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Directors Report of Gayatri Sugars Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting before you the 20th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015.

1. FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS:

The performance during the period ended 31st March, 2015 has been as under:

(Rupees in Lakhs)

Particulars 2014-15 2013-14

Gross Income 23836.06 20311.76

Profit /(Loss) Before Interest, (1552.74) 1144.18 Depreciation and Exceptional Item

Finance Charges 2173.41 2168.95

Gross Profit/(Loss) before Depreciationa (3276.15) (1024.77) and Exceptional Item

Provision for Depreciation 1149.40 1262.53

Net Profit (Loss) Before Tax and (4875.55) (2287.30) Exceptional Item

Exceptional Item 1362.16 -

Provision for Tax - -

Net Profit/(Loss) After Tax (6237.71) (2287.30)

Balance of Profit/(Loss) brought forward (6062.02) (3774.72)

Balance available for appropriation (12299.73) (6062.02)

Proposed Dividend on Equity Shares - -

Tax on proposed Dividend - -

Transfer to General Reserve - -

Surplus carried to Balance Sheet (12299.73) (6062.02)

REVIEW OF OPERATIONS:

Performance during the financial year 2014-15

Your Directors are pleased to report that during the year under review, the Company crushed 7.14 Lakh Tonnes of Sugar cane and 7.91 Lakh Quintals of Sugar was produced with an average recovery of 11.07%.

The Company registered a gross turnover of Rs. 23,836 Lakhs for the year ended 31st March, 2015 against Rs. 20,312 Lakhs for the year ended 31st March, 2014. The growth of 17.35% in gross turnover was mainly due to high sale volume of sugar. The Company incurred loss of Rs. 1552.74 before Interest, Depreciation and Exceptional Item due to fall down of lsugar price for the year 2014-15 compaared to the loss of Rs. 1144.18 Lakhs for the year 2013-14 and net loss of Rs. 6237.71 Lakhs compared to the loss of Rs. 2287.30 Lakhs.

Prospects for the financial year 2015-16:

The excess inventory of sugar over the demand will lead to further decline in Sugar selling prices leading to erosion of viability of Sugar business.

Recently, the Central Government announced measures as under which will encourage the Sugar Industry to get better prices for Ethanol.

(i) Export incentive of Rs. 4,000 per Tone to encourage export of Raw Sugar from the Country.

(ii) Replaced the policy of procurement of Ethanol by Oil producing Companies from Tender method to fixed price.

(iii) Removal of 12.5% Excise Duty on Ethanol from crushing season 2015-16.

2. RESERVES:

Due to inadequate profits, no amount has been transferred to Reserves.

3. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

Under the Scheme of Amalgamation between GSR Sugars Private Limited and Gayatri Sugars Limited, the Company had allotted 66,10,210 6% Cumulative optionally convertible Preference Shares of Rs.10/- each and the same were due for redemption on April 1,2015. The company has approached the members to vary the terms of 66,10,210 6% cumulative optionally convertible Preference shares and accordingly the Preference shareholders have approved the waiver of arrears of preference dividend on 66,10,210 6% cumulative optionally convertible Preference shares of Rs.10/- each till 01.04.2015 and changed the nomenclature of 66,10,210 6% cumulative optionally convertible Preference shares to 6% 66,10,210 cumulative redeemable Preference shares.

4. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During the period under review and the date of Board's Report there was no change in the nature of Business.

5. DIVIDEND:

As the Company incurred losses during the year under review, the Directors could not recommend dividend on Preference Shares and also on Equity Shares.

6. UN PAID / UN CLAIMED DIVIDEND:

There is no Un paid / Un claimed Dividend.

7. BOARD MEETINGS:

The Board of Directors duly met 5 (five) times on 26.05.2014, 11.08.2014, 12.11.2014, 13.02.2015 and 27.03.2015 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

8. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

During the year under review, the Company has appointed Mr. J.N. Karamchetti as Independent Director for term of 5 years (first term) and Mr. T.R. Rajagopalan and Mr. S. Venkata Swamy for a term of 5 years (Second term) by way of special resolution as per the provisions of Section 149 of the Companies Act, 2013.

Mr. P Maruthi Babu has resigned from the post of Director of the Company w.e.f. 11.08.2014.

