of three months or less).

3.17. Prior Period Items/Extra-ordinary Items

Prior Period Items/Extra-ordinary items, having material impact on the financial affairs of the Company, are disclosed separately.

3.18. Provisions, Contingent Liabilities and Contingent Assets

- The Company recognises a provision when there is a present obligation as a result of a past event and it is more likely than not that there will be an outflow of resources embodying economic benefits to settle such obligation and the amount of such obligation can be



54

reliably estimated. Provisions are not discounted to its present value, and are determined based on the management’s best estimate of the amount of obligation required at the year end. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.

- Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non occurrence of future events not wholly within the control of the Company. Contingent liabilities are also disclosed for present obligations in respect of which it is not probable that there will be an outflow of resources or a reliable estimate of the amount of obligation cannot be made. When there is a possible obligation or a present obligation where the likelihood of an outflow of resources is remote, no disclosure or provision is made.

- Contingent assets are neither recognised nor disclosed in the financial statements.

OTHER NOTES TO ACCOUNTS

4.1. Contingent Liabilities & Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for in the books of account - Nil (Previous year - Nil).

b) Contingent Liabilities:

- Claims against the Company not acknowledged as debt – Nil (Previous year – Nil).

- The following amounts, in earlier years, were deposited (under-protest)

Hon’ble Delhi High Court (` 10,934,631/-):

Sales Tax (` 9,812,631/-) on demand raised by the Department; whereas, as per the policies of the Central Government, Sales Tax on sale of molasses was exempt for five years.

Amit Electricals (` 1,122,000/-), pending settlement of accounts.

Haryana State Government (` 1,491,098/-) :

on account of Local Area Development Tax.

The decisions of the concerned authorities are awaited.

- Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessments will be accounted for in the year in which assessments are completed.

There is no demand pending in respect of the completed assessments.

- Additional demand, if any, arising at the time of assessments will be accounted for in the year in which assessments are completed.

NOTE ‘4’ : (Forming part of Accounts)

FOR THE YEAR ENDED 31ST MARCH, 2013



55

4.2. Issued, Subscribed & Paid up Capital:

a) Calls in arrears (r 12,941,000/- i.e. 2,588,200 Equity Shares @ r 5/- per share), since the financial year 1996-1997, are due from public at large including associates; effective steps have been initiated to regularise and appropriately adjust the account in the ensuing year.

b) Redeemable (Non-cumulative) Preference Shares amounting to r 21,772,2510/- comprises of 2,177,2251 Shares of Rs. 10/- each issued to a Bank.

4.3. Long-term Borrowings :

Secured

Vehicle Loans (` 844,117/-)

From Non Banking Financial Companies are inclusive of installments due & payable within twelve months of the reporting date and the same is not inconformity with the provisions of revised Schedule VI of the Companies Act, 1956.

4.4. Provision for Excise Duty (` 25,567,273/-)

On inventories of finished goods lying in the factory, at the close of the year, has been made on estimation basis in accordance with the guidance note of the Institute of Chartered Accountants of India. However, the said provision does not have any impact on profit for the year.

4.5. a) In the opinion of the Directors, “Current Assets” and “Loans & Advances” are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statutory obligations have been duly complied with.

b) Party balances, incorporated in the financial statements, are subject to confirmation and reconciliation.

4.6. Taxes

- The exact liability of Excise Duty, CST/VAT, Income Tax and other statutory dues are indeterminate pending finalisation of assessments and no undisputed amounts, except Cane Purchase Tax ̀ 1,891,807/- for the financial year 2003-2004 - the Company, as per the mutual understanding with the concerned Department, is regularly depositing the specified amount every year, were outstanding or remained unpaid as at 31st March, 2013.

There were no disputed dues, except Cane Purchase Tax ` 33,910,041/- for the financial years 1996-1997 to 2002-2003, outstanding or remained unpaid as at 31st March, 2013, on account of any dispute; the decision of the Hon’ble Punjab & Haryana High Court, Chandigarh is awaited.

