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Simbhaoli Sugars Directors Report, Simbhaoli Sugar Reports by Directors
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Simbhaoli Sugars
BSE: 507446|NSE: SIMBHSUGAR|ISIN: INE270C01017|SECTOR: Sugar
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Download Annual Report PDF Format 2013 | 2012
Directors Report Year End : Mar '13    Mar 12
To the members of Simbhaoli Sugars Limited
 
 The directors have pleasure in placing the directors'' report together
 with management discussion and analysis report for the financial year
 ended on March 31, 2013.
 
 FINANCIAL RESULTS AND ANALYSIS
 
 A summary of the stand alone financial results of the Company for the
 year ended March 31, 2013 is stated as under. The results do not
 include the results of Simbhaoli Spirits Limited for full year and
 Simbhaoli and Chilwaria power businesses from the period starting
 January 26, 2013 onwards.
 
                                               (Rs in lakh)
 
 Particulars                Year ended       18 months
                            Mar 31, 2013     period ended 
                                             Mar 31, 2012
 
 Net Sales/Income 
 from operations               88,424        1,19,953
 
 Other Income                   1,774           5,131
 
 Profit/(Loss) before 
 Interest, depreciation 
 and exceptional items         (1,695)          9,318
 
 Interest expense              11,198          15,415
 
 Depreciation                   3,591           5,745
 
 Profit /(Loss) before 
 tax & exceptional 
 items (Loss)                 (16,484)        (11,840)
 
 Exceptional Gains (net)       17,486           9,306
 
 Tax expense                      201             378
 
 Deferred tax benefit/(charge) (4,748)          4,455
 
 Net Profit/(Loss) after Tax   (3,946)          1,542
 
 During the year, the business of the Company has been affected
 adversely on account of lower capacity utilisation, low sugar
 recoveries in the state of Uttar Pradesh, lower sugar prices, and
 higher finance cost. In view of absence of distributable profits,
 substantial carried forward business losses, and need to conserve cash,
 the directors express their inability to recommend any dividend for the
 year.
 
 The current financial year is for twelve months from April 1, 2012 to
 March 31, 2013 whereas the corresponding previous period figures are
 for a period of eighteen months from October 1, 2010 to March 31, 2012
 and the same are not directly comparable. The analysis of the audited
 Balance Sheet of the Company as at March 31, 2013 and Profit and Loss
 account for the 12 months period ended on that date is reported as
 under:
 
 Share Capital
 
 The following movement in the share capital has taken place during the
 year:
 
 (i) Authorised Share Capital: The authorised share capital of the
 Company is increased and rescheduled from Rs. 40 crore divided into 3.8
 crore equity shares of Rs.10 each and 2 lakh preference shares of Rs.
 100 each to Rs. 75 crore divided into 3.5 crore equity shares of Rs.10
 each and 40 lakh preference shares of Rs. 100 each.
 
 (ii) ESOPs: Nil (previous period 32,190) equity shares were issued and
 allotted to the employees under ESOP.
 
 (iii) Issue of Equity shares: Nil (previous period 30,00,000) equity
 shares were issued on preferential basis.
 
 (iv) Issue of warrants: Nil (previous period 25,00,000) equity warrants
 were issued and allotted to specified promoters.
 
 (v) Issue of Cumulative Redeemable Preference Shares (CRPS): 32,00,000
 (previous period Nil) 8 percent CRPS of Rs. 100 each at par of value of
 Rs. 32 crore were issued and allotted to the specified promoters and
 selective investors of the Company.
 
 (vi)Conversion of Warrants: 6,57,500 (previous period 13,42,500) equity
 shares issued and allotted on conversion of 6,57,500 warrants. The
 warrant holders have not exercised the conversion option and remaining
 5,00,000 warrants have lapsed due to non-subscription.
 
 Reserves and Surplus
 
 The following movement has taken place during the year under the
 reserves and surplus head:
 
 (i) Revaluation reserve: Deduction of Rs. 57 lakh due to depreciation
 charged on re-valued amount of fixed assets.
 
 (ii) Securities Premium account: Increased by Rs. 2.4 crore on account
 of issue and allotment of equity shares on conversion of warrants.
 
 Total shareholders'' funds of the Company are Rs 8 crore (previous
 period Rs. 14.55 crore). The book value of each equity share is Rs. 2.8
 (previous period Rs. 5.3).
 
 Secured loans
 
 The loan accounts of the Company remained regular with the lending
 banks. The revision in the last restructuring carried out under
 corporate debt restructuring scheme of RBI has been recognised during
 the year under report.
 
 Unsecured loans
 
 Short term loans standing at Rs 25 lakh at the beginning of the year
 increased to Rs. 54.4 crore.
 
