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Sakthi Sugars Directors Report, Sakthi Sugars Reports by Directors
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Sakthi Sugars
BSE: 507315|NSE: SAKHTISUG|ISIN: INE623A01011|SECTOR: Sugar
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Download Annual Report PDF Format 2012 | 2011
Directors Report Year End : Mar '12    « Mar 11
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 
 
                                                        (Rs.in lakhs)
 
 Profit before finance cost and depreciation 
 & amortization expense                                        13304.22
 
 Less: Finance cost                             12126.30
 
 Depreciation & amortization expense             6528.39
 
                                                               18654.69
 
 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 Add : Debenture Redemption Reserve withdrawn     551.71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
  
                                                                2049.97
 
 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.
 
 DISTILLERY DIVISION
 
 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.
 
 SOYA DIVISION
 
 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.
 
 CO-GENERATION DIVISION
 
 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.
 
 FUTURE OUTLOOK
 
 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
 previous year.
 
 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
 Banks/Financial Institution.
 
 DEPOSITS
 
 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.
 
 DIRECTORS
 
 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
 hereby confirmed:
 
 a.  that in the preparation of the annual accounts for the financial
 year ended 31.3.2012, applicable accounting standards had been
 followed;
 
 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
 concern basis.
 
 AUDIT COMMITTEE
 
 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 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.
 
 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 the Listing
 Agreement is given in the section on Corporate Governance.
 
 AUDITORS
 
 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.
 
 COST AUDIT
 
 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
 reduced.
 
 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.
 
 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
 
 Coimbatore                                                N MAHALINGAM
 
 30th May 2012                                                 Chairman
Source : Dion Global Solutions Limited
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