To the Members
 
 The Directors present their Annual Report together with the audited
 financial accounts of the Company for the year ended 31st March 2011
 consisting a period of 15 months.
 
 FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2011    (Rs. in lakhs)
 
 Profit before interest and depreciation                        9249.54
 
 Less: Interest Charges                           18165.43
 
 Depreciation on Fixed Assets                      3878.48
 
                                                               22043.91
  
 Profit before Tax                                           (12794.37)
 
 Less: Income Tax Expenses:
 
 Deferred Tax                                                 (2808.48)
 
 Profit after Tax                                             (9985.89)
 
 Add: Surplus from Previous year                   5721.79
 
 Debenture Redemption Reserve withdrawn             494.29
 
 Transfer from General Reserve                     3769.81
 
                                                                9985.89
 
 Surplus/Deficit carried over                                       -
 
 REVIEW OF OPERATIONS
 
 SUGAR DIVISION
 
 The quantum of sugar cane crushed and raw sugar processed at various
 units of the Company during the year 2010-11 is as under:
 
 Name of the Units      Cane crushed       Raw sugar processed
                         (in tonnes)               (in tonnes)
 
 Sakthinagar Unit            1549498                     77126
 
 Sivaganga Unit               491845                     22088
 
 Modakurichi Unit                  -                    181712
 
 Dhenkanal Unit               314960                     55612
 
 Due to shortage of cane, Modakurichi Unit did not take up the crushing
 operation during the year under review. Sugar cane crushed in
 Sakthinagar Unit includes sugar cane drawn from areas of Modakurichi
 Unit.
 
 Out of the total sugar of 5.37 lakhs MT produced by the Company during
 the year under review, 3.14 lakhs MT of sugar was produced by
 processing of Raw sugar.
 
 DISTILLERY DIVISION
 
 During the year under review, 490.77 lakh litres of industrial alcohol
 was produced at Sakthinagar Distillery Unit and 86.06 lakh litres at
 Dhenkanal Distillery Unit.
 
 The Company has not produced ethanol as the ethanol blending programme
 has not been implemented in the State of Tamilnadu.
 
 SOYA DIVISION
 
 27995 tonnes of soya bean has been crushed in the Soya plant during the
 year under review. This division has exported products worth Rs.2336.54
 lakhs to various countries.
 
 CO-GENERATION DIVISION
 
 The total power generated in the co-generation plant by the Company
 during the year was 5640 lakh units out of which 4205 lakh units have
 been exported to Tamilnadu Electricity Board and others. The
 implementation of the second co-generation plant with 25 MW capacity at
 Sakthinagar is delayed and is expected to be commissioned in the
 current year.
 
 Sakthinagar unit has been awarded first prize for best co-generation in
 Tamilnadu region for 2009-2010 by the South Indian Sugar Cane and Sugar
 Technologists Association, Chennai.
 
 FUTURE OUTLOOK
 
 For the year 2011 -12, cane availability is expected to be slightly
 better than the year 2010-11 on account of increase in planting of
 sugarcane in the command areas. The country''s total production of sugar
 during the season 2011-12 is estimated to be higher than last season.
 This may lead to reduction in the selling price of sugar. Besides
 Government policies, the global demand-supply trends will also have an
 impact in the financial performance of the Indian sugar industry.
 
 The performance of the Industrial Alcohol Division and Power Division
 of the Company are expected to be satisfactory for the current year.
 
 The Company continues to be under the Corporate Debt Restructuring
 Scheme with respect to restructuring of its secured debts availed from
 Banks/Financial Institution.
 
 DEPOSITS
 
 The Company has not accepted any deposit from the public during the
 year under review. At the end of the financial year, 46 deposits
 amounting to Rs.10.45 lakhs (including interest) which were due for
 repayment remained unclaimed on their due dates. Of these, 4 deposits
 totalling Rs. 0.59 lakh have since been repaid.
 
 DIRECTORS
 
 The following Directors retire by rotation at the ensuing Annual
 General Meeting and are eligible for reappointment:
 
 1.  Sri S Doreswamy
 
 2.  Sri V K Swaminathan
 
 3.  Sri P K Chandran
 
 Sri T Santhanakumar was appointed by IDBI Bank as its nominee director
 in the place of Smt S Usha with effect from 21.10.2010. His nomination
 was withdrawn effective from 28.5.2011 and in his place Sri V M
 Manogaran has been appointed as Nominee Director. Your directors wish
 to place on record the appreciation of the services rendered by Smt S
 Usha and Sri T Santhanakumar during the tenure of their office as
 Directors of the Company.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements under Section 217(2AA) of the Companies
 Act, 1956 with respect to Directors'' responsibility statement, it is
 hereby confirmed:
 
 a.  that in the preparation of the annual accounts for the financial
 year ended 31.3.2011 the applicable accounting standards had been
 followed;
 
 b.  that the Directors had selected such accounting policies and
 applied them consistently and made judgements and estimates that are
 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
 concern basis.
 