- MAT Credit Entitlement:

MAT Credit Entitlement (` 34,810,824/- inclusive of adjustments r 2,726,885/- and net of utilisation` 4,039,950/- during the year) has been shown under the head ‘Reserves & Surplus’ with corresponding effect under the head ‘Long-term Loans & Advances’ in accordance with the accepted accounting principles; the amount of tax credit determined



56

shall be carried forward upto ten assessment years immediately succeeding the assessment year in which tax credit becomes allowable

Adjustments represent excess utilisation (` 1,583,220/-) and non-availment (` 1,143,665/) in earlier years.

4.7. - Other Long-term Liabilities (` 404,051,722/-):

Security Deposits (` 2,948,527/-) received from farmers, suppliers / dealers / contractors.

The Company has not entered into any contractual agreement(s) with the above referred parties with regard to repayment/refund or payment of interest etc.

Retention Money (` 1,103,195/-) due to suppliers.

- Other Non-Current Assets (` 11,056,947/-):

Pre-operative Expenses (pending capitalisation) represents cost of project appraisal incurred for installation of power generation plant. These expenses will be capitalised on installation of plant.

- Cash & Bank Balances (` 16,565,884/-):

Balance with banks (` 1,310,669/-) are net of cheques pending encashment (` 19,226,000/).

4.8. Related Party Disclosures (AS-18)

Related parties & their relationship and related parties transactions – As per Annexure - (A).

4.9. Segment Reporting (AS-17)

Since the Company primarily operates in one segment (Manufacturing/Trading of Sugar) – therefore segment reporting as required under Accounting Standard - 17 is not applicable – there is no reportable geographical segment either.

4.10. Earnings Per Share (AS-20)

Year ended Year ended31st March, 2013 31st March, 2012

NumeratorNet Profit attributable to Equity shareholders ` 25,671,727 ` 22,333,448

DenominatorNumber of Equity shares No.’s 20,312,200 No’s 20,312,200Weighted average of outstanding Equity shares [As per Annexure - (B)] No.’s 19,018,100 No’s 19,018,100

Nominal Value per Equity share ` 10 ` 10

Earnings per Equity share-Basic & Diluted - ` 10 paid-up ` 1.35 ` 1.10

-` 5 paid-up ` 0.67 ` 0.55



57

4.11. Deferred Tax Assets & Liabilities (AS-22)

The major components of Deferred Tax Asset and Deferred Tax Liability - arising out of timing differences are:

Particulars Amount Totalr r

a) Deferred Tax Liability

Depreciation

- As per Income Tax Act, 1961 15,862,525

- As per Financial Statements 17,024,185 (1,161,660)

Expenses

u/s 43B of the Income Tax Act, 1961(paid during the year)

-Excise Duty 17,718,764

-Leave Encashment 242,760

- Bonus 1,034,580

- Gratuity 467,315

- Cane Purchase Tax 6,081,212 25,544,631 24,382,971

b) Deferred Tax Asset

Expenses

u/s 43B of the Income Tax Act, 1961

(Not paid during the year)

-Excise Duty 22,543,739

-Leave Encashment 701,372

-Bonus 1,035,287 24,280,398

u/s 43B of the Income Tax Act, 1961

- Gratuity 791,363 25,071,761

Deferred Tax Asset (Net)

688,790

Tax on Deferred Tax Asset (@ 32.445%) 223,478

Or say 223,480

Add : Opening Balance 9,235,882

Deferred Tax Asset (Net) Total ` 9,459,362

4.12. Impairment of Assets (AS-28)

During the year, the Company has undertaken a review of all the fixed assets in line with the requirements of AS-28 on “Impairment of Assets” issued by the Institute of Chartered Accountants of India; based on such review, no provision for impairment is required to be recognised for the year.

4.13. Micro, Small & Medium Enterprises

The Company has not received any communication from any of its suppliers/service providers confirming that they are registered under the Micro, Small & Medium


Enterprises Development Act, 2006. In absence of any positive confirmation the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.