Pursuant to the provisions of section 152 of the Companies Act, 2013 and in accordance with the provisions of Articles of Association of the Company, Sri. T.V. Sandeep Kumar Reddy (DIN: 00005573), Director of the Company, is liable to retire by rotation and being eligible, offers himself for re-appointment.

Mr. B. Sankara Rao has resigned from the post of Compliance officer of the Company w.e.f 20.07.2015 and consequently Ms. Munmun Baid was appointed as Company Secretary cum Compliance Officer of the Company.

9. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received a declaration from Sri. S Venkata Swamy, Sri. T R Rajagopalan and Sri. J N Karamchetti, Independent directors of the company to the effect that they are meeting the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013.

10. COMMITTEES OF BOARD

Pursuant to requirement under Companies Act, 2013 and Listing Agreement, the Board of Directors has constituted various committees of Board such as Audit Committee, Nomination and Remuneration Committee, Risk Management Committee and Stakeholders Relationship Committee. The details of Composition and terms of reference of these committees are mentioned in the Corporate Governance Report.

11. VIGIL MECHANISM:

Vigil Mechanism Policy has been established by the Company for directors and employees to report instances of unethical behaviour, actual or suspected, fraud or violation of Company's code of conduct or ethics policy, and genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company.

12. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has constituted a committee known as "Internal Complaints Committee" to protect the women employees from sexual harassment, with the following members:

1. Mrs. Sarita Reddy, Executive Director as Presiding Officer.

2. V.R. Prasad, Chief Financial Officer, Member

3. S.Murali Krishna, Purchase Manager, Member

4. Leena Joseph Member, NGO

During the year under review, there were no cases filed pursuant to the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

13. DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:

There are no Companies which have become or ceased to be its Subsidiaries, Joint Venture or Associate Companies during the year.

15. EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is provided as Annexure- I.

16. STATUTORY AUDITORS:

M/s Deloitte Haskins & Sells (Firm's Registration No. 008072S) Statutory Auditors of the company retire at the ensuing annual general meeting and are eligible for reappointment. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has received a written consent from the auditors to their re-appointment and a certificate to the effect that their re-appointment, if made, would be in accordance with the Companies Act, 2013 and the rules framed there under and that they have satisfied the criteria provided in Section 141 of the Companies Act, 2013.

The Board recommends the re-appointment of M/s Deloitte Haskins & Sells, as the statutory auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting.

17. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 134(3)(f) & Section 204 of the Companies Act, 2013, Secretarial audit report as provided by Mr. Y. Koteswara Rao Practicing Company Secretary is annexed to this Report as Annexure -II.

18. QUALIFICATIONS IN AUDIT REPORTS:

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made—

(a) Explanation Regarding Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditor's Report on the Financial Statements for the year ended March 31, 2015 and has noted that the same does not have any reservation, qualification or adverse remarks.

(b) Explanation Regarding Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report on the Compliances according to the provisons of section 204 of the Companies Act 2013, and the same does not have any reservation, qualifications or adverse remarks.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The required information as per Sec. 134 (3) (m) of the Companies Act 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014 is provided hereunder:

A. Conservation of Energy:

i. ) The steps taken or impact on conservation of energy:

ii. ) Step taken by the Company for utilizing alternate source of energy:

Condensate juice heaters were modified for heating of raw juice by passing through hot water into condensate heaters.

iii. ) Capital investment on energy conservation equipments:

During the year, there was no investment on energy conservation equipment.

B. Technology Absorption:

i. ) Efforts made towards Technology Absorption:

1. Installation of fan less cooling towers.

2. Installation of automation for mill and boiler F.D. Fans.

ii. ) The benefit derived like product improvement, cost reduction, product development or import substitution, etc.

Cost reduction of around Rs. 25 Lakhs out of above.

iii. ) Details of Technology imported during the last 3 years reckoned from the beginning of the financial year:

During the period of last three years, there was no import of Technology.

iv) Expenditure incurred on Research & Development:

There was no expenditure incurred on Research and Development.

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings : NIL

Foreign Exchange Outgo : NIL

20. DETAILS RELATING TO DEPOSITS, COVERING THE FOLLOWING:

Your Company has not accepted any deposits falling within the meaning of Sec. 73, 74 & 76 of the Companies Act, 2013 read with the Rule 8(V) of Companies (Accounts) Rules 2014, during the financial year under review.

21. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

i) . Demand of Rs.1,38,81,669/- was raised by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad-1 Commissionarate, being the amount equal to 10% or 5% of the value of Exempted goods i.e Electricity sold by the company for the period Nov-2006 to Dec-2010 in the case of Kamareddy Unit and for the period Mar- 2006 to Mar-2012 in the case of Nizamsagar Unit.

Electricity is not an exempted product and as such the provision of rule 6(1), 6(2) and 6(3) of CCR 2004 are not applicable. The CENVAT credit availed on common inputs and utilised in the production of Electricity is required to be reversed to the extent of such inputs / input services utilised in generation of Electricity. Since the company reversed the CENVAT credit to the extent of such value utilised in electricity generation, the demand under rule 6(1), 6(2) & 6(3) of the CCR, 2004 is not sustainable in law in the light of the judicial decisions by various h'ble tribunals.

The requirement of pre deposit of the balance dues is waived and stay against recovery is granted during the pendency of the appeal by the Customs, Excise & Service Tax Appellate Tribunal (CEASTAT), Bangalore.

ii) A demand for Rs. 22,14,159/- for Financial Year 2011-12 & 2012-13 was raised by the Commercial Tax Officer (Audit), Secunderabad Division, Hyderabad, being ITC restrictions on Coal & VAT payable on Harvesting Machine receipts.

Steam coal was used for generation power which was used for manufacturing of Distillery Products and eligible for availment of input tax credit. As sugar cane is not liable for tax as per entry 50 of Sch-1 of APVAT Act, 2005 the activity of harvesting of sugar cane is not liable to tax.

Stay order was granted for 50% of the disputed tax till the disposal of the case and balance 50 % was paid on 26.03.2014.

22. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company's internal control system is aimed at proper utilisation and safeguarding of the Company's resources and promoting operational efficiency. The internal audit process reviews the in-system checks, covering significant operational areas regularly.

The Company's Audit Committee is responsible for reviewing the Audit Report submitted by the Internal Auditors. Suggestions for improvements are considered and the Audit Committee follows up on the implementation of corrective actions. The Audit Committee also invites the Statutory and Internal Auditors for regular meetings to ascertain their views on the adequacy of internal control systems and keeps the Board of Directors informed of its observations from time to time.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

LOANS:

The Company has not given any loans during the year under review.

GUARANTEES:

During the year company has extended the following guarantees:

SNo. Name of the Entity Details

1. Syndicate Bank Corporate Guarantee for Rs.11.50 Crs on behalf of the cane suppliersfor the credit facility extended to the cane suppliers by Syndicate Bank.

2. Jain Irrigation Systems Pvt Ltd. Corporate Guarantee for Rs.0.50 Crs on behalf of the cane suppliers for the purchase of PVC Pipes and Drip Irrigation Equipment by cane suppliers.

3. Netafim Irrigation India Pvt Ltd.Corporate Guarantee for Rs.0.25 Crs on behalf of the cane suppliers for the purchase of PVC Pipes and Drip Irrigation Equipment by cane suppliers.

4. EPC Industries Ltd. Corporate Guarantee for Rs.0.10 Crs on behalf of the cane suppliers for the purchase of PVC Pipes and Drip Irrigation Equipment by cane suppliers.

5. Union Bank of India Corporate Guarantee for Rs.20.00 Crs on behalfof the cane suppliers for the credit facility extended to the cane suppliers by Union Bank of India.

INVESTMENTS:

The Company has not made any investments during the period under review.

25. STATUTORY COMPLIANCE:

The Company has complied with the required provisions relating to statutory compliance with regard to the affairs of the Company in all respects.

26. RISK MANAGEMENT POLICY:

Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk

27. CORPORATE SOCIAL RESPONSIBILTY POLICY:

Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy but the Company is involved in some of the social activities like organizing health camps, providing drinking water facility and fumigation in the nearby villages of the factories.

28. RELATED PARTY TRANSACTIONS:

Your Company has formulated a policy on related party transactions which has been placed on the website of the company i.e. www.gayatrisugars.com

The details of Related Party Transactions are annexed in Form AOC-2 as Annexure -III.

