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Notes to Accounts of Sakthi Sugars Ltd.

Mar 31, 2014

1. The loans under 1 & 4 above are further secured by pledge of shares held by promoters in the Company.

2. Guarantees given by Directors:

a) Working capital loans amounting to Rs.5752.84 lakhs (Rs.5597.19 lakhs) are guaranteed by Dr. N.Mahalingam, Dr. M.Manickam, Sri.M.Balasubramaniam and Sri. M.Srinivaasan.

b) Working capital loan amounting to Rs.889.25 lakhs (Rs.801.21 lakhs) is guaranteed by Dr. N.Mahalingam, and Dr. M.Manickam.

c) Working capital loan amounting to Rs.1495.65 lakhs (Nil) is guaranteed by Dr. M.Manickam.

d) Working capital loans amounting to Rs.752.08 lakhs (Nil) are guaranteed by Sri.M.Balasubramaniam and Sri. M.Srinivaasan.

NATURE OF SECURITYFOR SHORT TERM BORROWINGS

A) SECURED LOANS FROM BANKS

1 Working capital loans amounting to Rs.5144.31 lakhs (Rs.4415.10 lakhs) are secured by

a) Pari passu first charge by way of hypothecation of the current assets of the Company, except TNEB receivables.

b) Pari passu second charge on the entire movable and immovable properties of the Company, except Sugar and Co generation Units in Sivaganga and Modakuruchi and other exclusively charged assets.

2 Working capital loan amounting to Rs.1495.65 lakhs (Nil) is secured by

a) Pari passu first charge by way of hypothecation of the current assets of the Company, except TNEB receivables.

b) Pari passu second charge on the entire movable and immovable properties of the Company, except Sugar and Co-generation Units in Sivaganga and Modakuruchi and other exclusively charged assets.

c) Additionally secured by exclusive first charge on the Coke Bottling Plant at Sivaganga Unit.

3 Term Loan amounting to Rs.400 lakhs (Nil) is secured by receivables from TNEB against supply of power from co-generation plant at Sakthinagar.

4 Working capital loan (Bills Discounting facility) amounting to Rs.608.53 lakhs (Rs.1182.09 lakhs) is secured by

a) Pari passu first charge by way of hypothecation of the current assets of the Company, except TNEB receivables.

b) First charge on the TNEB receivables of Cogen Unit at Sivaganga.

c) Pari passu second charge on the entire movable and immovable properties of the Company, except Sugar and Co-generation Units in Sivaganga and Modakuruchi and other exclusively charged assets.

5 Working capital loan (Bills Discounting facility) amounting to Rs.352.07 lakhs (Nil) is secured by receivables from TNEB against supply of power from co-generation plant at Sakthinagar. 6 Working capital loan amounting to Rs.889.25 lakhs (Rs. 801.21 lakhs) is secured by

a) Pari passu first charge on the current assets of sugar division (except Modakuruchi), distillery and soya units.

b) Pari passu second charge on immovable and movable assets of the Company''s Sakthinagar Distillery Unit, Dhenkanal Sugar and Distillery Units and Soya Unit.

7 The loans under 1 & 4 above are further secured by pledge of shares held by promoters in the Company.

8 Guarantees given by Directors:

a) Working capital loans amounting to Rs.5752.84 lakhs (Rs.5597.19 lakhs) are guaranteed by Dr. N.Mahalingam, Dr. M.Manickam, Sri.M.Balasubramaniam and Sri. M.Srinivaasan.

b) Working capital loan amounting to Rs.889.25 lakhs (Rs.801.21 lakhs) is guaranteed by Dr. N.Mahalingam, and Dr. M.Manickam.

c) Working capital loan amounting to Rs.1495.65 lakhs (Nil) is guaranteed by Dr. M.Manickam.

d) Working capital loans amounting to Rs.752.08 lakhs (Nil) are guaranteed by Sri.M.Balasubramaniam and Sri. M.Srinivaasan.

B) SECURED LOANS FROM OTHER PARTIES

1 Bills Finance facilities amounting to Nil (Rs.1856.46 lakhs) are secured by

a) Receivables from TNEB against supply of power from co-generation plants at Sakthinagar and Modakuruchi.

b) Exclusive first charge on the fixed assets pertaining to Co-generation Plant at Sakthinagar.

2 Guarantees given by Directors:

Short term borrowing amounting to Nil (Rs.1856.46 lakhs) is guaranteed by Dr. M.Manickam, Sri.M.Balasubramaniam and Sri.M.Srinivaasan

3. Contingent liabilities: (Rs. in lakhs)

Particulars 31.03.2014 31.03.2013

A) Claims against the Company not acknowledged as debts:

(i) Income tax matters 6349.34 6590.29

(ii) Purchase tax/sales tax matters 2484.29 2296.58

(iii) Corporate Guarantee given to foreign subsidiaries

(a) Guarantee amount 33030.60 27817.52

(b) Outstanding amount 35031.34 28838.95

(iv) Others 7823.04 7659.51

B) Guarantees issued by bankers 239.01 83.00

C) Corporate guarantee given for loans to Indian subsidiaries

(i) Guarantee amount 12603.49 18522.42

(ii) Outstanding amount 7297.84 8666.00

4. Micro, Small and Medium Enterprises Development Act, 2006 The Company has not received information from vendors regarding their status under The Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount and interest have not been made.