 AUDIT COMMITTEE
 
 The Audit Committee was reconstituted on 10.11.2010 and 30.05.2011 on
 account of the change in the Nominee Director of IDBI Bank Limited. At
 present the Audit Committee comprises of the following Directors as its
 members:
 
 1.  Sri C Rangamani, Chairman
 
 2.  Sri S Doreswamy
 
 3.  Sri M Balasubramaniam and
 
 4.  Sri V M Manogaran
 
 SUBSIDIARY COMPANIES
 
 The auto industry has turned around globally and is buoyant. There has
 been significant improvement in the level of operation and performance
 of both the Indian and European subsidiaries having manufacturing
 facilities, viz. Sakthi Auto Component Limited, Sakthi Auto Ancillary
 Private Limited and Sakthi Portugal S.A. The performance of these
 subsidiaries in the current year is also expected to be encouraging.
 
 On the application made by Tilan Sugar Limited (TSL), wholly owned
 subsidiary of the Company, under Easy Exit Scheme 2010 announced by the
 Central Government, the name of Tilan Sugar Limited (TSL) has been
 struck off in the register maintained in the office of the Registrar of
 Companies, Tamilnadu, Chennai and is dissolved with effect from
 26.10.2010.
 
 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, Profit and Loss Account, 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
 and Sakthi Portugal SA, have not been attached to the Balance Sheet of
 the Company as at 31st March 2011. 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 related detailed information on the
 accounts of the subsidiary companies will be made available to the
 shareholders of the company and 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 the investors at the
 Registered Office of the Company and that of the subsidiary companies
 concerned. The details of the accounts of the above subsidiary
 companies are also provided in the Company''s website.
 
 Since the following step down subsidiaries, viz. Sakthi Europe
 Verwaltungs GmbH, Arvika Gjuteri AB, Arvinova AB, Arvika Handforming
 Gjuteri AB and Sakthi Sweden AB, are under the control of the
 Administrators appointed by the respective courts in Germany and in
 Sweden and there is a long term restriction in the flow of cash from
 these subsidiaries to the holding company, accounts of these companies
 are not consolidated in accordance with the provisions contained in
 Accounting Standard. In view of the dissolution of Tilan Sugar Limited,
 the accounts of this company are also not consolidated.
 
 During the year under review, Sakthi Auto Mauritius Limited in
 Mauritius and Luscidco Holdings Co. Limited in Cyprus have become the
 subsidiaries of the Company with effect from 26th January 2011. As
 their financial year has ended prior to the date of acquisition, i.e.
 on 31st December 2010, the accounts of these companies are not
 consolidated.
 
 CORPORATE GOVERNANCE
 
 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 Listing
 Agreement is given in the section on Corporate Governance.
 
 AUDITORS
 
 M/s P.N.Raghavendra Rao & Co., Chartered Accountants, the Statutory
 Auditors of the Company, retire at the conclusion of the Annual General
 Meeting and being eligible, have offered themselves for re-appointment.
 
 COST AUDIT
 
 The Company appointed M/s STR & Associates, Cost Accountants, to audit
 the cost accounts relating to Sugar Units, Industrial Alcohol units for
 the year ended 31st March 2011 with the approval of the Central
 Government. The same firm has been appointed as Cost Auditors for the
 financial year ending 31st March 2012.
 
 CONSERVATION OF ENERGY
 
 (a) Energy Conservation measures taken:
 
 Waste heat recovery system has been installed in TVP Plant in Soya
 Division wherein condensate waste from dryer is collected and used to
 pre-heat water used in extraction process.
 
 (b) Additional investments and proposals, if any, being implemented for
 reduction of consumption of energy: Use of Variable Frequency Drives at
 places wherever possible.
 
 (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:
 
 Substantial savings in power consumption.
 
 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.
 
 AUDITORS REPORT
 
 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.
 
 ACKNOWLEDGEMENT
 
 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
 
                                                           N MAHALINGAM 
                                                               Chairman
 
 Coimbatore 
 30th May 2011