Mar 31, 2018
To the Members
The Board of Directors of the Company presents its Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March, 2018.
FINANCIAL HIGHLIGHTS (Rs in lakhs)
Particulars |
2017-18 |
2016-17 |
Revenue |
||
Sugar Division |
34246.59 |
61886.47 |
Distillery Division |
4936.91 |
13320.46 |
Cogeneration Division |
1015.50 |
5679.55 |
Soya Division |
12821.06 |
13011.08 |
Total Revenue |
53020.06 |
93897.56 |
Other Income |
1139.64 |
2484.84 |
Total Income |
54159.70 |
96382.40 |
Profit before Finance Cost and Depreciation & Amortisation and Exceptional Item |
(2694.44) |
13861.49 |
Finance Cost |
14994.92 |
14019.81 |
Provision for Depreciation |
5281.69 |
5700.47 |
Net Profit before Exceptional Item and Tax |
(22971.05) |
(5858.79) |
Exceptional Items Gain / (Loss) |
(2249.33) |
10173.94 |
Net Profit before Tax |
(25220.38) |
4315.15 |
Provision for Tax |
(7510.12) |
1280.17 |
Net Profit after Tax |
(17710.26) |
3034.98 |
Balance brought forward |
1681.86 |
(1353.12) |
Retained Earnings |
(16028.40) |
1681.86 |
THE INDIAN ACCOUNTING STANDARDS (Ind AS)
The Indian Accounting Standards prescribed under the Companies (Indian Accounting Standards) Rules 2016 are applicable to the Company from 1st April 2017, with 1st April 2016 as transition date. The financial statements for the year ended 31st March 2018 have been prepared in accordance with Ind-AS. The financial results for the previous financial year 2016-17 are adjusted / reconciled as per Ind AS.
REVIEW OF OPERATION
Due to severe drought condition there had been reduction in the availability of sugarcane and the yield has also come down drastically which has resulted in overall reduction in the Companyâs performance in all the units. The Company had imported and processed raw sugar of 37,768 MT. The power division has lost its significance on account of surplus availability of power and sluggishness in demand resulting in reduction in per unit price for power. The operational performance of Soya Unit is satisfactory. There has been decrease in the selling price of soya products resulting in reduction in the average realisation. There is no change in the nature of business during the financial year and until the date of this report.
SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during the year 2017-18 is as under:
Name of the Unit |
Cane crushed (in MT) |
Sakthinagar : |
99,173 |
Sivaganga : |
1,48,409 |
Dhenkanal : |
3,01,660 |
During the year under review, 0.85 lakh MT of sugar was produced by the Company including 0.35 MT out of raw sugar, which is less by 0.91 lakh MT as compared to the previous year. The quantum of sugar sales and the sale value have come down as compared to the previous year.
DISTILLERY DIVISION
During the year under review 63.23 lakh litres (previous year 228.91 lakh litres) of industrial alcohol was produced at Sakthinagar Distillery Unit and 47.31 lakh litres (previous year 61.28 lakh litres), at Dhenkanal Distillery Unit.
SOYA DIVISION
25,004 tonnes (previous year 21,947 tonnes) of soya bean was crushed in the Soya Plant during the year under review. This Division had exported products worth Rs.1530.58 lakhs (previous year Rs.1495.87 lakhs) to various countries.
CO-GENERATION DIVISION
The total power generated in the co-generation plants during the year was 638.41 lakh units (Previous year 2712.09 lakh units) out of which 379.83 lakh units (Previous year 1614.55 lakh units) of power was exported. The Company is selling the power through Indian Energy Exchange (IEX).
FUTURE OUTLOOK
The beginning of south-west monsoon has been good and availability of sugarcane could increase from next season. The financial results are expected to improve positively provided economical prices are given for ethanol and power.
DEPOSITS
The Company has not accepted any deposit during the financial year under review. At the end of the financial year, no deposit is remaining unclaimed.
CORPORATE INFORMATION
In view of the drought condition that prevailed in Tamil Nadu, the Companyâs operation got affected and it is facing consequential financial strain. The Company is in discussion with the Term lenders for restructuring of the loans with moratorium period till October 2019 and to elongate payment of principal and interest upto 2023.
For the purpose of reducing the liabilities of the Company, the Board of Directors have approved sale of Companyâs holdings of equity shares in Sakthi Auto Component Limited (SACL), Associate Company, and non-core assets of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Sri V.K.Swaminathan (DIN:00210869) , Executive Director, has resigned his directorship on 29.05.2018.
Sri M.Srinivaasan (DIN:00102387) has resigned from the office of Joint Managing Directorship on 12th June 2018 and he continues to be a Non-Executive Director.
Sri M.Balasubramaniam (DIN: 00377053) held office as Managing Director of the Company upto 27.6.2018, i.e. upto the end of the tenure of his office as Managing Director. He did not opt for reappointment. He continues to be a Non-Executive Director of the Company. He retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.
Dr.M.Manickam (DIN: 00102233), Executive Chairman, has been appointed as Chairman and Managing Director of the Company for a period of five years from 12.6.2018 without remuneration, subject to approval of the members at the ensuing Annual General Meeting. He is liable to retire by rotation.
Sri S.Baskar, Chief Financial Officer and Company Secretary, is relieved as Chief Financial Officer and redesignated as Sr. Vice President and Company Secretary. Sri C.R.Sankar, Vice President-Finance and Accounts, has been appointed as Chief Financial Officer with effect from 13th August 2018.
DIRECTORS 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 loss of the Company for that financial year;
(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;
(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(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.
MEETINGS OF BOARD OF DIRECTORS
The Board met 4 times during the financial year ended 31st March 2018. The details of the Board Meetings and the attendance of the Directors are given in the Corporate Governance Report.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises the following Directors as its members:
1. Sri C.Rangamani, Chairman
2. Sri N.K.Vijayan
3. Sri K.V.Ramachandran
4. Smt. Priya Bhansali
Details regarding meetings of the Audit Committee and the attendance of the members are given in the Corporate Governance Report.
BOARD EVALUATION
Pursuant to the provisions contained in the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a formal annual evaluation of the performance of the Board, its Committees and of individual Directors has been made. The manner in which the evaluation was carried out and the process adopted are given in the Corporate Governance Report.
DETAILS OF REMUNERATION TO DIRECTORS
Details of ratio of remuneration to each Director to the median employeeâs remuneration and other disclosures required under Section 197(12) of the Companies Act 2013 and Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration) Rules 2014 are given in Annexure-A.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee and the details of the Committee are set out in the Corporate Governance Report. Pursuant to Regulation 17(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has laid down risk management policy to identify, evaluate and mitigate risks. It seeks to ensure transparency and to minimise adverse impact on the business operations of the Company.
ASSOCIATE COMPANY
Pursuant to Rule 6 of the Companies (Accounts) Rules 2014, the financial statements for the year ended 31st March 2018 of Sakthi Auto Component Limited, Associate Company, have been consolidated and the consolidated financial results of the Company and the Associate Company form part of the audited financial statements of the Company. In terms of Rule 8 of the said Rules, highlights of the performance of the said Associate Company and its contribution to the overall performance of the Company are given hereunder:
(Rs. in lakhs)
31.3.2018 |
31.3.2017 |
|
Revenue from operations |
75036.84 |
73952.74 |
Profit before tax |
3836.08 |
3572.51 |
Profit after tax |
2346.48 |
1860.02 |
Total Comprehensive Income |
2272.44 |
1781.84 |
Contribution to the overall performance of the Company |
- |
897.06 |
The statement containing the salient features of the Associate Company in Form AOC-1 form part of the financial statement.
INTERNAL CONTROL
The Company has internal control system commensurate with the size of the Company. Adequate procedures are set out for detecting and preventing frauds and for protecting the Companyâs assets. The head of Internal Audit Team reports to the Chairman of the Audit Committee for the purpose of maintaining independence and Internal Audit Reports are placed before the Audit Committee together with statement of significant audit observation and the suggested corrective action followed by a report on action taken thereon. Further the Company has adequate internal financial control with respect to the financial statements.
VIGIL MECHANISM
The Company has a whistle blower policy and a vigil mechanism for directors and employees to report genuine concerns in the prescribed manner. The vigil mechanism provides adequate safeguards against victimisation and for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The details of the whistle blower policy are posted on the website of the Company. No complaint has been received under this mechanism during the year under review.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with Auditors Certificate with respect to its compliance forms part of this Report.
A detailed Management Discussion and Analysis Report also forms part of this Report.
OTHER DISCLOSURES UNDER THE COMPANIES ACT 2013
i. Annual Return
Extract of the Annual Return has been placed in the Companyâs website www.sakthisugars.com, pursuant to Section 134(3)(a) as amended.
ii. Changes in Share Capital
There is no change in the share capital during the financial year under review.
iii. Policy on Directorsâ Appointment and Remuneration
The Companyâs policy for selection and appointment of directors, senior management personnel and fixation of their remuneration, including criteria for determining qualifications, positive attributes, independence of a director, are available in the Companyâs website www.sakthisugars.com and the salient features of the Policy are given in Annexure-B
iv. Related Party Transactions
All the related party transactions are at armâs length basis and have taken place in the ordinary course of business. Prior approval of the Audit Committee has been obtained for the transactions with related parties. A statement of all related party transactions is placed before the Audit Committee on quarterly basis. There has been no contract or arrangement with related parties attracting the provisions of Section 188(1) of the Companies Act 2013 during the financial year under review.