5. Disclosure pursuant to AS-28 on Impairment of Assets: During the year, a review has been done for carrying value of the assets for finding out the impairment, if any. The review has not revealed any impairment of assets in terms of AS-28, except to the extent of Rs.3.82 lakhs (11.02 lakhs) in the Beverage Division, which has been provided for.

6. Funded Interest under CDR Scheme for Rs.4040.43 lakhs (Rs.5050.54 lakhs) included in Other Non Current Asset in Note No.13 is to be written off over a period of time as and when it becomes payable and it is not realizable in value.

7 . The Company has opted to recognize foreign exchange fluctuation based on maturity of obligations in conformity with the option given by notification No.GSR 913(E) Dated 29th December 2011 issued by the Ministry of Corporate Affairs.

8. Previous year''s figures have been regrouped / restated wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2013

1 Related Parties Disclosure:

I. Related Parties:

a. Subsidiary Companies

Sakthi Auto Component Limited Sakthi Auto Ancillary Private Limited

b. Associates

ABT Limited

ABT Industries Limited

ABT Info Systems Pvt. Limited

ABT Foods Limited

Anamallais Bus Transport Pvt. Limited

Sakthi Finance Limited

Sri Chamundeswari Sugars Limited (SCSL)

Nachimuthu Industrial Association

The Gounder & Co

c. Key Managerial Personnel (KMP)

Dr. N Mahalingam, Chairman

Dr. M Manickam, Vice Chairman and Managing Director Sri M Balasubramaniam, Joint Managing Director - Finance Sri M Srinivaasan, Joint Managing Director - Technical Sri V K Swaminathan, Executive Director

d. Relatives of Key Managerial Personnel

There has been no transaction with the relatives of key managerial personnel

e. Enterprises in which KMP/Relatives of KMP can exercise significant influence

Anamallais Retreading Corporation

N.Mahalingam & Company

Sakthi Automobiles

Sakthi Coffee Estates (P) Limited

ABT Textiles (P) Limited

Sri Bhagavathi Textiles Limited

Sri Sakthi Textiles Limited

Note : Information has been furnished with respect to individuals/entities with whom/which related party transactions had taken place during the year

2 Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received information from vendors regarding their status under The Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount and interest have not been made.

3 Disclosure as required under clause 32 of the listing agreement:

Amount of loans and advances in the nature of loans to subsidiaries and associates and the maximum amount outstanding during 2012-13:

4 Disclosure pursuant to AS-28 on Impairment of Assets:

During the year, a review has been done for carrying value of the assets for finding out the impairment, if any. The review has not revealed any impairment of assets in terms of AS-28, except to the extent of Rs.11.02 lakhs (Rs.237.12 lakhs) in the Beverage Division, which has been provided for.

5 Funded Interest under CDR Scheme for Rs.5050.54 lakhs (Rs.6060.65 lakhs) included in Other Non Current Asset in Note No. 13 is to be written off over a period of time as and when it becomes payable and it is not realizable in value.

6 The company has opted to recognize foreign exchange fluctuation based on maturity of obligations in conformity with the option given by notification No.GSR 913(E) dated 29th December 2011 issued by the Ministry of Corporate Affairs.

7 Previous year''s figures have been regrouped / restated wherever necessary to correspond with the current year''s classification/disclosure.


Mar 31, 2012

Rights, Preferences and Restrictions of each class of Shares

The Company has only one class of Equity shares having face value of Rs.10 each. Each shareholder is eligible for one vote per share. Dividend is payable when it is recommended by the Board of Directors and approved by the Members at the Annual General Meeting. In the event of liquidation, the equity shareholders will get the remaining assets after payment of all the preferential amounts.

1 The term loans under 1 & 2 above are further secured by pledge of shares held by the promoters in the Company.

2 Guarantees given by Directors/Others:

a) Term loans amounting to Rs.54032.32 lakhs (Rs.63087.91 lakhs) are guaranteed by Dr. N.Mahalingam, Dr. M.Manickam, Sri.M.Balasubramaniam and Sri. M.Srinivaasan.

b) Term loans amounting to Rs.5860 lakhs (Nil) are guaranteed by Dr. M.Manickam, Sri M.Balasubramaniam and Sri M.Srinivaasan.

c) Term loan amounting to Rs. 2456 lakhs (Nil) is additionally secured by corporate guarantee and collateral security given by a group company.

3 An amount of Rs.14016.20 lakhs (Rs. 17206.91 lakhs) included in current maturities of long term debts (Note No.7) is additionally secured by corporate guarantee and collateral security given by a group company.