4.14. Auditor’s Remuneration

31st March, 2013 31st March, 2012AMOUNT A M O U N T

r r-Audit Fee 95,000 95,000

-In other capacity 35,000

Taxation Matters 25,000

Company Law Matters 15,000 40,000

-Reimbursement of Expenses 15,000 12,500

Total r 150,000 142,500

4.15. Additional information pursuant to the provisions of paragraph 5 of General Instructions of Revised Schedule VI of the Companies Act, 1956 to the extent applicable.

“A” Raw Material Consumed

31st March, 2013 31st March, 2012PARTICULARS AMOUNT AMOUNT

` `

Sugar Cane 992,712,384 738,849,653

31st March, 2013 31st March, 2012Particulars AMOUNT AMOUNT

` `

“B” Finished Goods/By-Products Opening Stock -Finished goods Sugar 765,583,235 570,863,894

-By productsMolasses 4,606,536 9,090,427

Closing StockFinished goodsSugar 806,478,583 765,583,235-By products Molasses 6,881,634 4,606,536Bagasse 1,804,324 -


58


59

4.16. There was no transaction in foreign currency.

4.17. Figures for previous year have been regrouped/rearranged where necessary to conform to the current year’s presentation.

4.18. Figures have been rounded off to nearest rupee.

In terms of our attached report of even date. For and on behalf of the Board of Directors

Sd/- Sd/-

For VASUDEVA & ASSOCIATES ONKAR ANAND BALDEV SINGH KANG CHARTERED ACCOUNTANTS (Vice-Chairman) (Managing Director) Firm Registration No. - 022239N

Sd/- Sd/- Sd/- (PIYUSH SINGLA) JITENDRA ANAND ASHWANI MITTAL

PARTNER (Executive Director) (GM –Accounts & Finance) Membership No. - 520263

Sd/-

Dated: 17th May, 2013 JASWANT KAUR Place : Chandigarh (Company Secretary)



60

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31ST MARCH, 2013CURRENT YEAR PREVIOUS YEAR

31ST MARCH, 2013 31ST MARCH, 2012

( in 000) ( in )

"A" CASH INFLOWS

( I ) FROM OPERATING ACTIVITIES

a) Profit before tax and extra-ordinary items 31,554,837 28,304,638

Adjustments :

Depreciation and amortization 17,024,185 11,508,942

Interest earned (644,400) (550,736)

Interest paid/incurred (Net) 77,058,052 86,682,973

Extraordinary Items 0 0

Prior Period Adjustments 0 0

Profit from operating activities 124,992,674 125,945,817

b) Working capital changes :

(Increase)/Decrease in Inventories (34,381,580) (193,000,500)

(Increase)/Decrease in Trade Receivables (1,042,945) (1,257,341)

(Increase)/Decrease in Short-Term Loans and

Advances (116,263,651) (66,827,657)

(Increase)/Decrease in Other Current Assets 330,340 3,041,218

(Increase)/Decrease in Long-Term Loans and

Advances 53,300 0

Increase/(Decrease) in Other Long-Term Liabilities 399,170,406 1,102,241

Increase/(Decrease) in Long-term Provisions 782,660 405,709

Increase/(Decrease) in Trade Payables 6,520,650 (6,753,248)

Increase/(Decrease) in Other Current Liabilities 132,507,000 226,451,497

Increase/(Decrease) in Short-term Provisions (197,376) 5,237,699

Cash generated from operations 512,471,478 94,345,435

c) Direct taxes paid (Net of refunds) (5,767,376) (6,656,161)

Total "I" 506,704,102 87,689,274

( II ) FROM INVESTING ACTIVITIES

a) Purchase of tangible assets/intangible assets/capital work-in-progress (41,565,329) (1,239,764)

b) Proceeds from sale of tangible assets/intangible

assets/capital work-in-progress 0 0

c) Purchase of investments 0 0

d) Proceeds from sale of investments 0 0

e) Investments in subsidiaries/associates/

business venture 0 0

NARAINGARH SUGAR MILLS LIMITED

` ` 000



61

f) Realisation of Long-Term Loans and

Advances from subsidiaries/associates/

business ventures 0 0 g) (Increase)/Decrease in Other Non-Current Assets (11,056,947) 0

h) (Increase)/Decrease in Fixed Deposits 504,460 (495,660)

i) Dividend received 0 0

j) Interest received 644,400 550,736

Total "II" (51,473,416) (1,184,688)