The Related Party Transactions Policy as approved by the Board is uploaded on the Companyâs website www.sakthisugars. com. The details of the transactions with Related Parties are provided in the accompanying financial statements.
v. Statement of declarations given by Independent Directors
The Independent Directors have given their declarations to the Board to the effect that they meet with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the relevant rules.
vi. Significant material orders passed by court or authorities
There are no significant orders passed by Court or regulatory authorities which would impact the status of the Company and its future operations.
vii. Particulars of loans, guarantees or investments
The Company has not given any loan or guarantee or has acquired any security during the financial year 2017-18 under Section 186 of the Companies Act, 2013.
viii. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and out go as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-C.
ix. There are no material changes affecting the financial position of the Company which has occurred between the end of the financial year and the date of this report.
x. The Company has complied with the Secretarial Standards as may be applicable to the Company.
STATUTORY AUDITORS
M/s. P.K. Nagarajan & Co., Chartered Accountants (Firm Registration Number 016676S), have been appointed by the members as Statutory Auditors of the Company for a period of five consecutive years from the conclusion of the 55th Annual General Meeting held on 27th September, 2017 till the conclusion of the 60th Annual General Meeting. They have confirmed that they are not disqualified for continuing as Statutory Auditors of the Company.
SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act 2013, the Board of Directors of the Company has appointed M/s.S.Krishnamurthy & Co., Company Secretaries, Chennai as Secretarial Auditors to undertake the secretarial audit of the Company for the year ended 31st March 2019. Secretarial Audit Report of M/s. S.Krishnamurthy & Co., Company Secretaries, Chennai for the year ended 31st March 2018 is annexed as Annexure-D.
COST AUDIT
The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. M/s. STR & Associates, Cost & Management Accountants, Tiruchirapalli, are the Cost Auditors for auditing the cost accounting records relating to Sugar, Industrial Alcohol, Power and Soya Divisions of the Company for the year ended 31st March 2018.
The said Firm has been appointed for the financial year ending 31st March 2019 and necessary resolution for ratification of their remuneration is included in the Notice for the ensuing Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135 of the Companies Act 2013 and Schedule VII thereto, the Company has constituted a CSR Committee and has adopted a CSR Policy and the same is available in the Companyâs website www.sakthisugars.com. As the Company has incurred loss for the three preceding financial years, the requirement of incurring expenditure towards fulfilment of its corporate social responsibility did not arise during the financial year under review.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013
The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the said Act. An Internal Complaints Committee (ICC) has been set up at every work place of business to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No sexual harassment complaint has been received during the financial year 2017-18.
AUDITORSâ REPORT
With reference to the Statutory Auditorsâ remarks, your Directors wish to state that the non-provision of interest is as per the original agreement entered into with the Associate Company.
The Statement of Impact on Audit Qualification is attached as Annexure-E.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the valuable assistance and co-operation extended by the shareholders, cane growers, banks, financial institutions and Government authorities. They also wish to appreciate the dedicated services rendered by officers, staff and workers of the Company.
On behalf of the Board of Directors
Chennai M Manickam
24th August 2018 Chairman and Managing Directtor
Mar 31, 2015
The Board of Directors of the Company presents its Annual Report
together with the Audited Financial Statements of the Company for the
year ended 31st March, 2015
Particulars 2014-15 2013-14
Sales (Net)
Sugar Division 42455.46 38344.75
Distillery Division 10654.66 15543.16
Cogeneration Division 16884.29 16884.29
Soya Division 13656.46 13711.06
Total sales 83650.87 70728.11
Other Income 3245.53 307.63
Total Income 86896.40 71035.74
Profit Before Finance Cost and
Depreciation & Amortisation 14375.67 1791.45
Finance Cost 12934.20 18590.93
Provision for Depreciation and
Amortisation 6379.36 6638.21
Net Profit before Tax (4937.89) (23437.69)
Provision for Tax (1460.96) (7499.36)
Net Profit after Tax (3476.93) (15938.33)
Balance of Profit brought forward (27402.41) (11464.08)
Less: Previous year depreciation
adjustment 423.20 -
Surplus carried to Balance Sheet (31302.54) (27402.41)
REVIEW OF OPERATION
The operations of Sugar and Alcohol Divisions of the Company during the
financial year have been affected due to non-availability of adequate
sugarcane for crushing and low realisation on sugar sold and the
reduced availability of molasses. However, operation of Power Division
has been encouraging due to higher rate of realisation per unit of
power with the Company coming out of Power Purchase Agreement and
engaging in sale of power through bidding process. There has been no
change in the nature of business during the financial year and until
the date of this report.
SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during
the year 2014-15 is as under:
Name of the Units Cane crushed (in tonnes)
Sakthinagar 7,23,966
Sivaganga : 2,62,650
Modakkurichi : 74,284
Dhenkanal : 4,15,577
During the year under review, 1.32 lakh MT of sugar was produced by the
Company, which is less by 0.15 lakh MT as compared to the previous
year. This is on account of reduction in the sugarcane availability.
The quantum of sugar sales and the sale value has gone up slightly
during the year, even though there is a decrease in the average selling
price of sugar per quintal.
DISTILLERY DIVISION
During the year under review, 161.18 lakh litres of industrial alcohol
was produced at Sakthinagar Distillery Unit and 84.26 lakh litres, at
Dhenkanal Distillery Unit.
SOYA DIVISION
23,056 tonnes of soya bean was crushed in the soya plant during the
year under review. This division had exported products worth Rs.2253.13
lakhs to various countries.
CO-GENERATION DIVISION
The total power generated in the co-generation plants during the year
was 3922.77 lakh units out of which 3179.21 lakh units of power was
exported to Tamilnadu Electricity Board. As the rate per unit of power
under the Power Purchase Agreements (PPA) entered into with Tamilnadu
Power Generating and Distribution Company Limited (TANGEDCO) was not
viable for generation of power using coal, the Company has come out of
the PPA. The Company has entered into another agreement with TANGEDCO
for sale of power at a higher rate per unit of power through bidding
process. This Agreement will expire on 30th September 2015.
FUTURE OUTLOOK
The selling price of sugar has come down far below the cost of
production and realisation on sale of sugar does not even meet the cost
of sugarcane crushed. This has made the sugar production unviable. With
the sugar season 2014-15 expected to end in surplus stock of sugar, the
possibility of sugar price going up in the near future is doubtful.
Besides reduced selling price for sugar, imposition of VAT at 5% on
sugar sales by Tamilnadu State Government has placed the sugar mills in
Tamilnadu at a disadvantageous position as they have to face
competition due to arrival of more quantity of sugar for sale from
other States where there is no VAT on sugar. Similar situation is faced
in respect of sale of industrial alcohol by the manufacturers in
Tamilnadu State on account of local levy of VATbeing higher than CSTon
imports from neighbouring States.
Unless the State and the Central Governments take corrective actions to
bail out the bleeding sugar industry, the outlook of sugar industry
will continue to be bleak.
DEPOSITS
The Company has not accepted any deposit from public during the
financial year under review. At the end of the financial year, 4
deposits amounting to Rs.0.65 lakh (including interest) remained
unclaimed. Of this 2 deposits amounting to Rs.0.34 lakh have since been
repaid.
CORPORATE INFORMATION
As the Madras Stock Exchange Limited (MSE) had applied to SEBI for
voluntary exit as a Stock Exchange, the Company made an application to
MSE for voluntary delisting from that Stock Exchange, which has been
approved by that Exchange. The equity shares of the Company remains
delisted from MSE from 15th October 2014. The equity shares of the
Company continue to be listed on National Stock Exchange of India
Limited (NSE) and the BSE Limited (BSE).
As per the directions of the Hon'ble High Court of Judicature at
Madras, meetings of equity shareholders and holders of FCCB were
convened on 22nd July 2015 and 23rd July 2015 respectively for
obtaining their approval for the scheme of arrangement for settlement
of the outstanding FCCB (Series B). However, at the instance of certain
bondholders, the High Court has postponed the aforesaid Court convened
meetings to October 2015 to facilitate modification of the Scheme.
The Company continues to be under the Corporate Debt Restructuring
Scheme with respect to the secured debts availed from Banks/Financial
Institutions. The rework package given by the Company has been approved
by the CDR Empowered Group and documentation in respect thereof is yet
to be done.
DIRECTORS AND KEY MANAGERIALPERSONNEL
It is with deep grief and regret, your Directors place on record the
demise of Dr.N.Mahalingam (DIN : 00206894), one of the Promoters and
Founder Chairman of the Company, on 2nd October 2014. The Directors
also place on record their appreciation of the contributions made by
Dr.Mahalingam in the development of the Company over a period of more
than half a century.
Dr.M.Manickam (DIN : 00102233), Executive Vice Chairman, has been
reappointed for a further period of five years from 24th October 2014,
subject to the approval of the Central Government. The Government's
approval is yet to be received.
At the meeting of the Board of Directors held on 12th November 2014,
Dr.M.Manickam has been elected to be the Chairman of the Board and has
been re-designated as Executive Chairman.
Sri M. Balasubramaniam (DIN : 00377053) has been appointed as Managing
Director and Sri M. Srinivaasan (DIN : 00102387) has been re-appointed
as Joint Managing Director with effect from 28.6.2013 and 23.1.2014
respectively for a period of 5 years, subject to the approval of the
Central Government. The Central Government has approved the
appointment/reappointment for 5 years, but restricted its approval for
payment of remuneration for the period from the date of
appointment/reappointment till 31st March 2014 and advised the Company
to make fresh applications under the Companies Act 2013 for its
approval. Accordingly applications have been made to the Central
Government for payment of remuneration to Sri M. Balasubramaniam and
Sri M. Srinivaasan from 1st April 2014 and the approvals are awaited.