4 An amount of Rs.574.80 lakhs (Rs. 793.09 lakhs) included in current maturities of long term debts (Note No.7) is additionally secured by corporate guarantee and collateral security given by a group company.

5 Period and amount of continuing default as on the date of Balance Sheet :

NATURE OF SECURITY FOR SHORT TERM BORROWINGS

A) SECURED LOANS FROM BANKS

1 Working capital loans amounting to Rs.4266.99 lakhs (Rs.1439.69 lakhs) are secured by

a) Pari passu first charge by way of hypothecation of the current assets of the Company, except TNEB receivables.

b) Pari passu second charge on the entire movable and immovable properties of the Company, except Sugar and Co-generation Units in Sivaganga and Modakuruchi.

2 Working capital loan (Bills Discounting facility) amounting to Rs.1145.38 lakhs (Rs.1190.34 lakhs) secured by

a) Pari passu first charge by way of hypothecation of the current assets of the Company, except TNEB receivables.

b) First charge on the TNEB receivables of Cogen Unit at Sivaganga.

c) Pari passu second charge on the entire movable and immovable properties of the Company, except Sugar and Co-generation Units in Sivaganga and Modakuruchi.

3 Working capital loan amounting to Rs.759.61 lakhs (Rs. 698.28 lakhs) is secured by

a) Pari passu first charge on the current assets of sugar division (except Modakuruchi), distillery and soya units.

b) Pari passu second charge on the immovable and movable assets of the Company's sugar (except Sivaganga & Modakuruchi), distillery and soya units.

4 Short term corporate term loan amounting to Rs 838.45 lakhs (Nil) is secured by assignment of receivables from TNEB amounting to Rs.1047 lakhs.

5 Working capital loan amounting to Nil (Rs.564.69 lakhs) is secured by

a) Exclusive charge by way of hypothecation of raw sugar in transit from bonded warehouse in ports, raw and processed sugar at the sugar factories of the company, white sugar in transit for export and documents of title to goods covered under LC/EBN, packing materials, etc.

b) Pari passu second charge on the immoveable assets of the Company, except assets exclusively charged.

6 Working capital loan amounting to Nil (Rs.600 lakhs) is secured by

a) Pari passu first charge on stocks and receivables.

b) Pari passu second charge on fixed assets of the Company, except assets exclusively charged.

7 The loans under 1 & 2 above are further secured by pledge of shares held by the promoters in the Company.

8 Guarantees given by Directors:

a) Working capital loans amounting to Rs.5412.37 lakhs (Rs.2630.03 lakhs) are guaranteed by Dr. N.Mahalingam, Dr. M.Manickam, Sri.M.Balasubramaniam and Sri. M.Srinivaasan.

b) Working capital loan amounting to Rs.759.61 lakhs (Rs.698.28 lakhs) is guaranteed by Dr. N.Mahalingam and Dr. M.Manickam.

c) Short term corporate loan amounting to Rs. 838.45 lakhs (Rs.1164.69 lakhs) is guaranteed by Dr. M.Manickam .

B) SECURED LOANS FROM OTHER PARTIES

1 Bills Finance facility amounting to Rs.1867.76 lakhs (Nil) is secured by

a) Pari passu first charge on the assets pertaining to Co-generation Plant at Sakthinagar.

b) Receivables from TNEB against supply of power from Co-generation plant at Sakthinagar.

2 Guarantees given by Directors:

Short term borrowing amounting to Rs. Rs.1867.76 lakhs (Nil) is guaranteed by Dr. M.Manickam, Sri.M.Balasubramaniam and Sri.M.Srinivaasan.

SHORT TERM UNSECURED BORROWINGS

A) UNSECURED LOANS FROM BANKS

Bill discounting facility amounting to Rs.478.00 lakhs (Nil) is guaranteed by Dr.M.Manickam.

B) UNSECURED LOANS FROM OTHER PARTIES

Bill discounting facility amounting to Rs.244.98 lakhs (Rs.500 lakhs) is guaranteed by Dr.M.Manickam.

1 Related Parties Disclosure:

I. Related Parties:

a. Subsidiary Companies

Sakthi Auto Component Limited

Sakthi Auto Ancillary Private Limited

b. Associates

ABT Limited ABT Industries Limited

ABT Info Systems Pvt. Limited

ABT Foods Limited

Anamallais Bus Transport Pvt. Limited

Sakthi Finance Limited

Sri Chamundeswari Sugars Limited

Nachimuthu Industrial Association

The Gounder & Co

c. Key Managerial Personnel (KMP)

Dr. N Mahalingam, Chairman

Dr. M Manickam, Vice Chairman and Managing Director

Sri M Balasubramaniam, Joint Managing Director - Finance

Sri M Srinivaasan, Joint Managing Director - Technical

Sri V K Swaminathan, Executive Director

d. Relatives of Key Managerial Personnel

There has been no transaction with the relatives of key managerial personnel

e. Enterprises in which KMP/Relatives of KMP can exercise significant influence

Anamallais Retreading Corporation

N.Mahalingam & Company

Sakthi Automobiles

Sakthi Coffee Estates (P) Limited

ABT Textiles (P) Limited

Sri Bhagavathi Textiles Limited

Sri Sakthi Textiles Limited

Note : Information has been furnished with respect to individuals/entities with whom/which related party transactions had taken place during the year