29. FORMAL ANNUAL EVALUATION:

As per section 149 of the Companies Act, 2013 read with clause VII (1) of the schedule IV and rules made there under, the independent directors of the company had a meeting on 13.02.2015 without attendance of non-independent directors and members of management. In the meeting the following matters were taken up:

(a) Review of the performance of non-independent directors and the Board as a whole;

(b) Review of the performance of the Chairperson of the company, taking into account the views of Executive directors and Non-Executive Directors;

(c) Assessing the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The meeting also reviewed and evaluated the performance of non-independent directors. The Company has 3 (three) non-independent directors namely: i.) Smt. T. Indira Subbarami Reddy - Director ii.) Smt. T. Sarita Reddy - Whole-Time Director iii.) Sri. T. V. Sandeep Kumar Reddy - Director. The meeting recognized the significant contribution made by the non- independent directors.

The meeting also reviewed and evaluated the performance of the Board as whole in terms of the following aspects:

* Preparedness for Board/Committee meetings.

* Attendance at the Board/Committee meetings.

* Monitoring the effectiveness of the company's governance practices.

* Ensuring a transparent board nomination process with the diversity of experience, knowledge, perspective in the Board.

* Ensuring the integrity of the company's accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for financial and operational control and compliance with the law and relevant standards.

Evaluation by Board:

The Board has carried out the annual performance evaluation of its own performance, the Directors individually (excluding the director being evaluated) as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, effectiveness in developing Corporate governance structure to fulfill its responsibilities, execution and performance of specific duties etc. The Board decided that the performance of individual directors, its own performance and working of the committees is excellent.

30. DISCLOSURE ABOUT COST AUDIT:

As per section 148 of the Companies Act, 2013 and rule 14 of the Companies (Audit and Auditors) Rules, 2014, Company requires to appoint a Cost Auditors. The Board of directors and the Audit Committee of the Board has approved the appointment of M/s Narasimha Murthy & Co., as Cost Auditor to audit the cost records of Sugar, Power and Distillery division of the Company for the financial year 2015-16 the same has been proposed to the shareholders for approval.

31. RATIO OF REMUNERATION TO EACH DIRECTOR:

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

S. Name Designation Remuneration Remuneration No paid paid FY2014-15 FY2013-14 Rs. lakhs Rs. lakhs

1 T.Sarita Reddy Executive 36,99,000/- 36,99,000/- Director

2 V.R.Prasad Chief Financial 14,79,200/- 13,76,700/- Officer

S. Name Increase in Ratio/Times No remuneration per Median from of employee previousyear remuneration Rs. lakhs

1 T.Sarita Reddy - 3.10%

2 V.R.Prasad 1,02,500/- 1.24%

None of the employees is drawing Rs. 5,00,000/- and above per month or Rs.60,00,000/- and above in aggregate per annum, the limits prescribed under Section 197(12) of the Companies Act, 2013.

32. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to Bombay Stock Exchange where the Company's Shares are listed.

33. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

As required by clause 49 of the listing agreement with the Stock Exchange, a detailed Corporate Governance Report is presented in a separate section forming part of the this report as Annexure -IV.

34. EMPLOYEE RELATIONS:

Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company.

35. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of Business Constituents, Banks and other Financial Institutions and Shareholders of the Company like for their continued support for the growth of the Company.

For and on behalf of the Board

T. Sarita Reddy T.V. Sandeep Kumar Reddy Executive Director Vice Chairman

V R Prasad Munmun Baid

Chief Financial Officer Company Secretary & Compliance Officer

Place: Hyderabad Date : 14th August, 2015












Mar 31, 2014

Dear Members,

The Directors are pleased to present the Nineteenth Annual Report of your company along with the Audited Accounts for the year ended 31st March 2014.

FINANCIAL RESULTS

(Rs in lakhs )

Description 2013-14 2012-13

Revenue (Net of Excise Duty & VAT) 19,705.18 18,688.89

(Increase)/Decrease in stocks (5,168.56) (1,582.96)

Profit/(Loss) before depreciation and interest 1,144.18 2,284.86

Finance Charges 2,168.95 2,345.33

Depreciation 1,262.53 1,291.45

Profit/(Loss) before tax (2,287.30) (1,351.92)

Provision for tax Nil Nil

Profit/(Loss) after tax (2,287.30) (1,351.92)



REVIEW OF OPERATIONS

Performance during the financial year 2013-14

Your Directors are pleased to report that during the year under review, the crushing operations for the crushing season 2013-14 were started by Kamareddy Unit on 24th November 2013 (previous year on 18th November 2012) and closed the operations on 6th April, 2014 (previous year on 4th March, 2013). The operations at Nizamsagar Unit started on 19th November 2013 (previous year on 9th November 2012) and closed on 8th April, 2014 (previous year on 11th March, 2013).