The Board has re-appointed Sri V.K. Swaminathan (DIN : 00210869) as
Executive Director for a period of five years from 1st November 2015,
subject to the approval of the banks and financial institution, members
of the Company and of the Central Government as may be applicable.
The Board of Directors at its meeting held on 30th September 2014 had
appointed Sri K.V. Ramachandran (DIN : 00322331), Sri S.Chandrasekhar
(DIN : 00011901) and Sri S. Balasubramanian (DIN : 00458139) as
Additional Directors to hold office upto the date of the ensuing Annual
General Meeting of the Company. With a view to comply with the
requirements of Section 149(1) of the Companies Act, these Additional
Directors have been appointed as Independent Directors for a term of
five years from 30th September 2014, subject to approval of the Members
at the ensuing Annual General Meeting.
Mrs.Priya Bhansali (DIN : 00195848) has been appointed by the Board as
Additional Director with effect from 27th March 2015 to hold office
until the date of the ensuing Annual General Meeting of the Company.
Tamil Nadu Industrial Development Corporation Limited and IDBI Bank
Limited have withdrawn their respective Nominees Sri B. Elangovan (DIN
: 00133452) and Sri T.A. Ganesh (DIN : 01113674) from the Board of
Directors of the Company from 16th October 2014 and 20th May 2015
respectively. The Directors place on record their appreciation of the
contributions made by the above Nominee Directors to the Company during
their tenure of office as Directors. Sri P.S. Ravendernath (DIN :
00030770) has been nominated on the Board of the Company by Asset
Reconstruction Company (India) Limited effective from 2nd June 2015.
Notices together with requisite deposits have been received from
certain Members of the Company pursuant to Section 160 of the Companies
Act 2013 signifying their intension to propose resolutions for
appointment of Sri K.V. Ramachandran, Sri S. Chandrasekhar, Sri S.
Balasubramanian and Mrs. Priya Bhansali as Independent Directors of the
Company at the ensuing Annual General Meeting. The Nomination and
Remuneration Committee and the Board of Directors have recommended
appointment of these Directors as Independent Directors by the members
at the ensuing Annual General Meeting.
Sri V.K. Swaminathan retires by rotation at the ensuing Annual General
Meeting and is eligible for re-appointment.
Sri S. Audiseshiah, a retired IAS Officer, has been appointed as Chief
Executive Officer of the Company during the financial year and he is
not a member of the Board.
Pursuant to the requirement of Section 203 of the Companies Act, 2013,
the following Directors/Executives have been designated as whole time
Key Managerial Personnel during the year: Dr.M.Manickam, Executive
Chairman
Sri M.Balasubramaniam, Managing Director
Sri M.Srinivaasan, Joint Managing Director
Sri S.Audiseshiah, Chief Executive Officer
Sri M.K.Vijayaraghavan, Chief Financial Officer; and
Sri S.Baskar, Sr.Vice President-Finance & Company Secretary
DIRECTORS 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 loss of the
company for that financial year;
(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.
MEETINGS OF BOARD OF DIRECTORS
The Board met 6 times during the financial year ended 31st March 2015.
The details of the Board Meetings and the attendance of the Directors
are given in the Corporate Governance Report.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee was reconstituted by the Board on 30.9.2014. The
Audit Committee comprises the following Directors as its members:
1. Sri C.Rangamani, Chairman,
2. Sri N.K.Vijayan, and
3. Sri K.V.Ramachandran
Details regarding meetings of the Audit Committee and the attendance of
the members are given in the Corporate Governance Report.
BOARD EVALUATION
Pursuant to the provisions contained in the Companies Act 2013 and
Clause 49 of the Listing Agreement, the Board has carried out an annual
performance evaluation of its own performance, Committees of Directors
and individual directors. The manner of evaluation is given in the
Corporate Governance Report.
DETAILS OF REMUNERATION TO DIRECTORS
Details of Ratio of Remuneration to each Director to the median
employee's remuneration and other disclosures required under Section
197(12) of the Companies Act 2013 and Rule 5(1) of the Companies
(Appointment and Remuneration) Rules 2014 are given in Annexure-A. The
Company does not have any employee attracting the provisions of Rule
5(2) of the said Rules.
RISK MANAGEMENT POLICY
Pursuant to the requirement of Clause 49 of the Listing Agreement, the
Company has constituted a Risk Management Committee. The details of
the Committee are set out in the Corporate Governance Report. The risk
management policy aims to identify, evaluate and mitigate risks. It
seeks to ensure transparency and to minimise adverse impact on the
business operations of the Company.
ASSOCIATE COMPANY
Effective from 1st April 2014, Sakthi Auto Component Limited has become
an Associate Company with about 26% of its total share capital being
held by the Company. Pursuant to the third proviso to Rule 6 of the
Companies (Accounts) Rules 2014, consolidated financial results of the
Company and the Associate Company for the financial year ended 31st
March 2015 are not made. In view of this, report on the performance and
financial position of the said Associate Company is not provided in
terms of Rule 8 of the said Rules
INTERNAL CONTROL
The Company has internal control system commensurate with the size of
the Company. Adequate procedures are set for detecting and preventing
frauds and for protecting the Company's assets. The head of Internal
Audit Team reports to the Chairman of the Audit Committee for the
purpose of maintaining independence and Internal Audit Reports are
placed before the Audit Committee together with statement of
significant audit observation and the suggested corrective action
followed by a report on action taken thereon.
VIGIL MECHANISM
The Company has a whistle blower policy and a vigil mechanism for
directors and employees to report genuine concerns in the prescribed
manner. The vigil mechanism provides adequate safeguards against
victimisation and for direct access to the Chairman of the Audit
Commitee in appropriate or exceptional cases. The details of the
whistle blower policy are posted on the website of the Company. No
complaint has been received under this mechanism during the year under
review.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors Certificate with respect to its
compliance forms part of this Report. Adetailed Management Discussion
and Analysis Report also forms part of this Report.
OTHER DISCLOSURES UNDER THE COMPANIES ACT 2013
i) Extract of Annual Return
Extract of the Annual Return is given in Annexure-B.
ii) Changes in Share Capital
There has been no change in the share capital during the financial year
2014-15.
iii) Policy on Directors' Appointment and Remuneration
The Company's policy for selection and appointment of directors, senior
management personnel and fixation of their remuneration, including
criteria for determining qualifications, positive attributes,
independence of a director, are given in Annexure-C.
iv) Related Party Transactions
All the related party transactions are at arm's length basis and have
taken place in the ordinary course of business. Omnibus approval of the
Audit Committee is obtained for the transactions which are foreseen and
repetitive in nature. A statement of all related party transactions is
placed before the Audit Committee on quarterly basis.
The Related Party Transactions Policy as approved by the Board is
uploaded on the Company's website www.sakthisugars.com.
The details of the transactions with Related Party are provided in the
accompanying financial statements.
v) Statement of declarations given by Independent Directors
The Independent Directors have given declarations to the Board to the
effect that they meet with the criteria of independence as provided in
Section 149(6) of the Companies Act 2013 and the relevant rules.
vi) Significant material orders passed by court or authorities
There are no significant orders passed by Court or regulatory
authorities which would impact the status of the Company and its future
operations.
vii) Particulars of loans, guarantees or investments
The Company has not given any loan or guarantee or has acquired any
security during the financial year 2014-15 under Section 186 of the
Companies Act 2013.
viii) Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo The information on conservation of energy,
technology absorption and foreign exchange earnings and outgo as
required under Section 134(3)(m) of the Companies Act 2013 read with
Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-D.
ix) There are no material changes affecting the financial position of
the Company which has occurred between the end of the financial year
and the date of this report.
STATUTORY AUDITORS
Pursuant to Section 139(1) of the Companies Act 2013 and Rule 6 of the
Companies (Audit and Auditors) Rules, the members of the Company have
appointed M/s.P.N.Raghavendra Rao & Co., Chartered Accountants,
Coimbatore, as Statutory Auditors of the Company for a period of three
consecutive years commencing from the conclusion of the 52nd Annual
General Meeting of the Company upto the Conclusion of the 55th Annual
General Meeting, subject to ratification at the Annual General Meeting
(AGM) each year. Necessary resolution in this regard is included in the
Notice for the ensuring AGM.
SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act 2013, the Board of
Directors of the Company has appointed M/s. S.Krishnamurthy & Co.,
Company Secretaries, Chennai as Secretarial Auditors to undertake the
secretarial audit of the Company. Secretarial Audit Report of M/s.
S.Krishnamurthy & Co., Company Secretaries, Chennai is annexed as
Annexure-E.
COST AUDIT
M/s. STR & Associates, Cost & Management Accountants, Tiruchirapalli,
are the Cost Auditors for auditing the cost accounting records relating
to Sugar, Industrial Alcohol, Power and Soya Divisions of the Company
for the year ended 31st March 2015. The said Firm has been appointed
for the financial year ending 31st March 2016 and necessary resolution
for ratification of their remuneration is included in the Notice for
the ensuing Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135 of the Companies Act 2013 and
Schedule VII there to, the Company has constituted a CSR Committee and
has adopted a CSR Policy. As the Company has incurred loss for the
three preceding financial years, the requirement of incurring
expenditure towards fulfillment of its corporate social responsibility
did not arise during the financial year under review.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of The Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressed) Act 2013. An Internal Complaints
Committee (ICC) has been set up at every work place to redress
complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary, trainees) are covered under this
policy.
