Sakthi Sugars

Dear Shareholders,
 
 Vanakkam
 
 I am pleased to present the financial results for the year 2006-07 of
 the Company.  The upswing in the sugar cycle lasted for a very short
 time. The very high production of sugar in India and Brazil and also
 the untimely ban on export of sugar in India created the current crisis
 in the Industry.
 
 The above factors had an adverse effect on the results of the company.
 Although the level of crushing has gone up to 34.77 lakh tonnes
 (previous year 27.47 lakh tonnes), the year has ended with a lesser
 turnover at Rs.766.52 crores compared to Rs.896.02 crores and net
 profit at Rs.30.18 crores (previous year Rs.96.16 crores). The
 operations of distillery and co-generation plants were optimal and have
 contributed to balance out the negative results of the sugar division.
 I am glad to mention that the dividend is being maintained at 15% to
 equity shareholders.
 
 The new sugar unit with 3500 TCD capacity and 25 MW co-generation plant
 at Modakurichi were commissioned in September 2007. Implementation of
 the other two co-generation projects at Sivaganga and Sakthinagar are
 in progress and are expected to go on stream in December 2007 and March
 2008 respectively. The company has also expanded the distillation
 capacity to 120 KLPD from 90 KLPD at Sakthinagar. Availability of sugar
 cane continues to be sufficient to maintain optimum utilization of the
 capacity. With all the new capacities in operation, I am confident that
 the performance of the Company will be better in the years to come.
 
 I express my sincere gratitude to the stake holders for their continued
 support. I thank my colleagues on the Board, cane growers, suppliers,
 bankers, financial institutions, Central and State Governments and all
 others for their continued support.
 
 With regards,
 
 N MAHALINGAM
 Chairman