During the Crushing Season 2013-14 (up to 8th April, 2014) the company crushed 3.77 Lakh Tones of Sugar Cane (Previous Season 3.10 Lakh Tones) and produced sugar of 4.21 Lakhs Quintals (Previous Season 3.36 Lakh Quintals) with an Average Recovery of 11.13% (Previous Season 10.83%) at Kamareddy Unit and has crushed 3.20 Lakhs Tones (Previous Season 2.73 Lakh Tones) of Sugar Cane and produced sugar of 3.37 Lakhs Quintals (Previous Season 2.86 Lakh Quintals) at the Nizamsagar Unit. Both Units put together, 6.97 Lakh Tones of Sugar Cane was crushed and produced Sugar of 7.58 Lakhs Quintals with an average recovery of 10.92% comparing to the previous season figures of 5.83 Lakh Tones of Sugar Cane and Sugar of 6.22 Lakhs Quintals with an average recovery of 10.66%.

During the Financial Year, the Distillery unit produced Rectified Spirit (RS) of 70.47 Lakh Liters and Impure Spirit (IS) of 2.71 Lakh Liters, totally 73.18 lakh Liters compared to the previous year of Extra Neutral Alcohol (ENA) of 8.74 Lakhs Liters, Rectified Spirit (RS) of 41.52 Lakh Liters and Impure Spirit (IS) 2.36 Lakhs Liters totally 52.63 lakh liters.

The Export of Power during the crushing season 2013-14 was to the extent of 212.5 Lakh kwh (Kamareddy Unit 54.67 Lakh kwh & Nizamsagar Unit 160.32 lakh kwh) as compared to the previous year season of 212.49 lakh kwh (Kamareddy Unit- 74.26 Lakh kwh & Nizamsagar Unit- 138.23Lakh kwh).

Prospects for the financial year 2014-15

The Company is estimating to crush quantity of around 7.25 lakh Tones of sugar cane during the current Financial Year 2014-15 compared to the previous year crushing of 6.97 lakh Tones. The production of Rectified Spirit is expecting 90 lakh Liters during the Current Financial Year 2014-15 compared to the previous year production of 73.18 lakh Liters.

DIVIDEND ON PREFERENCE SHARES

As the company incurred losses during the year under review, the Directors could not recommend dividend on 6% Cumulative Redeemable Preference Shares.

LISTING OF SECURITIES

The company''s shares are listed with Bombay Stock Exchange Ltd., Mumbai and the annual listing fee for the year 2014-15 has been paid to the Bombay Stock Exchange Ltd., at Mumbai.

DIRECTORS

Smt. T. Indira Subbarami Reddy and Sri. TR Rajagoplan will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

PARTICULARS OF EMPLOYEES

None of the employees of the company are drawing remuneration in excess of the limits mentioned under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended. Accordingly, no disclosure is made.

AUDITORS OF COMPANY

The Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Secunderabad will retire at the conclusion of the ensuing Annual General Meeting as the Statutory Auditors of the company. They have confirmed their eligibility for reappointment pursuant to provisions of the Companies Act, 2013. Accordingly, your company proposes to appoint M/s. Deloitte Haskins & Sells as auditors of company till the conclusion of the next Annual General Meeting of the Company.

COST AUDIT

As per Section 148 of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, Company requires to appoint Cost Auditors. The Board of Directors and the Audit Committee of the Board has approved the appointment of M/s. Narasimha Murthy & Co., as Cost Auditors to audit the cost records of Sugar, Power and Distillery divisions of the Company for the financial year 2014-15 the same has been proposed to the shareholders for approval.

CONSERVATION OF ENERGY, ETC

Information relating to Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on Corporate Governance and a certificate from the Practicing Chartered Accountant is given in the Annexure – B and Annexure–C respectively and form part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 your director''s state:

1. That in preparation of the Annual Accounts the applicable Accounting Standards have been followed by the company, except for the qualification by the statutory auditors in their report.

2. That your directors 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 31.03.2014 and of the profit or loss of the company for the year ended on that date;

3. That your directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. That your Directors have prepared annual accounts on a going concern basis.