No sexual harassment complaint has been received during the financial
year 2014-15.
AUDITORS REPORT
With reference to the Statutory Auditors' remarks, your Directors wish
to state that the unprovoked interest and guarantee commission to the
holding company will be accounted subject to the approval of the CDR
Empowered Group.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
Coimbatore M MANICKAM
8th August 2015 Executive Chairman
Mar 31, 2014
Dear Members
The Directors present their Annual Report together with the audited
financial statements of the Company for the year ended 31st March 2014.
FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2014 (Rs.in lakhs)
Profit before finance cost and depreciation
& amortization expense 1791.45
Less: Finance cost 18590.93
Depreciation & amortization expense 6638.21
(25229.14)
Profit/(Loss) before Tax (23437.69)
Less: Income Tax expenses:
Deferred Tax (7499.36)
Profit /(Loss) after Tax (15938.33)
Surplus from last year (11464.08)
Closing balance (27402.41)
REVIEW OF OPERATIONS
The decrease in quantum of cane crushed, uneconomical prices for sugar
and power coupled with high sugarcane price had adverse impact on the
financial results of the Company.
SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during
the year 2013-14 is as under:
Name of the Units Cane crushed (in tonnes)
Sakthinagar : 7,61,395
Sivaganga : 4,10,435
Modakkurichi : 1,48,341
Dhenkanal : 3,33,651
During the year under review, 1.47 lakhs MT of sugar was produced by
the Company. There is substantial reduction in production as compared
to the previous year due to reduced level of cane availability owing to
drought condition.
DISTILLERY DIVISION
During the year under review, 277.01 lakh litres of industrial alcohol
was produced at Sakthinagar Distillery Unit and 77.32 lakh litres at
Dhenkanal Distillery Unit.
SOYA DIVISION
22,780 tonnes of soya bean was crushed in the soya plant during the
year under review. This division had exported products worth Rs.2454.90
lakhs to various countries.
CO-GENERATION DIVISION
The total power generated in the co-generation plants during the year
was 1614.96 lakh units out of which 944.89 lakh units of power was
exported to Tamilnadu Electricity Board.
FUTURE OUTLOOK
The outlook of Indian Sugar Industry continues to be bleak. Sugar
industry, the last one to be freed though not fully from Government
regulations, is yet to get adjusted to the market equilibrium.
The sugar season 2014-15 may end in surplus production over consumption
on all India basis and as such the realization on sugar may not improve
without Government initiatives. The incentive announced by the Central
Government for export of raw sugar is a step in the right direction to
reduce the surplus. The steps intended to be taken by the Central
Government like increase in duty on import of raw sugar and interest
free loans for payment of arrears of cane will definitely help the
industry to look up. It is hoped that appropriate measures will be
taken by the Government for the survival of the dwindling sugar
industry.
The Company expects a marginal drop in the quantity of cane crush
during the current year as compared to the previous financial year.
The drop in cane crush will have impact on the performance of the
distillery and co-gen division due to reduced availability of molasses
and bagasse.
The Company continues to be under the Corporate Debt Restructuring
Scheme with respect to restructuring of its secured debts availed from
Banks/Financial Institution. Since servicing of the loans from most of
the Banks have become irregular/Non-performing assets, the Company has
approached the CDR Forum for a second re-schedulement of the repayment
terms.
DEPOSITS
The Company has not accepted any deposit from public during the year
under review. At the end of the financial year, 7 deposits amounting to
Rs.1.15 lakhs (including interest) which were due for repayment
remained unclaimed on their due dates.
CORPORATE ACTION
During the financial year under review, the Company has issued and
allotted 5,94,05,940 equity shares at a price of Rs.30.30 per share on
preferential basis to A B T Limited, a company belonging to the
Promoter Group, against the sum of Rs.180 crores brought in by that
company, in terms of the Corporate Debt Restructuring Scheme approved
by the CDR Empowered Group. This amount has been utilized for repayment
of loans and payment of interest to banks as envisaged in the CDR
package. After this allotment the Company has become subsidiary of A B
T Limited.
A draft Scheme of Arrangement with the holders of FCCB (Series B) for
settling their over dues aggregating to USD 15.6 million has been
approved by the Board of Directors and necessary applications have been
made to Stock Exchanges for approval as required under Listing
Agreement. This Scheme is subject to the approval of the stock
exchanges, SEBI, RBI and shareholders and bond holders of the Company,
and sanctioning of the Scheme by the High Court of Judicature at
Madras.
The Board of Directors at its meeting held on 14th August 2014 has
approved voluntary delisting of the equity shares of the Company from
Madras Stock Exchange for the reason that the said Exchange has
submitted application to SEBI for voluntary exit as a Stock Exchange.
Necessary application will be made by the Company to Madras Stock
Exchange in this regard. The equity shares of the Company continue to
remain listed on Bombay Stock Exchange and National Stock Exchange.
DIRECTORS
IDBI Bank has withdrawn Sri V.M.Manogaran as its nominee on the Board
of Directors of the Company effective from 1.2.2014 and in his place
nominated Sri T.A.Ganesh. Sri S.Doreswamy, Director, resigned from the
Board on personal grounds on 24.3.2014. The Directors place on record
their appreciation of the valuable services rendered by Sri
V.M.Manogaran and Sri S.Doreswamy during the tenure of their office as
Directors of the Company.
With effect from 28.6.2013, Dr.M.Manickam was redesignated as Executive
Vice Chairman and Sri M.Srinivaasan as Joint Managing Director.
Sri M.Balasubramaniam has been appointed as Managing Director of the
Company and Sri M.Srinivaasan has been re-appointed as Joint Managing
Director with effect from 28.6.2013 and 23.1.2014 respectively for a
period of 5 years subject to the approval of the Central Government.
The Board has re-appointed Dr.M.Manickam as Executive Vice Chairman for
a period of five years from 25.10.2014, subject to the approval of
Banks, financial institution, as may be required, and of the members of
the Company and Central Government.
The following Directors retire by rotation at the ensuing Annual
General Meeting and are eligible for reappointment:
1. Sri P.K.Chandran
2. Sri M.Balasubramaniam
3. Sri C.Rangamani
Pursuant to Section 149 of the Companies Act, 2013 and the Listing
Agreement, the Board has recommended appointment of Sri C.Rangamani,
Sri P.K.Chandran, Sri S.S.Muthuvelappan and Sri N.K.Vijayan, existing
Independent Directors, as Independent Directors by the shareholders at
the ensuing Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' responsibility statement, it is
hereby confirmed:
a. that in the preparation of the annual accounts for the financial
year ended 31.3.2014, the applicable accounting standards had been
followed;
b. that the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the loss of the
Company for the year under review;
c. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
d. that the Directors had prepared the annual accounts on a going
concern basis.
AUDIT COMMITTEE
The Audit Committee was reconstituted on 11.2.2014 and 30.5.2014 on
account of change in nominee of IDBI Bank and resignation of Sri
S.Doreswamy. At present the Audit Committee comprises the following
Directors as its members:
1. Sri C Rangamani, Chairman
2. Sri M Balasubramaniam
3. Sri N.K.Vijayan, and
4. Sri T.A.Ganesh
SUBSIDIARY COMPANIES
The performance of the auto component manufacturing units in India and
in Portugal namely Sakthi Auto Component Limited, Sakthi Auto Ancillary
Private Limited and Sakthi Portugal SA is satisfactory.
Pursuant to the general direction given by the Central Government, vide
general circular dated 8th February 2011, and the consent given by the
Board of Directors of the Company in terms of the said circular, copies
of the Balance Sheet, Statement of Profit and Loss, Reports of the
Board and of the Auditors, as the case may be, of the following
subsidiary companies, viz. Sakthi Auto Component Limited, Sakthi Auto
Ancillary Pvt Limited, Orlandofin BV, Sakthi Services GmbH, Sakthi
Portugal SA and Sakthi Auto Mauritius Limited have not been attached to
the Balance Sheet of the Company as at 31st March 2014. The
consolidated financial statement and the details of the subsidiaries
that are required to be provided under the said circular have been
separately furnished forming part of the Annual Report. The annual
accounts of the subsidiary companies and the related detailed
information on the accounts of the subsidiary companies will be made
available to the shareholders of the company and of the subsidiary
companies on specific request at any point of time. The Annual Accounts
of the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and of the
subsidiary companies concerned. The details of the accounts of the
above subsidiary companies are also provided in the Company''s website.
During the financial year under review Sakthi Netherlands BV and Sakthi
European Foreign Sales Corporation BV have been deregistered and the
application for deregistration filed by Sakthi Holdings BV is pending
disposal by the concerned authority.
In terms of Accounting Standard 21 relating to consolidated financial
statements, accounts of the following subsidiaries, viz. Sakthi Europe
Verwaltungs GmbH, Arvika Gjuteri AB, Arvinova AB, Arvika Handforming
Gjuteri AB and Sakthi Sweden AB, are not consolidated since there is a
long term restriction in the flow of cash from these subsidiaries to
the holding company as the said subsidiaries are under the control of
the Administrators appointed by the respective Courts in Germany and
Sweden.
The Company holds 65% of the equity shares of Sakthi Auto Component
Limited (SACL). As per the definition of subsidiary company under the
Companies Act 2013, convertible preference shares should also be taken
into consideration for determining the subsidiary status. Pursuant to
the change in the definition, SACL has become an Associate Company and
not a subsidiary company with effect from 1st April 2014. In view of
this, the Indian and European step down subsidiaries of SACL are also
not subsidiaries of the Company from that date.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors Certificate with respect to its
compliance forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the Listing
Agreement is given in the section on Corporate Governance.