( III ) FROM FINANCING ACTIVITIES

a) Proceeds from issue of share Capital 0 0

b) Share application money (pending allotment) 0 0

c) Proceeds from Long-Term Borrowings 565,710 0

d) Increase in Short-Term Borrowings (net) 0 48,477,945

e) Redemption of Preference Shares 0 0

f) Repayment of Long-Term Borrowings (9,892,814) (40,933,857)

g) Decrease in Short-Term Borrowings (Net) (379,163,382) 0

h) Dividends paid (including distribution tax) 0 0

i) Interest and other finance costs (77,058,052) (86,682,973)

j) Share issue expenses 0 0

Total "III" (465,548,538) (79,138,885)

"B" Net (decrease)/Increase in cash and

cash equivalents (I+II+III) (10,317,852) 7,365,701

Add : Cash and cash equivalents at the

beginning of the year 20,186,737 12,821,036

"C" Cash and cash equivalents at the

end of the year 9,868,885 20,186,737

CURRENT YEAR PREVIOUS YEAR

Cash and Cash equivalents 31ST MARCH, 2013 31ST MARCH, 2012

at the end of the year ` `

Cash & Bank Balances as per Note 1.14 16,565,884 27,388,196

Less : Fixed Deposits(having maturity more than 3 months) 6,696,999 7,201,459

9,868,885 20,186,737


62


Notes :

1. The above Cash Flow Statement has been prepared under the indirect method set out

in Accounting Standard - 3 notified under Section 211(3C) of the Companies Act, 1956.

2. Previous year figures have been regrouped/reclassified wherever necessary.

In terms of our attached report of even date.

In terms of our attached report of even date. For and on behalf of the Board of Directors

Sd/- Sd/-

For VASUDEVA & ASSOCIATES ONKAR ANAND BALDEV SINGH KANG CHARTERED ACCOUNTANTS (Vice-Chairman) (Managing Director) Firm Registration No. - 022239N

Sd/- Sd/- Sd/- (PIYUSH SINGLA) JITENDRA ANAND ASHWANI MITTAL

PARTNER (Executive Director) (GM –Accounts & Finance) Membership No. - 520263

Sd/-

Dated: 17th May, 2013 JASWANT KAUR Place : Chandigarh (Company Secretary)



63

PROXY FORMNARAINGARH SUGAR MILLS LIMITED

Regd. Office : Village Banondi, PO: Shahzadpur, Tehsil Naraingarh, Distt. Ambala (Haryana)

Folio No. .................................No. of Shares ..........................

I/We ...................................................................................... of .........................................................................

being member(s) of the above named company, hereby appoint ......................................................................

................................................................ of ............................................................................ or falling him/her

............................................................................. of .......................................... as my/our proxy to attend and

vote for me/ue on my/our behalf at the 20th Annual General Meeting of the Company to be held at Village

Banondi, Tehsil Naraingarh, Distt. Ambala (Haryana) on Monday 29th day of July 2013 at 11:30 a.m. and at any

adjournment thereof.

Signed this ............................... day of ............................ 2013

Note : The proxy form duly completed should be deposited at the Registered Office of the Company not later than 48 hours before the time for holding the aforesaid meeting.

ATTENDANCE SLIPNARAINGARH SUGAR MILLS LIMITED

Regd. Office : Village Banondi, PO: Shahzadpur, Tehsil Naraingarh, Distt. Ambala (Haryana)

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND OVER AT THE ENTRANCE OFTHE MEETING HALL

Name : ________________________________________________________________________________

Shareholder : ___________________________________________________________________________

Proxy : ________________________________________________________________________________

I hereby record my presence at the 20th Annual General Meeting of the Company on Monday 29th day of July, 2013 at 11:30 a.m. at the Regd. Office of the Company.

Signature of the Shareholder/Proxy : _________________________________________________________

Regd. Folio Number No. of Share Held


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