AUDITORS'' OBSERVATIONS

Management Response to Auditors Qualifications:

The response of the Directors to the Comments of the Auditors in their report on Financial Statement is as under:

The Bankers of the company claimed the Right of Recompense (ROR) amounting to Rs 840.00 lakhs on expiry of CDR time period. The company paid an amount of Rs 84.00 lakhs against the claim. Subsequently the Member Banks of the Consortium Andhra Bank, Bank of Baroda and State Bank of India agreed to extend the time till 31.03.2015, hence no provision was considered necessary.

INDUSTRIAL RELATIONS

The Industrial Relations continued to be peaceful during the year.

ACKNOWLEDGEMENTS

The Board of Directors would like to place on record their appreciation of the assistance and guidance extended by the Financial Institutions/Banks viz, Andhra Bank, Union Bank of India, Bank of Baroda, State Bank of India, Punjab National Bank, CDR Cell and Sugar Development Fund. Your Directors express their gratitude to the shareholders for the confidence reposed in the management. Your Directors also place on record their sincere appreciation of the total commitment and hard work put in by all the employees of the company.

For and on behalf of the Board

Place: Hyderabad (T. SARITA REDDY) (T.V. SANDEEP KUMAR REDDY) Date: May 26, 2014 Executive Director Vice-Chairman


Mar 31, 2013

Dear Members,

The Directors are pleased to present the Eighteenth Annual Report of your company along with the Audited Accounts for the year ended 31st March 2013.

FINANCIAL RESULTS

(Rs in lakhs)

Description 2012-13 2011-12

Revenue (Net of Excise Duty & Sales Tax) 18688.89 21891.44

(Increase)/Decrease in stocks (1582.96) 3581.65

Profit/(Loss) before depreciation and interest 2284.90 2180.83

Finance Charges (Interest) 2345.33 2395.91

Depreciation 1291.45 1259.89

Profit/(Loss) before tax (1351.88) (1474.97)

Provision for tax __ __

Profit/(Loss) after tax (1351.88) (1474.97)



REVIEW OF OPERATIONS

Performance during the financial year 2012-13

Your Directors are pleased to report that during the year under review, the company''s crushing operations for the season 2012-13 has commenced on 18th November 2012 and closed on 04th March 2013 for the Kamreddy Unit and has commenced on 09th November 2012 and closed on 11th March 2013 for the Nizamsagar Unit. During the year, company has crushed 3.10 Lakh Tonnes of sugar cane and produced sugar of 3.36 Lakhs quintals with an average recovery of 10.83% at Kamareddy Unit and has crushed 2.73 Lakh Tonnes of sugar cane and produced sugar of 2.85 lakh quintals with an average recovery of 10.48% at Nizamsagar Unit.

During the year, the Distillery Unit has produced 52.63 Lakh Litres of Rectified Spirit (RS)/Extra Neutral Alcohol (ENA). Company has sold 44.47 Lakh Litres of RS/ENA with an average realization of Rs.25.22 per litre.

During the year, the Co-Gen power plants exported 212.49 lakh KWH (Kammareddy Unit 74.26 lakh KWH and Nizamsagar Unit 138.23 lakh KWH) as compared to the previous year of 204.05 lakh KWH (Kammareddy Unit 67.98 lakh KWH and Nizamsagar Unit 136.07 lakh KWH).

Prospects for the financial year 2013-14

The Company is estimating to crush around 7.00 lakhs tonnes quantity of Sugar Cane during the Current Financial year 2013-14, compared to the previous year crushing of 5.62 lakh Tonnes. The production of Rectified Spirit is expecting 75 lakh liters during the Current Financial year 2013-14, compared to the previous year production of 52.63 lakh liters.

SICKNESS OF THE COMPANY:

As per Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 ("the Act"), the net worth of the company eroded fifty percent or more of its peak net worth during the immediately preceding four financial years. Boards of Directors of the company have formed this opinion based on the audited financial statements as approved by the Board of Directors on 27th May, 2013. Same will be reported to the Board for Industrial and Financial Reconstruction (BIFR).

The factor leading to such sickness and the steps proposed to be taken will be forwarded to the members along with the notice of Annual General Meeting.

DIVIDEND ON PREFERENCE SHARES

As the company incurred losses during the year under review, the Directors could not recommend dividend on 6% Cumulative Redeemable Preference Shares.