AUDITORS
M/s. P.N.Raghavendra Rao & Co., Chartered Accountants, the Statutory
Auditors of the Company, retire at the conclusion of the forthcoming
Annual General Meeting and being eligible, have offered themselves for
re-appointment for a period of three consecutive years from the
conclusion of the ensuing Annual General Meeting, pursuant to Section
139(2) of the Companies Act, 2013 read with Rule 6 (3) of the Companies
(Audit and Auditors) Rules 2014. As required under the Proviso to
Section 139(1) of the Companies Act 2013, the Company has obtained the
written consent and certificate from M/s. P N Raghavendra Rao & Co. to
the effect that their appointment, if made, will be in accordance with
the conditions prescribed and that they satisfy the eligibility
criteria provided in the said Act and Rules.
COST AUDIT
M/s. STR & Associates, Cost Accountants, Tiruchirapalli, are the Cost
Auditors for auditing the cost accounts relating to Sugar, Industrial
Alcohol, Power and Soya Divisions of the Company for the year ended
31st March 2014. The due date of filing the Cost Audit Report is 27th
September 2014.
The same firm has been reappointed as Cost Auditors for Sugar,
Industrial Alcohol, Power and Soya Divisions of the Company for the
financial year ending 31st March 2015. The remuneration to the Cost
Auditors for the said financial year is subject to ratification by the
shareholders in the ensuing Annual General Meeting.
For the year ended 31st March 2013, the due date for filing cost audit
report for the Sugar, Industrial Alcohol and Power Divisions in XBRL
mode, was 27th September 2013. The actual date of filing the cost audit
reports was 27th September 2013.
CONSERVATION OF ENERGY
a) Energy Conservation measures taken:
In Sakthinagar, Grid separator system was provided in boiler to collect
the un-burnt fly ash before APH and re-fire it in boiler furnace to
improve the boiler efficiency.
b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
No significant investment is envisaged.
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Increase in efficiency of boiler resulting in reduction in cost of
fuel.
Particulars regarding consumption of energy, research and development,
technology absorption and foreign exchange earnings and outgo have been
provided in Annexure 1 to the Report.
PARTICULARS OF EMPLOYEES
The Company has no employee drawing remuneration attracting the
provisions of section 217(2A) of the Companies Act, 1956.
AUDITORS'' REPORT
With reference to the Auditors'' remarks, your Directors wish to state
that (i) the entire funded interest under the CDR Scheme included in
Other Non-Current Assets will be written off during the financial year
ending 31st March 2015 in four equal quarterly instalments; and (ii)
the unprovided interest and guarantee commission to the holding company
will be accounted subject to the approval of the CDR Empowered Group.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
Coimbatore N MAHALINGAM
14th August 2014 Chairman
Mar 31, 2013
To the Members
The Directors present their Annual Report together with the audited
financial statements of the Company for the year ended 31st March 2013.
FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2013
(Rs.in lakhs)
Profit before finance cost and
depreciation & amortization expense 8530.95
Less: Finance cost 13680.63
Depreciation & amortization expense 6598.08
20278.71
Profit/Loss before Tax -11747.76
Less: Income Tax expenses:
Deferred Tax -3005.37
Profit /Loss after Tax -8742.39
Surplus from last year -2721.69
Closing balance -11464.08
SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during
the year 2012-13 is as under:
Name of the Units Cane crushed (in tonnes)
Sakthinagar 1519411
Sivaganga 587973
Modakurichi 610715
Dhenkanal 338222
During the year under review, 2.86 lakhs MT of sugar was produced by
the Company. This is marginally higher than the production level for
the previous year.
During the year under review, 360.07 lakh litres of industrial alcohol
was produced at Sakthinagar Distillery Unit and 70.03 lakh litres at
Dhenkanal Distillery Unit.
SOYA DIVISION
19320 tonnes of soya bean was crushed in the soya plant during the year
under review. This division has exported products worth Rs. 2937.80
lakhs to various countries.
CO-GENERATION DIVISION
The total power generated in the co-generation plants during the year
was 3087.36 lakh units out of which 1961.98 lakh units of power was
exported to Tamilnadu Electricity Board.
Even though there is increase in quantum of sales and realization, they
are not commensurate with the increase in cost of production. In view
of this, the financial performance of the company is not as expected.
FUTURE OUTLOOK
The Central Government''s announcement of partial decontrol of sugar
industry is expected to have positive impact and will help the mills in
getting better realization on sugar. The prevailing drought condition
may result in reduction in availability of sugar cane.
The performance of the Distillery Division and the Co-generation
Division of the Company are expected to be satisfactory for the current
year.
The Company continues to be under the Corporate Debt Restructuring
Scheme with respect to restructuring of its secured debts availed from
Banks/Financial Institution.
DEPOSITS
The Company has not accepted any deposit from public during the year
under review. At the end of the financial year, 13 deposits amounting
to Rs. 3.00 lakhs (including interest) which were due for repayment
remained unclaimed on their due dates.
DIRECTORS
The following Directors retire by rotation at the ensuing Annual
General Meeting and are eligible for reappointment:
1. Sri M Srinivaasan
2. SriNKVijayan
3. Sri S Doreswamy
DIREC TORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' responsibility statement, it is
hereby confirmed:
a. that in the preparation of the annual accounts for the financial
year ended 31.3.2013, the applicable accounting standards had been
followed;
b. that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
loss of the Company for the year under review;
c. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
d. that the Directors had prepared the annual accounts on a going
concern basis.
The Audit Committee was reconstituted on 20.9.2012 and at present the
Audit Committee comprises the following Directors as its members:
1. Sri CRangamani, Chairman
2. Sri S Doreswamy
3. Sri M Balasubramaniam
4. Sri V M Manogaran and
5. SriNKVijayan
SUBSIDIARY COMPANIES
The performance of the auto component manufacturing units in India and
in Portugal namely Sakthi Auto Component Limited, Sakthi Auto Ancillary
Private Limited and Sakthi Portugal SAis satisfactory.
With a view to simplify the organisation structure in Europe and to
reflect the real value, the investment in Sakthi Portugal SAhas been
revalued at Euro 136.55 million. The shares held by Sakthi Netherlands
BV in Sakthi Services GmbH were transferred to Orlandofin BV in April
2013. As a part of the restructuring activity, the step down
subsidiaries in Netherlands, viz. Sakthi Netherlands BV, Sakthi
European Foreign Sales Corporation BV and Sakthi Holdings BV have
proposed for liquidation outside insolvency.
Sakthi Auto Component Limited has allotted equity shares aggregating to
Rs. 54.39 crores at par by converting 54,38,616 Participatory
Convertible Preference Shares of Rs. 100 each to the holders of the
said Preference Shares, including equity shares of nominal value of Rs.
20 crores to the Company, after the date of Balance Sheet. In view of
this the shareholding percentage of the Company in Sakthi Auto
Component Limited has been reduced to 65%.
Pursuant to the general direction given by the Central Government, vide
general circular dated 8th February 2011, and the consent given by the
Board of Directors of the Company in terms of the said circular, copies
of the Balance Sheet, Statement of Profit and Loss, Reports of the
Board and of the Auditors, as the case maybe, of the following
subsidiary companies, viz. Sakthi Auto Component Limited, Sakthi Auto
Ancillary Pvt Limited, Orlandofin BV, Sakthi Netherlands BV, Sakthi
European Foreign Sales Corporation BV, Sakthi Holdings BV, Sakthi
Services GmbH, Sakthi Portugal SAand Sakthi Auto Mauritius Limited have
not been attached to the Balance Sheet of the Company as at 31st March
2013. The consolidated financial statement and the details of the
subsidiaries that are required to be provided under the said circular
have been separately furnished forming part of the Annual Report. The
annual accounts of the subsidiary companies and the related detailed
information on the accounts of the subsidiary companies will be made
available to the shareholders of the company and of the subsidiary
companies on specific request at any point of time. The Annual Accounts
of the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and of the
subsidiary companies concerned. The details of the accounts of the
above subsidiary companies are also provided in the Company''s website.
In terms of Accounting Standard 21 relating to consolidated financial
statements, accounts of the following subsidiaries, viz. Sakthi Europe
Verwaltungs GmbH, Arvika Gjuteri AB, Arvinova AB, Arvika Handforming
Gjuteri AB and Sakthi Sweden AB, are not consolidated since there is a
long term restriction in the flow of cash from these subsidiaries to
the holding company as the said subsidiaries are under the control of
the Administrators appointed by the respective Courts in Germany and
Sweden.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors Certificate with respect to its
compliance forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSE REPORT
Management Discussion and Analysis Report as required under the Listing
Agreement is given in the section on Corporate Governance.
AUDITORS
M/s. P.N.Raghavendra Rao & Co., Chartered Accountants, the Statutory
Auditors of the Company, retire at the conclusion of the forthcoming
Annual General Meeting and being eligible, have offered themselves for
re-appointment. As required under section 224(1 B) of the Companies Act
1956, the Company has obtained certificate in writing from M/s. P N
Raghavendra Rao & Co. to the effect that their appointment, if made,
will be within the limit prescribed in the said Section.
COST AUDIT
M/s. STR & Associates, Cost Accountants, Tiruchirapalli, are the Cost
Auditors for auditing the cost accounts relating to Sugar, Industrial
Alcohol, Power and Soya Divisions of the Company for the year ended
31s1 March 2013. The due date of filing the Cost Audit Report is 27th
September 2013. The same firm has been reappointed as cost Auditors for
Sugar, Industrial Alcohol, Power and Soya Divisions of the Company for
the financial year ending 31slMarch 2014.