 Deferred tax liabilities/assets (net)
 
 The Company follows Accounting Standard-22, Accounting for taxes on
 income, and in consideration of prudence and current status of the
 industry in which it is operating, has recognised deferred tax asset,
 only to the extent of deferred tax liability of Rs. 82.7 crore on
 unabsorbed depreciation, and brought forward business losses, out of
 total deferred tax assets of Rs 131.7 crore.
 
 Fixed assets
 
 Capital expenditure: Addition to the fixed assets aggregating Rs 15.52
 crore was made during the year which includes the following:
 
 i) Rs 2.04 crore on account of the exchange differences on long term
 monetary items related to the acquisition of fixed assets,
 
 ii) Rs 6.41 crore for setting up a new digester plant at Chilwaria
 ethanol division,
 
 iii) Rs 2.5 crore, for installing an AC drive at one of the mill in
 Chilwaria Sugar Division, and
 
 iv) Rs 4.57 crore on account of miscellaneous assets.
 
 Retirement of assets: The Company has deducted Rs. 183.6 crore
 (previous year Rs 90.18 crore) from fixed assets during the year which
 includes the following:
 
 i) Rs 182.07 crore to Simbhaoli Power, comprising Rs 157.88 crore on
 business transfer and Rs 24.19 crore on lease rental,
 
 ii) Rs 1.23 crore to Simbhaoli Spirits Limited as land transfer, and
 
 iii) Balance Rs 0.3 crore on miscellaneous assets.
 
 Investments
 
 The Company has following investments as on March 31, 2013:
 
                                                Amount in Rs/laks
 
 Particulars                     Opening    Additions   Balance as
                                 balance    during the  on March 31,
                                            year        2013
 
 (a) 2,00,800 equity shares of 
 Rs 10 each in Integrated 
 Casetech Consultants Private
 Limited                           18          20         38
 
 (b) 2,69,93,950 Equity 
 shares of Rs. 10 each in
 Uniworld Sugars Pvt. Ltd          3445        3549      6994
 
 (c) 300 Equity Shares of AED 
 1000 each in Simbhaoli
 Global Commodities DMCC           40           0         40
 
 (d) 3,17,99,990 Equity shares 
 of Rs. 10 each in
 Simbhaoli Spirits Ltd              5         25400     25405
 
 (e) 5,62,031 Equity shares 
 of Rs. 10 each in
 Simbhaoli Power Pvt Ltd            5           512       517
 
 (f) Others                       neg             2         2 
 Investments at the end of 
 the year                        3513         29483     32996
 
 Inventories
 
 Inventory amounting to Rs 544.16 crores (previous period Rs 528.96
 crores) includes finished goods, raw material, process stocks, and
 store items. The sugar at the year end is valued at Rs 3233 per qtl
 (previous period Rs 3079 per qtl).
 
 Sundry debtors
 
 Sundry debtors (net) amounting to Rs. 74.03 crore, (previous period Rs.
 74.79 crore), are considered good and realisable.  Provisions are
 generally made for all debtors outstanding for over 360 days subject to
 their scope of realisation, industry trend and depending on the
 management''s perception in this regard. Debtors are at 8%, representing
 an outstanding of 30 days (previous period 22 days) of gross revenues.
 
 Cash and Bank Balance
 
 Cash and bank balance of Rs 83.33 crore (previous period Rs 67.45
 crore) includes fixed deposits of Rs 23.34 crore out of which Rs 31.83
 crore are pledged with banks for securing certain loans, letters of
 credit, guarantees and facilities etc.
 
 Loans and Advances
 
 Loans and advances stand at Rs 49.98 crore (previous period Rs 77.99
 crore). During the year, claim against the vessel owner/consignor for
 raw sugar loss took place in 2009 has been partially realised.
 
 Current liabilities and provisions
 
 Current Liabilities are on higher side because of increase in sugarcane
 price dues for the current year, operations, arrangement of payment of
 cane arrears through the farmers'' tie up loans and operational losses
 incurred during the last two financial years.
 
 Current Liabilities of Rs 927 crore (previous period Rs 805 crore)
 comprises Rs 9.3 lakh (previous period Rs 30.64 lakh) amount due to
 small scale industries, the suppliers of raw materials, stores and
 services and other expenses.  Other provisions include provisions for
 compensated absences.
 
 Sales and other income
 
 Sales and other income (net of excise) is accounted at Rs. 901.98 crore
 (previous period Rs. 1250.84 crore). The other income comprises
 interest, rent, profit on sale of fixed assets, and miscellaneous
 earnings.
 
 The negative EBIDTA under sugar segment is attributed to high cost of
 production during the year on account of higher raw material and
 consistent decline in sugar prices after October 2012.
 