LISTING OF SECURITIES

The company''s shares are listed with Bombay Stock Exchange Ltd., Mumbai and the annual listing fee for the year 2013-14 has been paid to the Bombay Stock Exchange Ltd. at Mumbai.

DIRECTORS

Sri.T. V.Sandeep Kumar Reddy and Sri. S.Venkata Swamy will retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

PARTICULARS OF EMPLOYEES

No employee in the company is drawing the remuneration in excess of the limits mentioned under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

AUDITORS

The Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Secunderabad will retire at the conclusion of the ensuing Annual General Meeting as the Statutory Auditors of the company. They have signified their willingness to accept reappointment and have further confirmed their eligibility under Section 224 (1-B) of the Companies Act, 1956.

COST AUDIT

The Central Government pursuant to Section 233 B of the Companies Act, 1956 has ordered that the company carries out an audit of cost accounts relating to sugar, electricity and distellary divisions of the company every year. M/s. Narasimha Murthy & Co, Cost Accountants continued as Cost Auditors of the Company for the year 2013-14. The Cost Audit Report shall be submitted to the Central Government with in the stipulated period.

CONSERVATION OF ENERGY, ETC

Information relating to Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on Corporate Governance and a certificate from the Practicing Chartered Accountant is given in the Annexure - B and Annexure-C respectively and form part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 your director''s state:

1. That in preparation of the Annual Accounts the applicable Accounting Standards have been followed by the company, except for the qualification & matter of attention by the statutory auditors in their report.

2. That your directors 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 31.03.2013 and of the profit or loss of the company for the year ended on that date;

3. That your directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. That your Directors have prepared annual accounts on a going concern basis.

AUDITORS'' OBSERVATIONS

Management Opinion / View on Auditors Observation:

The opinion / view of the Directors to the Comments of the Auditors in their report on Financial Statement is as under:

The Bankers of the company claimed the Right of Recompense (ROR) amounting to Rs 840.00 lakhs. During the quarter ended June, 2012, the company made a provision of Rs 798.00 lakhs against the Right of Recompense (ROR) claim by the Banks. The company paid an amount of Rs 84.00 lakhs against the claim. As the company is pursuing the matter with Banks for waiver of balance amount of RS 756.00 lakhs, the same was reversed during the quarter ended March, 2013.

INDUSTRIAL RELATIONS

The Industrial Relations continued to be peaceful during the year.

ACKNOWLEDGEMENTS

The Board of Directors would like to place on record their appreciation of the assistance and guidance extended by the Financial Institutions/Banks viz, Andhra Bank, Union Bank of India, Indian Overseas Bank, State Bank of India, Bank of Baroda, Punjab National Bank and CDR cell, Yes Bank and Sugar Development Fund. Your Directors express their gratitude to the shareholders for the confidence reposed in the management. Your Directors also place on record their sincere appreciation of the total commitment and hard work put in by all the employees of the company.



For and on behalf of the Board

For GAYATRI SUGARS LIMITED

Place: Hyderabad (T.V. SANDEEP KUMAR REDDY) (T. SARITA REDDY)

Date: May 27, 2013 Vice-Chairman Executive Director


Mar 31, 2010

The Directors are pleased to present the Fifteenth Annual Report of your company along with the Audited Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS (Rs in lacs)

Description 2009-10 2008-09

Revenue (Net of Excise 6105.88 7379.14 Duty & Sales Tax)

IncreaseADecrease) (805.09) (1323.25) in stocks

Profit/(Loss) before depreciation and interest 1080.51 818.80

Finance Charges (Interest) 1010.07 1083.47

Depreciation 589.87 757.76

Profit/(Loss) before tax (519.43) (1022.43)

Non-Recurring Expenses - Provision for doubtful debts - (376.40)

Provision for tax - 7.77

Profit/(Loss) after tax (519.43) (1406.60)

REVIEW OF OPERATIONS

Performance during the financial year 2009-10

Your-Directors are pleased to report that during the year under review, the companys crushing operations for the season 2009-10 has commenced on 27th November 2009 and closed the operations on 15lh February 2010. During the year, company has crushed 1.07 Lakh Tonnes of sugar cane with an average recovery of 10.22%.

During the year the Distillery Unit has produced 36.57 Lakh Litres of Rectified Spirit (RS)/Extra Neutral Alcohol (ENA). Company has sold 38.84 Lakh Litres of RS/ENA with an average realization of Rs.31.23 per litre.