For the year ended 31s1 March 2012, the due date for filing cost audit
report for the Sugar, Industrial Alcohol and Power Divisions in XBRL
mode, was 27th September 2012 or 28th February 2013 whichever is later.
The actual date of filing the cost audit reports was 30th January 2013.
CONSERVATION OF ENERGY
(a) Energy Conservation measures taken:
In Sakthinagar sugar mill, 3rd stage Raw Juice Heating is carried out
by 4lh Vapour of Quint instead of 3rd vapour through NBH Dynamic Juice
Heater.
Installation of VFD in Feed transfer pumps and Ash compressors in
Sakthinagar Cogeneration Unit.
Reduction of pump header pressure in the Raw water transfer pump by
reduction of 9 Ata extraction steam pressure for Distillery operation.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy: No significant investment is
envisaged.
(c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Consumption of steam for sugar process is reduced.
By using VFD in pressure control and speed control of Ash Handling
Compressor and Boiler feed transfer pump, there will be energy savings.
Reduction of pump header pressure leads to more extraction and more
power generation in turbine.
Particulars regarding consumption of energy, research and development,
technology absorption and foreign exchange earnings and outgo have been
provided in Annexure 1 to the Report.
PARTICULARS OF EMPLOYEES
The company has no employee drawing remuneration attracting the
provisions of section 217(2A) of the Companies Act, 1956.
AUDITORS'' REPORT
With reference to the Auditors'' remarks, your Directors wish to state
that as per the legal opinion obtained, the interest converted into
loan under the Corporate Debt Restructuring Scheme would be accounted
as and when they become payable.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
Coimbatore N MAHALINGAM
28th May 2013 Chairman
Mar 31, 2012
The Directors present their Annual Report together with the audited
financial statements of the Company for the year ended 31st March 2012.
FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2012
(Rs.in lakhs)
Profit before finance cost and depreciation
& amortization expense 13304.22
Less: Finance cost 12126.30
Depreciation & amortization expense 6528.39
18654.69
Profit before Tax (5350.47)
Less: Income Tax expenses:
Deferred Tax (578.81)
Profit after Tax (4771.66)
Add : Debenture Redemption Reserve withdrawn 551.71
Transfer from General Reserve 1498.26
2049.97
Closing balance (2721.69)
REVIEW OF OPERATIONS SUGAR DIVISION
The quantum of sugarcane crushed at various units of the Company during
the year 2011-12 is as under:
Name of the Units Cane crushed (in tonnes)
Sakthinagar : 1562243
Sivaganga : 550126
Modakurichi : 472696
Dhenkanal : 315565
During the year under review, 2.78 lakhs MT of sugar was produced by
the Company. As compared to the previous year, there is improvement in
the availability of sugarcane in general and the total cane crush by
the Company during the year was better than the previous year, which
was for 15 months.
DISTILLERY DIVISION
During the year under review 339.78 lakh litres of Industrial Alcohol
was produced at Sakthinagar Distillery Unit and 62.41 lakh litres at
Dhenkanal Distillery Unit.
SOYA DIVISION
26,072 tonnes of soya bean had been crushed in the Soya plant during
the year under review. This division has exported products worth Rs.
1984.47 lakhs to various countries.
CO-GENERATION DIVISION
The total power generated in the co-generation plant during the year
was 3393.77 lakh units out of which 2244.17 lakh units were exported to
Tamilnadu Electricity Board and others.
FUTURE OUTLOOK
For the next season 2012-13, sugarcane availability is expected to be
higher than the current year leading to increased sugar production in
the country. This may impact the selling price of sugar. However, the
Central Government's policy of allowing export of sugar will help the
Indian sugar industry to certain extent. The Company expects to crush
higher quantity of cane during the current year compared to the
previous year.
The performance of the Industrial Alcohol Division and the Power
Division of the Company are expected to be satisfactory for the current
year with higher availability of molasses and bagasse.
The Company continues to be under the Corporate Debt Restructuring
Scheme with respect to restructuring of its secured debts availed from
Banks/Financial Institution.
DEPOSITS
The Company has not accepted any deposit from public during the year
under review. At the end of the financial year, 21 deposits amounting
to Rs. 5.11 lakhs (including interest) which were due for repayment
remained unclaimed on their due dates. Of these, 2 deposits amounting
to Rs.0.44 lakh have since been repaid.
DIRECTORS
The Directors regret to report that Sri G G Gurumurthy, Director,
expired on 26.6.2011. He was a Director on the Board for a period of
about 28 years. The Directors place on record their appreciation of the
valuable services rendered by him during the tenure of his office as
Director of the Company.
The following Directors retire by rotation at the ensuing Annual
General Meeting and are eligible for reappointment:
1. Sri M Balasubramaniam
2. Sri C Rangamani
3. Sri S S Muthuvelappan
The Board of Directors at its meeting held on 29th September, 2011 has
reappointed Dr M Manickam as Managing Director of the Company for a
period of five years from 25th October, 2011, subject to the approval
of members and the Central Government.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' responsibility statement, it is
hereby confirmed:
a. that in the preparation of the annual accounts for the financial
year ended 31.3.2012, applicable accounting standards had been
followed;
b. that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
Loss of the Company for the year under review;
c. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
d. that the Directors had prepared the annual accounts on a going
concern basis.
AUDIT COMMITTEE
The Audit Committee comprises of the following Directors as its
members:
1. Sri C Rangamani, Chairman
2. Sri S Doreswamy
3. Sri M Balasubramaniam and
4. Sri V M Manogaran
SUBSIDIARY COMPANIES
The auto industry globally is performing well. The performance of both
Indian and European subsidiaries having manufacturing facilities, viz.
Sakthi Auto Component Limited, Sakthi Auto Ancillary Private Limited
and Sakthi Portugal SA, have shown considerable improvement as compared
to the previous year. It is expected that the growth in the performance
will continue in the current year also.
Pursuant to the general direction given by the Central Government, vide
general circular dated 8th February 2011, and the consent given by the
Board of Directors of the Company in terms of the said circular, copies
of the Balance Sheet, Statement of Profit and Loss, Reports of the
Board and of the Auditors, as the case may be, of the following
subsidiary companies, viz. Sakthi Auto Component Limited, Sakthi Auto
Ancillary Pvt Limited, Orlandofin BV, Sakthi Netherlands BV, Sakthi
European Foreign Sales Corporation BV, Sakthi Holdings BV, Sakthi
Services GmbH, Sakthi Portugal SA and Sakthi Auto Mauritius Limited
have not been attached to the Balance Sheet of the Company as at 31st
March 2012. The consolidated financial statement and the details of the
subsidiaries that are required to be provided under the said circular
have been separately furnished forming part of the Annual Report. The
annual accounts of the subsidiary companies and the related detailed
information on the accounts of the subsidiary companies will be made
available to the shareholders of the Company and of the subsidiary
companies on specific request at any point of time. The Annual Accounts
of the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and of the
subsidiary companies concerned. The details of the accounts of the
above subsidiary companies are also provided in the Company's website.
In terms of Accounting Standard 21, accounts of the following
subsidiaries, viz. Sakthi Europe Verwaltungs GmbH, Arvika Gjuteri AB,
Arvinova AB, Arvika Handforming Gjuteri AB and Sakthi Sweden AB, are
not consolidated since there is a long term restriction in the flow of
cash from these subsidiaries to the holding company as the said
subsidiaries are under the control of the Administrators appointed by
the respective Courts in Germany and Sweden.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors Certificate with respect to its
compliance forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the Listing
Agreement is given in the section on Corporate Governance.
AUDITORS
M/s P.N.Raghavendra Rao & Co., Chartered Accountants , Statutory
Auditors of the Company, retire at the conclusion of the forthcoming
Annual General Meeting and being eligible, have offered themselves for
re-appointment. As required under Section 224(1B) of the Companies Act
1956, the Company has obtained certificate in writing from M/s. P N
Raghavendra Rao & Co. to the effect that their appointment, if made,
will be within the limit prescribed in the said Section.
COST AUDIT
M/s STR & Associates, Cost Accountants, Trichirapalli, are the Cost
Auditors for auditing the cost accounts relating to Sugar, Industrial
Alcohol and Power Divisions of the Company for the year ended 31st
March 2012. The due date of filing the Cost Audit Report is 27th
September 2012. The same firm has been reappointed as Cost Auditors for
Sugar, Industrial Alcohol, Power and Soya Divisions for the financial
year ending 31st March 2013.
For the year ended 31st March 2011, the due date for filing cost audit
reports for the Sugar, Industrial Alcohol and Power Divisions of the
Company was 27th September 2011, and the actual date of filing the cost
audit reports was 24th September 2011.
CONSERVATION OF ENERGY
(a) Energy conservation measures taken:
Use of Integrated Evaporation System along with multi pressure
distillation system in the Distillery at Sakthinagar.
In Sakthinagar sugar mill, 3rd vapour is utilized instead of 1st vapour
at filtrate juice clarifier for filtrate juice heating.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
No significant investment is envisaged.
(c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Integrated Evaporation System reduces generation of effluent
considerably and consumption of steam per litre of alcohol gets
reduced.
There will be reduction in the requirement of steam in the
manufacturing process of sugar.
Particulars regarding consumption of energy, research and development,
technology absorption and foreign exchange earnings and outgo have been
provided in Annexure 1 to the Report.