2 Contingent liabilities: (Rs. in lakhs)

Particulars 31.03.2012 31.03.2011

A) Claims against the Company not acknowledged as debts:

(i) Income tax matters 5650.81 394.68

(ii) Purchase tax/sales tax matters 2673.06 2691.80

(iii) Others 5489.95 4943.37

B) Guarantees issued by bankers 49.01 29.01

C) Corporate guarantee given for loans to subsidiaries:

(i) Guarantee amount 48581.58 43381.88

(ii) Outstanding amount 40885.03 37469.98

3 Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received information from vendors regarding their status under The Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount and interest have not been made.

4 Disclosure pursuant to AS-28 on Impairment of Assets:

During the year, a review has been done for carrying value of the assets for finding out the impairment, if any. The review has not revealed any impairment of assets in terms of AS-28, except to the extent of Rs. 237.12 lakhs in the Beverage Division, which has been provided for.

5 Funded Interest under CDR Scheme for Rs.6060.65 lakhs (Previous year Rs.8080.86 lakhs) included in Other Non Current Asset in Note No. 13 is to be written off over a period of time as and when it becomes payable and it is not realizable in value.

6 During the year under review, the Company has opted to recognize foreign exchange fluctuation based on maturity of obligations in conformity with the option given by Notification No: GSR 913(E) Dated 29th December 2011 issued by the Ministry of Corporate Affairs.

7 The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / restated wherever necessary to correspond with the current year's classification/disclosure.

8 Current year figures are not comparable with the previous year figures as the current year is for a period of 12 months whereas the previous year figures are for a period of 15 months.


Mar 31, 2011

A. SECURED LOANS

1. LOANS UNDER CDR

I. FROM BANKS

a) The amount outstanding under Secured Loans from Banks includes Term Loans, Working Capital Term Loans and Funded Interest Term Loans aggregating to Rs.83,155.19 lakhs (including interest) from Axis Bank Ltd, Allahabad Bank, Bank of India, Canara Bank, HDFC Bank Limited, IDBI Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank and State Bank of India. These Loans are secured by:

i) Pari passu first charge on the entire movable and immovable properties of the Company except the assets charged on exclusive basis;

ii) Pari passu second charge on the current assets of the Company;

iii) Pledge of shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director (Finance) and Joint Managing Director (Technical); and

v) Collateral security and Corporate Guarantee provided by a promoter company

b) The amount outstanding under Secured Loans from Banks includes Term Loans and Funded Interest Term Loans aggregating to Rs. 3,875.94 lakhs (including interest) from Allahabad Bank. These Loans are secured by:

i) Pari passu First charge on the entire movable and immovable properties of the Company except the assets charged on exclusive basis;

ii) First charge on the assets pertaining to Co-generation Plant I at Sakthi Nagar ranking pari passu with TIIC;

iii) Pari passu second charge on the current assets of the Company;

iv) Pledge of shareholdings of the promoters in the Company;

v) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director (Finance) and Joint Managing Director (Technical); and

vi) Collateral security and Corporate Guarantee provided by a promoter company.

c) The amount outstanding under Secured Loans from Banks includes Term Loan of Rs.2,841.12 lakhs (including interest) from State Bank of India. This loan is secured by:

i) Residual charge on the entire fixed assets of the Company. The charge on the assets of sugar division ranking pari passu with Bank of India, Canara Bank, HDFC Bank and Indian Overseas Bank;

ii) Residual charge on the current assets of the Company;

iii) Pledge of shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director (Finance) and Joint Managing Director (Technical); and

v) Collateral security and Corporate Guarantee provided by a promoter company.

d) The amount outstanding under Hypothecation loans from Banks includes Working Capital facilities of Rs. 1,439.69 lakhs from Bank of India, HDFC Bank and Indian Overseas Bank which are secured by:

i) First charge by way of hypothecation of the current assets of the Company ranking pari passu with Citibank;

ii) Pari passu second charge on the entire movable and immovable properties of the Company except Sugar and Co-generation Units in Sivaganga and Modakuruchi;

iii) Pledge of shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director (Finance) and Joint Managing Director (Technical); and

v) Collateral security and Corporate Guarantee provided by a promoter company.

e) The amount outstanding under Secured Loans includes Bill Discounting limit of Rs.1,200.04 lakhs (including interest) from Bank of India. The loan is secured by:

i) First charge by way of hypothecation of the current assets of the Company ranking pari passu with HDFC Bank, Indian Overseas Bank and Citibank N.A

ii) First charge on the TNEB receivables;

iii) Pari passu second charge on the entire movable and immovable properties of the Company except Sugar and Co-generation Units in Sivaganga and Modakuruchi;

iv) Pledge of shareholdings of the promoters in the Company;

v) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director (Finance) and Joint Managing Director (Technical); and

vi) Collateral security and Corporate Guarantee provided by a promoter company.