Prospects for the financial year 2010-11

The Company is estimating to crush higher quantity of 3.00 lakh tones of sugar cane during the current year on account of better availability of the sugar cane. The Company is estimating to produce RS/ ENA around 84 Lakh litres during the current accounting year.

DIVIDEND ON PREFERENCE SHARES

As the company incurred losses during the year under review, the Directors have not recommend any dividend of 6% on Cumulative Redeemable Preference Shares.

LISTING OF SECURITIES

The companys shares are listed with Bombay Stock Exchange, Mumbai and the annual listing fee for the year 2010-11 has been paid to the Bombay Stock Exchange at Mumbai.

DIRECTORS

During the year under review Sri P Maruthi Babu has been appointed as Additional Director of your company and will retire by rotation at the forthcoming Annual General Meeting. A Notice from shareholder proposing his appointment as Director of the company has been received together with the requisite deposit of Rs. 500 and is proposed for appointment.

Sri T R Rajagopaian and Sri S Venkataswamy will retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment.

The Nomination of Sri Abhay Soi has been withdrawn by the Rajasthan Leasing Private Limited w.e.f. 15.4.2010 on account of redemption of the Non-Convertible Debentures on 31.03.2010 and the board has appreciated the services of Sri Abhay Soi during his tenure as director.

Sri TV Sandeep Kumar Reddy has resigned as Managing Director w.e.f.20.04.2010, but he will continue to be as Vice Chairman of the Company.

Dr. AK Bhattacharya has resigned as director w.e.f. 29.05.2010, due to his pre-occupation. The Board places on record the appreciation of the valuable services rendered Dr. AK Bhattacharya during his tenure as Director of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

PARTICULARS OF EMPLOYEES

There are no employee in the company who are drawing prescribed salary under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

AUDITORS

The Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Secunderabad will retire at the conclusion of the ensuing Annual General Meeting as the Statutory Auditors of the company. They have signified their willingness to accept reappointment and have further confirmed their eligibility under Section 224 ("1 -B) of the Companies Act, 1956.

COST AUDIT

The Central Government pursuant to Section 233 B of the Companies Act, 1956 has ordered that the company carries out an audit of cost accounts relating to sugar every year. M/s. K Narasimha Murthy & Co, Cost Accountants was appointed as Cost Auditor of the company for the year 2010-11.

CONSERVATION OF ENERGY, ETC

Information relating to Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on Corporate Governance and a certificate from the Company Secretary in practice is given in the Annexure - B and Annexure-C respectively, which forms part of this report.

AMALGAMATION

At the meeting of the directors held on 20.04.2010, your directors have approved the amalgamation of the M/s GSR Sugars Private Limited (group company) with the company for consolidation of the business and for future growth of the company. The appointed date for amalgamation is 01.04.2010. The Company has initiated the process and applied to Bombay Stock Exchange for their No Objection for amalgamation of the companies and in a month time the company proposes to file the applications with the Honble High court of Andhra Pradesh.

INTIMATION TO BIFR

As at 31.03.2009, the accumulated losses has resulted in erosion of more than 50% of the net worth of the company and the company has become potentially sick company under the Sick Industrial Companies (Special Provisions) Act, 1985. Company had intimated to the Board for Industrial and Financial Reconstruction (BIFR) on 22.09.2009 the potential sickness of the company.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 your directors state:

1. That in preparation of the Annual Accounts the applicable Accounting Standards have been followed by the company;

2. That your directors 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 31.03.2010 and of the profit or loss of the company for the year ended on that date;

3. That your directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. That your Directors have prepared annual accounts on a going concern basis.

INDUSTRIAL RELATIONS

The Industrial Relations continued to be peaceful during the year.

ACKNOWLEDGEMENTS

The Board of Directors would like to place on record their appreciation of the assistance and guidance extended by the Financial Institutions/Banks viz, YES BANK Limited, IOB, CDR cell, SBI, BOB, AB and PNB. Your Directors express their gratitude to the shareholders for the confidence reposed in the management. Your Directors also place on record their sincere appreciation of the total commitment and hard work put in by all the employees of the company.

For and on behalf of the Board T Indira Subbarami Reddy Chairperson Place :Hyderabad Date :29 th May 2010

 
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