PARTICULARS OF EMPLOYEES
The Company has no employee drawing remuneration attracting the
provisions of section 217(2A) of the Companies Act, 1956.
AUDITORS REPORT
With reference to the Auditors' remarks, your Directors wish to state
that as per the legal opinion obtained, the interest converted into
loan under the Corporate Debt Restructuring Scheme would be accounted
as and when they become payable.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
Coimbatore N MAHALINGAM
30th May 2012 Chairman
Mar 31, 2011
To the Members
The Directors present their Annual Report together with the audited
financial accounts of the Company for the year ended 31st March 2011
consisting a period of 15 months.
FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2011 (Rs. in lakhs)
Profit before interest and depreciation 9249.54
Less: Interest Charges 18165.43
Depreciation on Fixed Assets 3878.48
22043.91
Profit before Tax (12794.37)
Less: Income Tax Expenses:
Deferred Tax (2808.48)
Profit after Tax (9985.89)
Add: Surplus from Previous year 5721.79
Debenture Redemption Reserve withdrawn 494.29
Transfer from General Reserve 3769.81
9985.89
Surplus/Deficit carried over -
REVIEW OF OPERATIONS
SUGAR DIVISION
The quantum of sugar cane crushed and raw sugar processed at various
units of the Company during the year 2010-11 is as under:
Name of the Units Cane crushed Raw sugar processed
(in tonnes) (in tonnes)
Sakthinagar Unit 1549498 77126
Sivaganga Unit 491845 22088
Modakurichi Unit - 181712
Dhenkanal Unit 314960 55612
Due to shortage of cane, Modakurichi Unit did not take up the crushing
operation during the year under review. Sugar cane crushed in
Sakthinagar Unit includes sugar cane drawn from areas of Modakurichi
Unit.
Out of the total sugar of 5.37 lakhs MT produced by the Company during
the year under review, 3.14 lakhs MT of sugar was produced by
processing of Raw sugar.
DISTILLERY DIVISION
During the year under review, 490.77 lakh litres of industrial alcohol
was produced at Sakthinagar Distillery Unit and 86.06 lakh litres at
Dhenkanal Distillery Unit.
The Company has not produced ethanol as the ethanol blending programme
has not been implemented in the State of Tamilnadu.
SOYA DIVISION
27995 tonnes of soya bean has been crushed in the Soya plant during the
year under review. This division has exported products worth Rs.2336.54
lakhs to various countries.
CO-GENERATION DIVISION
The total power generated in the co-generation plant by the Company
during the year was 5640 lakh units out of which 4205 lakh units have
been exported to Tamilnadu Electricity Board and others. The
implementation of the second co-generation plant with 25 MW capacity at
Sakthinagar is delayed and is expected to be commissioned in the
current year.
Sakthinagar unit has been awarded first prize for best co-generation in
Tamilnadu region for 2009-2010 by the South Indian Sugar Cane and Sugar
Technologists Association, Chennai.
FUTURE OUTLOOK
For the year 2011 -12, cane availability is expected to be slightly
better than the year 2010-11 on account of increase in planting of
sugarcane in the command areas. The country's total production of sugar
during the season 2011-12 is estimated to be higher than last season.
This may lead to reduction in the selling price of sugar. Besides
Government policies, the global demand-supply trends will also have an
impact in the financial performance of the Indian sugar industry.
The performance of the Industrial Alcohol Division and Power Division
of the Company are expected to be satisfactory for the current year.
The Company continues to be under the Corporate Debt Restructuring
Scheme with respect to restructuring of its secured debts availed from
Banks/Financial Institution.
DEPOSITS
The Company has not accepted any deposit from the public during the
year under review. At the end of the financial year, 46 deposits
amounting to Rs.10.45 lakhs (including interest) which were due for
repayment remained unclaimed on their due dates. Of these, 4 deposits
totalling Rs. 0.59 lakh have since been repaid.
DIRECTORS
The following Directors retire by rotation at the ensuing Annual
General Meeting and are eligible for reappointment:
1. Sri S Doreswamy
2. Sri V K Swaminathan
3. Sri P K Chandran
Sri T Santhanakumar was appointed by IDBI Bank as its nominee director
in the place of Smt S Usha with effect from 21.10.2010. His nomination
was withdrawn effective from 28.5.2011 and in his place Sri V M
Manogaran has been appointed as Nominee Director. Your directors wish
to place on record the appreciation of the services rendered by Smt S
Usha and Sri T Santhanakumar during the tenure of their office as
Directors of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' responsibility statement, it is
hereby confirmed:
a. that in the preparation of the annual accounts for the financial
year ended 31.3.2011 the applicable accounting standards had been
followed;
b. that the Directors had selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
Loss of the company for the year under review;
c. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
d. that the Directors had prepared the annual accounts on a going
concern basis.
AUDIT COMMITTEE
The Audit Committee was reconstituted on 10.11.2010 and 30.05.2011 on
account of the change in the Nominee Director of IDBI Bank Limited. At
present the Audit Committee comprises of the following Directors as its
members:
1. Sri C Rangamani, Chairman
2. Sri S Doreswamy
3. Sri M Balasubramaniam and
4. Sri V M Manogaran
SUBSIDIARY COMPANIES
The auto industry has turned around globally and is buoyant. There has
been significant improvement in the level of operation and performance
of both the Indian and European subsidiaries having manufacturing
facilities, viz. Sakthi Auto Component Limited, Sakthi Auto Ancillary
Private Limited and Sakthi Portugal S.A. The performance of these
subsidiaries in the current year is also expected to be encouraging.
On the application made by Tilan Sugar Limited (TSL), wholly owned
subsidiary of the Company, under Easy Exit Scheme 2010 announced by the
Central Government, the name of Tilan Sugar Limited (TSL) has been
struck off in the register maintained in the office of the Registrar of
Companies, Tamilnadu, Chennai and is dissolved with effect from
26.10.2010.
Pursuant to the general direction given by the Central Government, vide
general circular dated 8th February 2011, and the consent given by the
Board of Directors of the Company in terms of the said circular, copies
of the Balance Sheet, Profit and Loss Account, Reports of the Board and
of the Auditors, as the case may be, of the following subsidiary
companies, viz. Sakthi Auto Component Limited, Sakthi Auto Ancillary
Pvt Limited, Orlandofin BV, Sakthi Netherlands BV, Sakthi European
Foreign Sales Corporation BV, Sakthi Holdings BV, Sakthi Services GmbH
and Sakthi Portugal SA, have not been attached to the Balance Sheet of
the Company as at 31st March 2011. The consolidated financial ,
statement and the details of the subsidiaries that are required to be
provided under the said circular have been separately furnished forming
part of the Annual Report. The related detailed information on the
accounts of the subsidiary companies will be made available to the
shareholders of the company and the subsidiary companies on specific
request at any point of time. The Annual Accounts of the subsidiary
companies will also be kept for inspection by the investors at the
Registered Office of the Company and that of the subsidiary companies
concerned. The details of the accounts of the above subsidiary
companies are also provided in the Company's website.
Since the following step down subsidiaries, viz. Sakthi Europe
Verwaltungs GmbH, Arvika Gjuteri AB, Arvinova AB, Arvika Handforming
Gjuteri AB and Sakthi Sweden AB, are under the control of the
Administrators appointed by the respective courts in Germany and in
Sweden and there is a long term restriction in the flow of cash from
these subsidiaries to the holding company, accounts of these companies
are not consolidated in accordance with the provisions contained in
Accounting Standard. In view of the dissolution of Tilan Sugar Limited,
the accounts of this company are also not consolidated.
During the year under review, Sakthi Auto Mauritius Limited in
Mauritius and Luscidco Holdings Co. Limited in Cyprus have become the
subsidiaries of the Company with effect from 26th January 2011. As
their financial year has ended prior to the date of acquisition, i.e.
on 31st December 2010, the accounts of these companies are not
consolidated.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors' Certificate with respect to its
compliance forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under Listing
Agreement is given in the section on Corporate Governance.
AUDITORS
M/s P.N.Raghavendra Rao & Co., Chartered Accountants, the Statutory
Auditors of the Company, retire at the conclusion of the Annual General
Meeting and being eligible, have offered themselves for re-appointment.
COST AUDIT
The Company appointed M/s STR & Associates, Cost Accountants, to audit
the cost accounts relating to Sugar Units, Industrial Alcohol units for
the year ended 31st March 2011 with the approval of the Central
Government. The same firm has been appointed as Cost Auditors for the
financial year ending 31st March 2012.
CONSERVATION OF ENERGY
(a) Energy Conservation measures taken:
Waste heat recovery system has been installed in TVP Plant in Soya
Division wherein condensate waste from dryer is collected and used to
pre-heat water used in extraction process.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy: Use of Variable Frequency Drives at
places wherever possible.
(c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Substantial savings in power consumption.
Particulars regarding consumption of energy, research and development,
technology absorption and foreign exchange earnings and outgo have been
provided in Annexure 1 to the Report.
PARTICULARS OF EMPLOYEES
The company has no employee drawing remuneration attracting the
provisions of section 217(2A) of the Companies Act, 1956.
AUDITORS REPORT
With reference to the Auditors remarks, your Directors wish to state
that as per the legal opinion obtained, the interest converted into
loan under the Corporate Debt Restructuring Scheme would be accounted
as and when they become payable.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
N MAHALINGAM
Chairman
Coimbatore
30th May 2011
Dec 31, 2009
The Directors present their Annual Report together with the audited
financial accounts of the Company for the year ended 31 st December
2009.