 The segment wise allocation of revenues for the year 2012- 13 and for
 proceeding two accounting years is as under:
 
                                                (Rs. in lakh)
 
 Years/         Sugar             Alcohol                Power 
                Turnover    %age  Turnover     %age  Turnover   %age
 
 2009-10        110,592    74.12   36,146      24.23  2,467    1.65
 
 2010-12*       107,206    86.75   10,389       8.41  5,987    4.84
 
 2012-13         80,841    88.65    8,258       9.06  2,087    2.29
 
 *consisting of a period of 18 months
 
 Exceptional Income
 
 The exceptional incomes of the Company during the year have been:
 
 a) Profit on transfer of land to Simbhaoli Spirits, Rs 117.79 crore
 
 b) Profit on transfer of power undertakings, Rs 54.69 crore
 
 c) Profit on transfer of assets on finance lease, Rs 2.38 crore
 
 Accounting policies
 
 The Company''s financial statements are prepared as per revised Schedule
 VI under the Companies Act, 1956 and Generally Accepted Accounting
 Principles, as applicable w.e.f.  April 1, 2012. Therefore, previous
 year figures have been regrouped/ reclassified wherever necessary to
 correspond with the current year''s classification/disclosure. The Board
 of directors of the Company accepts responsibility for the integrity
 and objectivity of these financial statements, as well as for various
 estimates/ judgments used in preparation of these statements. The
 estimates and/or judgments have been made on a consistent, reasonable
 and prudent basis to reflect true and fair view of the state of the
 affairs of the Company.
 
 Debt servicing and public deposits
 
 The Company has been able to meet its obligations towards the lenders
 for principal and interest, in terms with the respective letter of
 sanctions/approvals. The lenders of the Company have approved certain
 modification in the previous restructuring carried out under CDR
 arrangement on August 27, 2012. This includes the re-phasing of
 repayment obligations of certain loans for a period of 12 months within
 the overall repayment period envisaged under CDR scheme. The Company
 does not have any public deposits.
 
 AUDITORS'' REPORT
 
 The comments on the statement of account referred to in the report of
 the auditors are self-explanatory and explained in the appropriate
 notes to accounts.
 
 DIRECTORS
 
 At the forthcoming 76th Annual General Meeting (AGM) of the Company,
 Mr. S C Kumar and Mr. Yashwant Varma, Directors on the Board of the
 Company, are retiring by rotation. Mr. S C Kumar, being eligible, has
 offered himself for re-appointment.  Mr. Yashwant Varma, has expressed
 his inability to continue as director on the Board of the Company.
 
 During the year, Justice Chander Kishan Mahajan has been appointed as
 an additional director on the Board of the Company to broad base the
 composition of the Board. Mr. Mahajan is an independent director within
 the meaning of clause 49 of the listing agreement with stock exchanges.
 The brief profile of Mr.  Mahajan is given below:
 
 Justice Mahajan (Retd.), M.A. LL.B. has practiced in Delhi High Court,
 Supreme Court, Subordinate Courts and other Tribunals in Delhi, apart
 from High Courts of Himachal Pradesh, Punjab and Haryana in Civil,
 Service and Company matters. He was appointed as an Additional Judge of
 the Delhi High Court and then became permanent Judge in July 1999.
 
 SUBSIDIARY COMPANIES
 
 The Company has four subsidiary Companies, viz. Simbhaoli Spirits
 Limited, Simbhaoli Power Private Limited, Integrated Casetech
 Consultants Private Limited, and Simbhaoli Global Commodities DMCC,
 Dubai.
 
 The consolidated financial statements presented by the Company include
 financial information of its subsidiary companies prepared in
 compliance with applicable accounting standards.  The Ministry of
 Corporate Affairs, Government of India has vide its general circular
 no. 2/2011 and 3/2011 dated February 8, 2011 and February 21, 2011
 respectively has granted general exemption from attaching the balance
 sheet of subsidiary company (s) with the balance sheet of the holding
 company after fulfilment of specified conditions thereon. The Company
 therefore, hereby confirms that the annual accounts of the subsidiary
 companies and the related detailed information will be made available
 to any investor at the corporate/registered office of the Company and
 that of the subsidiary company. A statement pursuant to Section 212 (8)
 of the Companies Act, 1956, is attached to the Accounts in this annual
 report.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 The Company is carrying Employee Stock Option Scheme, 2007 in
 compliance with the provisions of SEBI (Employee stock option scheme
 and employee stock purchase scheme) Guidelines, 1999 and the
 resolutions passed by the shareholders of the Company.
 
 Under Simbhaoli Sugars Limited - Employee Stock Option Scheme 2007, the
 Company has issued stock options convertible into equity shares of the
 Company in following manner:
 
 I.  81,300 stock options on May 18, 2009, at an exercise price of Rs.
 39/- per share.15,500 stock options have lapsed up to March 31, 2013.
 The remaining options have expired on May 17, 2013.
 