II. FROM OTHERS

The amount outstanding under Secured Loans from Others includes Term Loan and Funded Interest Term Loan aggregating to Rs.4,702.16 lakhs (including interest) from Infrastructure Development Finance Company (IDFC) Limited. This loan is secured by:

i) Pari passu first charge on the entire movable and immovable properties of the Company except the assets charged on exclusive basis;

ii) Pari passu second charge on the current assets of the Company;

iii) Pledge of shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director (Finance) and Joint Managing Director (Technical); and

v) Collateral security and Corporate Guarantee provided by a promoter company.

The Collateral security and the Corporate Guarantee provided by a promoter company for the loans under serial Nos.l (a)(c)(d)(e) and II above are subject to an overall limit of Rs.180 crores and is subservient to the loans from Allahabad Bank under serial No.l(b) above and the loan from TIIC.

2. LOANS OUTSIDE CDR

I. FROM BANKS

a) The amount outstanding under Secured Loans from Banks includes Interest Free Excise Duty Term Loans aggregating to Rs.3,013.54 lakhs from Bank of India, Canara Bank, HDFC Bank and Indian Overseas Bank. These Loans are secured by:

i) Residual charge on the Fixed Assets of the Sugar Units of the Company ranking pari passu with State Bank of India; and

ii) Personal Guarantees of Chairman and Vice Chairman & Managing Director.

b) The amount outstanding under Hypothecation Loans from Banks includes Working Capital facility of Rs.706.96 lakhs (including interest) from Citibank which is secured by:

i) First charge by way of hypothecation of finished goods, raw materials, stock in process, stores and spares, book debts of the Company's sugar (except Modakurichi), distillery & soya units ranking pari passu with Bank of India, HDFC Bank and Indian Overseas Bank;

ii) Second charge on the immovable & movable assets of the Company's sugar (except Sivaganga & Modakurichi), distillery & soya units; and

iii) Personal guarantees of Chairman and Vice Chairman & Managing Director.

c) The amount outstanding under Hypothecation Loans from Banks includes Working Capital (Packing Credit) facility of Rs.578.92 lakhs (including interest) from Central Bank of India which is secured by:

i) Exclusive charge by way of hypothecation of raw sugar in transit from the bonded warehouse from ports, raw and processed sugar at the sugar factories of the company, white sugar in transit for export and documents of title to goods covered under LC/EBN, Packing materials etc.

ii) Second Charge on the immoveable assets of the company except assets exclusively charged ranking pari passu with the existing member banks of consortium for working capital facility.

iii) Personal Guarantee of Vice Chairman & Managing Director.

d) The amount outstanding under Hypothecation Loans from Banks includes Working Capital (Adhoc Cash Credit Limit) facility of Rs.600 lakhs from Bank of India which is secured by:

i) First pari passu charge on stocks and receivables.

ii) Second pari passu charge on Block assets to cover Working Capital Fund Based /Non Fund Based Limits (except assets exclusively charged).

iii) Personal Guarantee of Vice Chairman & Managing Director.

II. FROM OTHERS

1) The amount outstanding under Secured Loans from Others includes Term Loan of Rs.2,531.70 lakhs from Tamilnadu Industrial Investment Corporation Limited (TIIC). This loan is secured by:

i) First Charge on the movable and immovable assets of the Company's Cogen Plant-I at Sakthinagar Sugar Unit on pari passu basis with Allahabad Bank;

ii) Escrow of the receivable on evacuation of power to Tamil Nadu Electricity Board (TNEB) from the Co-gen plant-l at Sakthinagar;

iii) Escrow of receivable on sale of ethanol from the Company's distillery unit at Sakthinagar;

iv) Personal Guarantees of Chairman and Vice-Chairman & Managing Director; and

v) Collateral security provided by a promoter company.

2) The amount outstanding under Secured Loans from Others includes Corporate Loan of Rs.9.76 lakhs availed by the Company from Housing Development Finance Corporation Ltd (HDFC). This loan is secured by a mortgage of Company's property at New Delhi.

3) The amount outstanding under Secured Loans from Others includes Term Loan of Rs.3,614.56 lakhs availed by the Company from Sugar Development Fund (SDF) of Government of India. This loan is secured by exclusive second charge on the assets of sugar and cogen units at Sivaganga unit of the company.

4) The amount outstanding under Secured Loans from Others includes Term Loan of Rs.801.86 availed by the Company from Sugar Development Fund (SDF) of Government of India. This loan is secured by exclusive second charge on the assets of sugar and cogen units at Modakuruchi unit of the company.

5) The amount outstanding under Hire Purchase Loans aggregating to Rs.76.75 lakhs (total amount payable including future interest is Rs.88.07 lakhs) represents the amount availed by the Company from public limited companies and is secured by hypothecation of the vehicles so financed.