FINANCIAL RESULTS FOR THE YEAR
ENDED 31 ST DECEMBER 2009 (Rs. in lakhs)
Profit before interest and depreciation 20110.88
Less: Interest 4614.45
Depreciation on Fixed Assets 3025.71
7640.16
Profit before Tax 12470.72
Less : Income Tax Expenses
Prior Year Tax 65.16
Deferred Tax Liability 2056.92
2122.08
Profit after Tax 10348.64
Add : Excess provision reversed 1.15
Reversal of diminution in value of
investments 2.00
3.15
Profit before Appropriation 10351.79
Less : Transfer to General Reserve 4000.00
Transfer to Debenture Redemption Reserve 630.00
Surplus carried over 5721.79
REVIEW OF OPERATIONS
SUGAR DIVISION
The quantum of sugar cane crushed and raw sugar processed at various
units of the Company for the year 2009 is as under:
Name of the Units Cane crushed (in tonnes) Raw sugar processed (in
tonnes)
Sakthinagar 1448556 63469
Sivaganga 434550 49036
Modakurichi - 108589
Dhenkanal 162575 49968
Due to shortage of cane, Modakurichi Unit did not take up the crushing
operation. Sugar cane crushed in Sakthinagar Unit includes sugar cane
drawn from areas of Modakurichi Unit.
Out of the total sugar of 4.27 lakhs MT produced by the Company during
the year under review, 2.39 lakhs MT of sugar was produced by
processing raw sugar.
Your Directors are glad to inform that Sakthinagar Sugar Unit has been
selected for State Safety Award for two consecutive years 2006 and
2007. Orissa State Government has awarded State Safety Award to
Dhenkanal Sugar unit for the year 2007.
DISTILLERY DIVISION
During the year under review, 379.44 lakh litres of industrial alcohol
was produced at Sakthinagar Distillery Unit and 31.10 lakh litres at
Dhenkanal Distillery Unit.
The Company has not produced ethanol as the ethanol blending programme
has not been implemented in the State of Tamilnadu.
SOYA DIVISION
24497 tonnes of soya beans have been crushed in the soya plant during
the year under review. This division has exported products worth Rs.
1703.82 lakhs to various countries.
This unit has also been awarded State Safety Award for the years 2006
and 2007 and Industrial Relation Award for the years 2005,2006 and
2007.
CO-GENERATION DIVISION
The total power generated in the co-generation plants at Sakthinagar,
Sivaganga and Modakurichi during the year was 4,094 lakh units, out of
which 2,992 lakh units have been exported to Tamilnadu Electricity
Board and others. The second co-generation plant with 25 MW capacity at
Sakthinagar is expected to be commissioned in the current year.
FUTURE OUTLOOK
For the year 2010, the cane availability is expected to be slightly
lower than in 2009 on account of overall decrease in planting of
sugarcane in the command areas. The Government of Tamilnadu has allowed
sale of power to third parties and with the commissioning of the second
co-generation plant at Sakthinagar, higher contribution is envisaged.
The long term prices and profitability of Indian sugar companies would
be dependent on domestic and international supply demand trends as well
as Government policies. The performance of the Industrial Alcohol
Division and Power Division of the Company are expected to be good for
the current year.
The secured debts availed by the Company from Banks/Financial
Institution have been restructured during the year under review on the
terms contained in the Letter of Approval dated 16th June 2009 of the
CDR Cell.
DEPOSITS
The Company has not accepted any deposit from the public during the
year under review. At the end of the financial year, 96 deposits
amounting to Rs. 18.20 lakhs which were due for repayment remained
unclaimed on their due dates. Of these, 20 deposits totalling to Rs.
4.58 lakhs have since been repaid.
ISSUEOFSHARES
The Company has issued and allotted 34,60,569 equity shares during the
financial year by way of conversion of Foreign Currency Convertible
Bonds (FCCB) of USD 15.4 million. 19,73,704 equity shares were issued
and allotted after the end of the financial year 2009 until the date of
the Report by converting FCCB of USD 8.7 million. These shares were
allotted at the conversion price of Rs.208/Rs. 190, as the case may be,
in respect of Series A/ Series B Bonds in terms of the offering
circular.
DIRECTORS
The following Directors retire by rotation at the ensuing Annual
General Meeting and are eligible for reappointment.
Sri M Srinivaasan Sri S S Muthuvelappan Sri N KVijayan
Sri M Balasubramaniam was appointed as Joint Managing Director -
Finance for a period of 5 years with effect from 23.1.2009 subject to
the approval of Central Government since one of the conditions
prescribed in Schedule XIII to the Companies Act, 1956 was not
satisfied. Likewise the appointment of Sri M Srinivaasan as Joint
Managing Director - Technical for a period of 5 years with effect from
23.1.2009 is also subject to the approval of Central Government. The
approvals of the Central Government are yet to be received.
In view of the profitable working results for the year ended 31.12.2009
and also all the conditions prescribed in Schedule XIII to the
Companies Act, 1956 stand satisfied, the Board of Directors have
restricted the validity of the above appointments upto 31st March 2010
and have re-appointed Sri M Balasubramaniam as Joint Managing Director
- Finance and Sri M Srinivaasan as Joint Managing Director- Technical
for the period from 1.4.2010 to 22.1.2014, subject to the approval of
the members at the General Meeting.
DIRECTORS" RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors responsibility statement, it is
hereby confirmed:
a. that in the preparation of the annual accounts for the financial
year ended 31.12.2009 the applicable accounting standards had been
followed;
b. that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that 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 of the Company for the year under review;
c. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
d. that the Directors had prepared the annual accounts on a going
concern basis.
AUDIT COMMITTEE
The Audit Committee comprises of the following Directors, viz. Sri C
Rangamani (Chairman), Sri M Balasubramaniam, Sri S Doreswamy and Smt S
Usha.
SUBSIDIARY COMPANIES
India is not affected by the world recession as much as developed
economies especially in automobile industry. The performance of Sakthi
Auto Component Limited (SACL) and Sakthi Auto Ancillary Pvt. Limited
(SAAPL) (Indian Subsidiaries) is steady and improving.
Among the European Subsidiaries Sakthi Portugal S.A., has revived
registering improved production with increased volume of orders. It is
expected to reach the optimum production level in the current year with
good margins.
The subsidiaries in Germany except Sakthi Services GmbH, and in Sweden
have been declared bankrupt and Germany foundries are under the control
of the Administrator appointed by the court and foundry in Sweden has
been disposed off by the Administrator.
In terms of approval granted by the Central Government under section
212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profit
and Loss Account, Reports of the Board and the Auditors, as the case
may be, of the following subsidiary companies viz., Sakthi Auto
Component Limited, Sakthi Auto Ancillary Pvt. Limited, Tilan Sugar
Limited, Orlandofin BV, Sakthi Netherlands BV, Sakthi European Foreign
Sales Corporation BV, Sakthi Holdings BV, Sakthi Services GmbH and
Sakthi Portugal SA, have not been attached to the Balance Sheet of the
Company as at 31st December 2009. As directed by the Central
Government, the financial data of the subsidiaries have been separately
furnished forming part of the Annual Report. The related detailed
information of the accounts of the subsidiary companies will be made
available to the holding and subsidiary companies investors seeking
such information at any point of time. The Annual Accounts of the
subsidiary companies will also be kept for inspection by the investors
at the Registered Office of the Company and that of the subsidiary
companies concerned. The details of the accounts of the above
subsidiary companies are also provided in the Companys website.
Since the following subsidiaries viz., Sakthi Europe Verwaltungs GmbH,
Arvika Gjuteri AB, Arvinova AB, Arvika Handforming Gjuteri AB and
Sakthi Sweden AB are under the control of the Administrators appointed
by the respective Courts in Germany and Sweden and there is a long term
restriction in the flow of cash from these subsidiaries to the holding
company, these companies are not consolidated in accordance with the
provisions contained in Accounting Standard.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance along with Auditors Certificate of its compliance forms
part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the Listing
Agreement is given in the section on Corporate Governance.
AUDITORS
M/s P.N.Raghavendra Rao & Co., Chartered Accountants, the Statutory
Auditors of the Company, retire at the conclusion of the Annual General
Meeting and are eligible for re-appointment. A certificate under
section 224(1 B) has been obtained from them.
COST AUDIT
The Company has appointed M/s STR & Associates, Cost Accountants, to
audit the cost accounts relating to Sugar units and Industrial Alcohol
units for the year 2009 with the approval of the Central Government.
CONSERVATION OF ENERGY
(a) Energy Conservation measures taken:
Variable frequency drives are used for co-generation auxiliary cooling
water pump and for air compressor in co- generation plant and for high
pressure pump drive in RO plant at Modakurichi.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy: VFD for Injection pumps at sugar
plant in Modakurichi Unit.
(c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Substantial savings in power consumption.
Particulars regarding consumption of energy, research and development,
technology absorption and foreign exchange earnings and outgo have been
provided in Annexure 1 to the Report.
PARTICULARS OF EMPLOYEES
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules 1975 and forming part of this Report have been provided in
Annexure 2 to this Report.
AUDITORS REPORT
With reference to Auditors remarks, your Directors wish to state that
as per the legal opinion obtained, the interest converted into loan
under the Corporate Debt Restructuring Scheme would be accounted as and
when they become payable.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
valuable assistance and co-operation extended by the shareholders, cane
growers, banks, financial institutions and Government authorities. They
also wish to appreciate the dedicated services rendered by officers,
staff and workers of the Company.
On behalf of the Board of Directors
Coimbatore N MAHALINGAM
30th April 2010 Chairman
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