The Directors present their Annual Report together with the audited
financial statements of the Company for the year ended 31st March 2012.
FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2012
Profit before finance cost and depreciation
& amortization expense 13304.22
Less: Finance cost 12126.30
Depreciation & amortization expense 6528.39
Profit before Tax (5350.47)
Less: Income Tax expenses:
Deferred Tax (578.81)
Profit after Tax (4771.66)
Add : Debenture Redemption Reserve withdrawn 551.71
Transfer from General Reserve 1498.26
Closing balance (2721.69)
REVIEW OF OPERATIONS SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during
the year 2011-12 is as under:
Name of the Units Cane crushed (in tonnes)
Sakthinagar : 1562243
Sivaganga : 550126
Modakurichi : 472696
Dhenkanal : 315565
During the year under review, 2.78 lakhs MT of sugar was produced by
the Company. As compared to the previous year, there is improvement in
the availability of sugarcane in general and the total cane crush by
the Company during the year was better than the previous year, which
was for 15 months.
During the year under review 339.78 lakh litres of Industrial Alcohol
was produced at Sakthinagar Distillery Unit and 62.41 lakh litres at
Dhenkanal Distillery Unit.
26,072 tonnes of soya bean had been crushed in the Soya plant during
the year under review. This division has exported products worth Rs.
1984.47 lakhs to various countries.
The total power generated in the co-generation plant during the year
was 3393.77 lakh units out of which 2244.17 lakh units were exported to
Tamilnadu Electricity Board and others.
For the next season 2012-13, sugarcane availability is expected to be
higher than the current year leading to increased sugar production in
the country. This may impact the selling price of sugar. However, the
Central Government''s policy of allowing export of sugar will help the
Indian sugar industry to certain extent. The Company expects to crush
higher quantity of cane during the current year compared to the
The performance of the Industrial Alcohol Division and the Power
Division of the Company are expected to be satisfactory for the current
year with higher availability of molasses and bagasse.
The Company continues to be under the Corporate Debt Restructuring
Scheme with respect to restructuring of its secured debts availed from
The Company has not accepted any deposit from public during the year
under review. At the end of the financial year, 21 deposits amounting
to Rs. 5.11 lakhs (including interest) which were due for repayment
remained unclaimed on their due dates. Of these, 2 deposits amounting
to Rs.0.44 lakh have since been repaid.
The Directors regret to report that Sri G G Gurumurthy, Director,
expired on 26.6.2011. He was a Director on the Board for a period of
about 28 years. The Directors place on record their appreciation of the
valuable services rendered by him during the tenure of his office as
Director of the Company.
The following Directors retire by rotation at the ensuing Annual
General Meeting and are eligible for reappointment:
1. Sri M Balasubramaniam
2. Sri C Rangamani
3. Sri S S Muthuvelappan
The Board of Directors at its meeting held on 29th September, 2011 has
reappointed Dr M Manickam as Managing Director of the Company for a
period of five years from 25th October, 2011, subject to the approval
of members and the Central Government.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' responsibility statement, it is
a. that in the preparation of the annual accounts for the financial
year ended 31.3.2012, applicable accounting standards had been
b. that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
Loss of the Company for the year under review;
c. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
d. that the Directors had prepared the annual accounts on a going
The Audit Committee comprises of the following Directors as its
1. Sri C Rangamani, Chairman
2. Sri S Doreswamy
3. Sri M Balasubramaniam and
4. Sri V M Manogaran
The auto industry globally is performing well. The performance of both
Indian and European subsidiaries having manufacturing facilities, viz.
Sakthi Auto Component Limited, Sakthi Auto Ancillary Private Limited
and Sakthi Portugal SA, have shown considerable improvement as compared
to the previous year. It is expected that the growth in the performance
will continue in the current year also.
Pursuant to the general direction given by the Central Government, vide
general circular dated 8th February 2011, and the consent given by the
Board of Directors of the Company in terms of the said circular, copies
of the Balance Sheet, Statement of Profit and Loss, Reports of the
Board and of the Auditors, as the case may be, of the following
subsidiary companies, viz. Sakthi Auto Component Limited, Sakthi Auto
Ancillary Pvt Limited, Orlandofin BV, Sakthi Netherlands BV, Sakthi
European Foreign Sales Corporation BV, Sakthi Holdings BV, Sakthi
Services GmbH, Sakthi Portugal SA and Sakthi Auto Mauritius Limited
have not been attached to the Balance Sheet of the Company as at 31st
March 2012. The consolidated financial statement and the details of the
subsidiaries that are required to be provided under the said circular
have been separately furnished forming part of the Annual Report. The
annual accounts of the subsidiary companies and the related detailed
information on the accounts of the subsidiary companies will be made
available to the shareholders of the Company and of the subsidiary
companies on specific request at any point of time. The Annual Accounts
of the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and of the
subsidiary companies concerned. The details of the accounts of the
above subsidiary companies are also provided in the Company''s website.
In terms of Accounting Standard 21, accounts of the following
subsidiaries, viz. Sakthi Europe Verwaltungs GmbH, Arvika Gjuteri AB,
Arvinova AB, Arvika Handforming Gjuteri AB and Sakthi Sweden AB, are
not consolidated since there is a long term restriction in the flow of
cash from these subsidiaries to the holding company as the said
subsidiaries are under the control of the Administrators appointed by
the respective Courts in Germany and Sweden.
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors Certificate with respect to its
compliance forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the Listing
Agreement is given in the section on Corporate Governance.
M/s P.N.Raghavendra Rao & Co., Chartered Accountants , Statutory
Auditors of the Company, retire at the conclusion of the forthcoming
Annual General Meeting and being eligible, have offered themselves for
re-appointment. As required under Section 224(1B) of the Companies Act
1956, the Company has obtained certificate in writing from M/s. P N
Raghavendra Rao & Co. to the effect that their appointment, if made,
will be within the limit prescribed in the said Section.
M/s STR & Associates, Cost Accountants, Trichirapalli, are the Cost
Auditors for auditing the cost accounts relating to Sugar, Industrial
Alcohol and Power Divisions of the Company for the year ended 31st
March 2012. The due date of filing the Cost Audit Report is 27th
September 2012. The same firm has been reappointed as Cost Auditors for
Sugar, Industrial Alcohol, Power and Soya Divisions for the financial
year ending 31st March 2013.
For the year ended 31st March 2011, the due date for filing cost audit
reports for the Sugar, Industrial Alcohol and Power Divisions of the
Company was 27th September 2011, and the actual date of filing the cost
audit reports was 24th September 2011.
CONSERVATION OF ENERGY
(a) Energy conservation measures taken:
Use of Integrated Evaporation System along with multi pressure
distillation system in the Distillery at Sakthinagar.
In Sakthinagar sugar mill, 3rd vapour is utilized instead of 1st vapour
at filtrate juice clarifier for filtrate juice heating.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
No significant investment is envisaged.
(c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Integrated Evaporation System reduces generation of effluent
considerably and consumption of steam per litre of alcohol gets
There will be reduction in the requirement of steam in the
manufacturing process of sugar.
Particulars regarding consumption of energy, research and development,
technology absorption and foreign exchange earnings and outgo have been
provided in Annexure 1 to the Report.
PARTICULARS OF EMPLOYEES
The Company has no employee drawing remuneration attracting the
provisions of section 217(2A) of the Companies Act, 1956.
With reference to the Auditors'' remarks, your Directors wish to state
that as per the legal opinion obtained, the interest converted into
loan under the Corporate Debt Restructuring Scheme would be accounted
as and when they become payable.
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
Coimbatore N MAHALINGAM
30th May 2012 Chairman