C. FOREIGN CURRENCY CONVERTIBLE BONDS

The Company had issued during May 2006, Zero coupon - Foreign Currency Convertible Bonds in two series aggregating to US$ 60 Million (Series A - US$ 20 million and Series B - US$ 40 million). These Bonds are convertible at the option of the holders into fully paid Equity shares at such conversion price as determined in accordance with the Offer Letter, but not less than Rs. 177.39 per share. Bonds of value aggregating to US$24.10 Million have been converted into 54,34,273 fully paid Equity shares at the conversion price of Rs.208 and Rs.190 per share for Series A and Series B respectively. Bonds for value aggregating to US$ 6.30 Million have been redeemed @40%. As on 31.3.2011, balance outstanding is US$ 1.0 Million of Series A Bonds and US$ 28.6 Million of Series B Bonds.

F. Borrowing Cost capitalized during the year is Rs. 1,020.88 lakhs (Previous year Rs.630.92 lakhs).

G. The Company has pledged 4,38,59,394 equity shares holding in Sakthi Auto Component Limited (SACL), wholly owned subsidiary, to secure the loan and obligation in relation to SACL.

K. RELATED PARTIES DISCLOSURE

I. RELATED PARTIES

A. SUBSIDIARY COMPANIES

Sakthi Auto Component Limited

Sakthi Auto Ancillary Private Limited

Tilan Sugar Limited (since dissolved)

B. KEY MANAGERIAL PERSONNEL

Dr N Mahalingam, Chairman

Dr M Manickam, Vice Chairman and Managing Director

Sri M Balasubramaniam, Joint Managing Director (Finance)

Sri M Srinivaasan, Joint Managing Director (Technical)

Sri V K Swaminathan, Executive Director

C. RELATIVES OF KEY MANAGERIAL PERSONNEL

There have been no transactions with relatives of key managerial personnel

D. ENTERPRISES WHERE CONTROL EXIST

ABT Limited

ABT Industries Limited

ABT Info Systems Pvt. Ltd

Anamallais Bus Transport Pvt. Ltd

Sakthi Finance Limited

Sakthi Logistic Services Ltd.

Sri Chamundeswari Sugars Limited (SCSL)

Nachimuthu Industrial Association

E. ENTERPRISES IN WHICH KEY MANAGERIAL PERSONNEL/RELATIVES OF KEY MANAGERIAL PERSONNEL HAVE SIGNIFICANT INFLUENCE

ARC Petroleum Services

N.Mahalingam & Company

Sakthi Automobiles

Sakthi Coffee Estates (P) Ltd

Note: Information has been furnished with respect to individuals/entities with whom/which related party transactions had taken place during the year.

O. The company has not received information from vendors regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount and interest have not been made.

S. DISCLOSURE PURSUANT TO AS-28 ON 'IMPAIRMENT OF ASSETS'

During the year, review has been done for carrying value of the assets for finding out the impairment, if any. The review has not revealed any impairment of assets in terms of AS-28.

T. CONTINGENT LIABILITIES IN RESPECT OF

(Rs. in lakhs)

Particulars 31.03.2011 31.12.2009

Income tax matters 394.68 1168.05

Purchase tax/sales tax matters 2691.80 2205.45

Excise/service tax matters 3293.16 3487.73

Water tax 822.40 662.34

Claims against the company not acknowledged as debts 827.81 1208.70

Note: Above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position of the company.

Guarantees issued by bankers 29.01 28.01

Corporate guarantee given for loans to subsidiaries

a. Guarantee amount 43381.88 53945.30

b. Outstanding amount 37469.98 44299.33

Export obligation:

Obligation for export of sugar (in lakh Mts) - 1.67

Duty component to be paid in case of non fulfillment of obligation - 15524.92

U. Wherever necessary, figures for previous year have been regrouped or reclassified to conform to this year's grouping or classification.

V. Previous year's figures are not comparable with the current year figures as the current year is for a period of 15 months whereas previous year's figures were for a period of 12 months.


Dec 31, 2009

A. SECURED LOANS:

LOANS UNDER CDR:

I. FROM BANKS:

a) The amount outstanding under Secured Loans from Banks includes Term Loans, Working Capital Term Loans and Funded Interest Term Loans aggregating to Rs.78,930.05 lakhs (including interest) from Axis Bank Ltd, Bank of India, Canara Bank, HDFC Bank, IDBI Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank and State Bank of India. These Loans are secured/to be secured by-

i) Pari passu first charge on the entire movable and immovable properties of the Company except the assets charged on exclusive basis;

ii) Pari passu second charge on the current assets of the Company;

iii) Pledge of entire shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director- Finance and Joint Managing Director-Technical; and

v) Collateral security and Corporate Guarantee provided by a promoter company upto a limit of Rs.180 crores in favour of lenders under CDR.

