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Debenture Redemption Reserve withdrawn 494.29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
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