 II.  5,16,500 stock options on August 10, 2009, at an exercise price of
 Rs. 49/- per share. 74,730 stock options have lapsed up to March 31,
 2013.
 
 The details of stock options as on March 31, 2013 are given in Annexure
 A to the report.
 
 CORPORATE GOVERNANCE
 
 As per clause 49 of the listing agreement with the stock exchange, the
 report on corporate governance along-with certificate from the
 practicing company secretary and certificate from Chairman and Managing
 Director, Deputy Managing Director, Chief Executive Officer and Chief
 Financial Officer form part of this annual report.
 
 LISTING OF SECURITIES
 
 The equity shares of the Company are listed with Bombay Stock Exchange
 Limited and National Stock Exchange of India Limited.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 During the year, Foreign exchange aggregating to Rs 27.07 crore
 (previous year Rs. 176.49 crore) was earned by the Company against the
 export of sugar and alcohol. A sum of Rs. 90.50 crore (previous year
 Rs. 30.69 crore) inclusive of import of raw material was spent in
 foreign currency. Foreign currency loans aggregating to Rs 35.32 crore
 (USD 6.9 mn) have been repaid by the Company during the year.
 
 RESEARCH AND DEVELOPMENT
 
 The details relating to Research and Development activities carried out
 by the Company are stated in Form B of this Report as required under
 the Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988.
 
 CONSERVATION OF ENERGY
 
 Details of steps taken for conserving the energy are stated in Annexure
 to this report.
 
 PARTICULARS OF EMPLOYEES
 
 The details of the employees, who are being paid the remuneration, as
 required to be disclosed under section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended from time to time is given in the Annexure-B forming part of
 this report.
 
 AUDITORS
 
 The Auditors, M/s Deloitte Haskins & Sells, Chartered Accountants, New
 Delhi, retire at the ensuing annual general meeting of the Company and,
 being eligible, offer themselves for re-appointment. You are requested
 to re-appoint the Auditors for the financial year 2013-14 and fix their
 remuneration.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956 as amended, with respect to the Directors'' responsibility
 statement, it is hereby confirmed:
 
 (a) that in preparation of accounts for the financial year ended on
 March 31, 2013, the applicable accounting standards have been followed
 along-with proper explanation relating to the material departures.
 
 (b) that the directors of the Company have selected such accounting
 policies and applied them consistently and made judgments and estimates
 that are reasonable and prudent so as to give a true and fair view of
 the state of affairs of the Company as at March 31, 2013 and of the
 profits of the Company for the financial year ended on that date.
 
 (c) that the directors of the Company have taken proper and sufficient
 care for the maintenance of adequate accounting records in accordance
 with the provisions of the Companies Act, 1956 for safeguarding the
 assets of the Company and for preventing and detecting fraud and other
 irregularities, and
 
 (d) that the directors of the Company have prepared the accounts of the
 Company for the year ended on March 31, 2013, ongoing concern basis.
 
 CAUTIONARY STATEMENT
 
 Certain statements in the Report of the Directors and Management
 Discussion and Analysis with words or phrases such as will, should,
 etc., and similar expressions or variation of these expressions or
 those concerning our future prospects are forward looking statements.
 Such statements represent intention of the management and the efforts
 put in to realise certain goals. Actual results may differ materially
 from those suggested by the forward-looking statements due to a number
 of risks or uncertainties associated with the expectations. These risks
 and uncertainties include, but are not limited to, our ability to
 successfully implement our strategy and changes in government policies.
 The Company and its subsidiary/associated companies may, from time to
 time, make additional written and oral forward looking statements,
 including statements contained in the Company''s filings with the stock
 exchanges and our reports to the shareholders. The Company does not
 undertake to update any forward-looking statements that may be made
 from time to time by or on its behalf. Investors/stakeholders,
 therefore, are advised to make their own judgments before taking any
 investment, business decisions.
 
 ACKNOWLEDGEMENT
 
 The Board of Directors places on record their gratitude to all the
 lender banks and institutions for their continued assistance and
 guidance. The Directors acknowledge with gratitude the co-operation and
 assistance received from all executives, staff and workmen of the
 Company.
 
 The Directors also wish to emphatically state their gratitude to the
 Government of India, State Government of Uttar Pradesh and Indian Sugar
 Mills Association, farmers, suppliers and all other concerned persons
 who have continued their valuable support to your Company.
    
                                For and on behalf of the Board of
                                Directors 
 
                                Simbhaoli Sugars Limited
 
 New Delhi                      Gurmit Singh Mann
 
 May 28, 2013                   Chairman and Managing Director
Source : Dion Global Solutions Limited
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