b) The amount outstanding under Secured Loans from Banks includes Term Loans and Funded Interest Term Loans aggregating to Rs.7,474.83 lakhs from Allahabad Bank. These Loans are secured/ to be secured by -

i) Pari passu first charge on the entire movable and immovable properties of the Company except the assets charged on exclusive basis;

ii) First charge on the assets pertaining to Co-generation Plant I at Sakthinagar ranking pari passu with TIIC;

iii) Pari passu second charge on the current assets of the Company;

iv) Pledge of entire shareholdings of the promoters in the Company;

v) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director- Finance and Joint Managing Director-Technical; and

vi) Collateral security and Corporate Guarantee provided by a promoter company.

c) The amount outstanding under Secured Loans from Banks includes Term Loan of Rs.2779.75 lakhs from State Bank of India. This loan is secured/to be secured by -

i) Residual charge on the entire fixed assets of the Company. The residual charge on the fixed assets pertaining to sugar units rank pari passu with Bank of India, Canara Bank, HDFC Bank and Indian Overseas Bank;

ii) Residual charge on the current assets of the Company;

iii) Pledge of entire shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director- Finance and Joint Managing Director-Technical; and

v) Collateral security and Corporate Guarantee provided by a promoter company.

d) The amount outstanding under Hypothecation loans from Banks includes Working Capital facilities of Rs. 1396.56 lakhs (including interest) from Bank of India, HDFC Bank and Indian Overseas Bank which are secured by -

i) First charge by way of hypothecation of the current assets of the Company ranking pari passu with Citibank;

ii) Pari passu second charge on the entire movable and immovable properties of the Company except Sivaganga Sugar and Co-generation Units;

iii) Pledge of entire shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director- Finance and Joint Managing Director-Technical; and

v) Collateral security and Corporate Guarantee provided by a promoter company.

II. FROM OTHERS:

The amount outstanding under Secured Loans from Others includes Term Loan and Funded Interest Term Loan aggregating to Rs.4,604.85 lakhs (including interest) from Infrastructure Development Finance Company Limited (IDFC). This loan is secured/to be secured by -

i) Pari passu first charge on the entire movable and immovable properties of the Company except the assets charged on exclusive basis;

ii) Pari passu second charge on the current assets of the Company;

iii) Pledge of entire shareholdings of the promoters in the Company;

iv) Personal Guarantees of Chairman, Vice Chairman & Managing Director, Joint Managing Director- Finance and Joint Managing Director-Technical; and

v) Collateral security and Corporate Guarantee provided by a promoter company.

B. LOANS OUTSIDE CDR:

I. FROM BANKS:

a) The amount outstanding under Secured Loans from Banks includes Interest Free Excise Duty Term Loans aggregating to Rs.5166.11 lakhs from Bank of India, Canara Bank, HDFC Bank and Indian Overseas Bank. These Loans are secured by -

i) Residual charge on the fixed assets of the Sugar Units of the Company ranking pari passu

with State Bank of India; and ii) Personal Guarantees of Chairman and Vice Chairman & Managing Director.

b) The amount outstanding under Hypothecation Loans from Banks includes Working Capital facility of Rs.699.47 lakhs (including interest) from Citibank which is secured by -

i) First charge by way of hypothecation of finished goods, raw Materials, stock in process, stores and spares, book debts of the Companys sugar (except Modakurichi), distillery & soya units ranking pari passu with Bank of India, HDFC Bank and Indian Overseas Bank;

ii) Second charge on the immovable & movable assets of the Companys Sugar (except Sivaganga & Modakurichi), Distillery & Soya units; and

iii) Personal guarantees of Chairman and Vice Chairman & Managing Director.

II. FROM OTHERS:

1) The amount outstanding under Secured Loans from Others includes Term Loan of Rs.3120.73 lakhs (including interest) from Tamilnadu Industrial Investment Corporation Limited (TIIC). This loan is secured by:-

i) First Charge on the movable and immovable assets of the Companys Cogen Plant-I at Sakthinagar Sugar Unit on pari passu basis with Allahabad Bank;

ii) Escrow of the receivable on evacuation of power to Tamil Nadu Electricity Board (TNEB) from the Co- gen plant-l at Sakthinagar on pari passu basis with Allahabad Bank;

iii) Escrow of receivable on sale of ethanol from the Companys distillery unit at Sakthinagar;

iv) Personal Guarantees of Chairman and Vice-Chairman & Managing Director; and

v) Collateral security provided by a promoter company.

2) The amount outstanding under Secured Loans from Others includes Corporate Loan of Rs.26.08 lakhs availed by the Company from Housing Development Finance Corporation Ltd (HDFC). This loan is secured by a mortgage of Companys property at New Delhi.

3) The amount outstanding under Secured Loans from Others includes Term Loan of Rs. 197.84 lakhs availed by the Company from Sugar Development Fund (SDF) of Government of India. This loan is secured by pari passu first charge on the fixed assets of the Companys sugar units at Sakthinagar, Sivaganga and Dhenkanal.

