UGSIL reported a Loss after tax of Rs. (1087.09) on a turnover of Rs.11713.90 lacs for the quarter ended 31st March, 2010.

The health of the sugar industry was adversely affected during this quarter. Production was low as the availability of sugarcane was extremely limited during the entire season due to poor plantation and poor yield. Furthermore, soaring sugar and gur prices saw keen competition amongst sugar mills and alternate sweeteners resulting in soaring sugarcane prices. The free sale sugar market has been volatile throughout the year with prices reaching record levels. In response to high food inflation and mounting pressure from the opposition, the government took drastic steps to control the rise in sugar price. Firstly, the government increased levy sugar obligation from 10% to 20% for distribution through PDS which the industry has contributed at a staggering loss. Secondly, stock limitations were imposed on consumers for domestic sugar thereby curbing consumption. Thirdly, white sugar imports were allowed at zero duty leading to abundant availability of sugar in the country. Finally, the monthly release system was converted to a weekly system. All these measures have seen a collapse in the domestic sugar prices leading to cash losses for the sugar industry.

The problem has been further compounded due to non-fixation of Levy Sugar prices by the Government of India and increase in Levy obligation. Sales and inventory of Levy Sugar have been accounted for on the basis of provisional prices fixed for the Sugar Season 2004-05. Due to non fixation of levy prices and increase in levy obligation from 10% to 20% against the production of Sugar during season 2009-10 , the Company has accounted for loss of Rs.4082.85 lacs during the nine months period ended 31st March, 2010.

The Company’s shares are listed at the NSE, BSE and CSE and are actively traded.