4) The amount outstanding under Secured Loans from Others includes interest amounting to Rs.41.49 lakhs on the Term Loan availed by the Company from Technology Information Forecasting and Assessment Council (TIFAC). This loan is secured by exclusive first charge on the assets acquired under the Scheme. This loan is further secured by personal guarantee of Vice Chairman & Managing Director.

5) The amount outstanding under Hire Purchase Loans aggregating to Rs.67.31 lakhs represents the amount availed by the Company from public limited companies and is secured by hypothecation of the vehicles so financed.

C. FIXED DEPOSITS:

The aggregate amount of fixed deposits guaranteed by Vice-Chairman & Managing Director is Rs.25.94 lakhs.

D. FOREIGN CURRENCY CONVERTIBLE BONDS:

The Company had issued during May 2006, Zero coupon - Foreign Currency Convertible Bonds in two series aggregating to US$ 60 Million (Series A - US$ 20 million and Series B - US$ 40 million). These Bonds are convertible at the option of the holders into fully paid Equity shares at such conversion price as determined in accordance with the Offer Circular, but not less than Rs.177.39 per share. As on 31.12.2009, Bonds of value aggregating to US$15.40 Million have been converted into 34,60,569 fully paid Equity shares at the conversion price of Rs.208 and Rs.190 per share for Series A and Series B respectively. Subsequently Bonds of value aggregating to US$ 8.70 Million have been converted in to 19,73,704 fully paid Equity shares on the same pricing terms during the months of January and March 2010.

G. Borrowing Cost capitalized during the year is Rs. 630.92 lakhs (Previous year Rs.2783.25 lakhs).

H. The Company has pledged 4,38,59,394 equity shares held in SACL, the wholly owned subsidiary, to secure the loan and obligation in relation to SACL.

M. RELATED PARTIES DISCLOSURE

I. RELATED PARTIES

A. SUBSIDIARY COMPANIES

Sakthi Auto Component Limited

Sakthi Auto Ancillary Private Limited

Tilan Sugar Limited

Orlandofin B.V.

Sakthi Netherlands B.V.

Sakthi European Foreign Sales Corporation B.V.

Sakthi Holdings B.V.

Sakthi Service GMBH

Sakthi Portugal SA

B. KEY MANAGERIAL PERSONNEL

Dr. N Mahalingam, Chairman

Sri M Manickam, Vice Chairman and Managing Director Sri M Balasubramaniam, Joint Managing Director-Finance Sri M Srinivaasan, Joint Managing Director-Technical Sri V K Swaminathan, Executive Director

C. RELATIVES OF KEY MANAGERIAL PERSONNEL

There have been no transactions with relatives of key managerial personnel.

D. ENTERPRISES WHERE CONTROL EXIST

ABT Limited

ABT Industries Limited

ABT Info Systems Pvt. Ltd

Anamallais Bus Transport Pvt. Ltd

Sakthi Finance Limited

Sakthi Logistic Services Ltd.

Sri Chamundeswari Sugars Limited (SCSL)

Nachimuthu Industrial Association

E. ENTERPRISES IN WHICH KEY MANAGERIAL PERSONNEL/RELATIVES OF KEY MANAGERIAL PERSONNEL HAVE SIGNIFICANT INFLUENCE

ARC Petroleum Services N.Mahalingam & Company Sakthi Automobiles Sakthi Coffee Estates (P) Ltd.

Q. The company has not received information from vendors regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount and interest has not been made.

R. EMPLOYEE BENEFITS

Gratuity and Provident Fund:

Gratuity, Provident Fund and Employees State Insurance are defined Contribution Plans. The expenses recognised in the Profit and Loss Account:-

U. DISCLOSURE PURSUANTTOAS-28 ON IMPAIRMENTOF ASSETS:

The Company during the year, has reviewed carrying value of the assets for finding out the impairment, if any. The review has not revealed any impairment of assets in terms of AS-28.

V. CONTINGENT LIABILITIES IN RESPECT OF -

(Rs. in Lakhs)

Particulars 31.12.2009 31.12.2008

Income tax matters 1168.05 708.20

Purchase tax/sales tax matters 2205.45 2250.54

Excise/service tax matters 3487.73 3018.98

Water tax 662.34 617.81

Claims against the company not acknowledged as debts 1208.70 1638.94

Note: Above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position of the company.

Guarantees issued by bankers 28.01 35.53 Corporate guarantee given for loans to subsidiaries

a. Guarantee amount 53945.30 63408.55

b. Outstanding amount 44299.33 53268.96

Export obligation:

Obligation for export of sugar (in lakh Mts) 1.67 1.71

Duty component to be paid in case of non fulfillment of obligation 15524.92 15866.58

W. Wherever necessary, figures for previous year have been regrouped or reclassified to conform to this years grouping or classification.

X. Previous years figures are not comparable with the current year figures as the current year is for a period of 12 months whereas previous years figures were for a period of 18 months.

 
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