Director's Report To The Members, Your Directors ere pleased to present the 39th Annual Report of the Company together with the Audited Accounts for the year ended on 30th September 2011. Management Discussions & Analysis Operations The overall total sales turnover of the Company for the period under review stood at Rs. 3724.17 lacs in comparison to previous year at Rs.4269.64 lacs, recording a increase in turnover by more than 100 %. The production for the year was 2.15 Lac begs as against 1.78 Lac bags in earlier year. As shown in the chart given below the mill crushed 23.99 Lac qntls, of sugar cane during the year as against 20.72 Lac qntls crushed in previous year with a paltry increase in recovery by 0.36%. The performance was better as compared to previous year due to lower cost of cone and slightly better realization than last year Dividend In view of the loss incurred during the current year end brought forward losses, your directors do not recommend any dividend for the current year. Rehabilitation Scheme The Company is a sick industrial company within the meaning of section 3 (1] (o) of the Sick Industrial Companies (Special Provisions) Act, 1985. Hon'ble Board for Industrial and Financial Reconstruction (BIFR) had approved Rehabilitation Scheme vide their order dated 1st February, 2008 effective from 08.01.2008. The reliefs and concessions as envisaged under the scheme inter alia pertaining to availability of adequate cone hove not been implemented by The stole of U.R The meter has been under litigation since 2005 of various forums including BIFR State Govt., appellate authority. High Court. Finally the dispute came before the Hon'ble Supreme Court in SLP No. 13912 of 2005 and 27653 of 2009. However o divisional bench of two judges referred the mater to o larger bench of three judges. The matter is still pending. At the same lime the Uttlarakhand Govt. did not cancel the license granted lo a RAB plant of India Glycols lid. However India Glycols Limited have not run their RAB plant in the season 2010-11 and have also not run in the Seasons 2011-12. The other reliefs ore partially implemented but they ore not significant so as to make the plant viable under the rehabilitation scheme, State Govt., loan of Rs. 7.87 Crores was to be converted into subsidy. But the State Govt. has not implemented the same. Finance Due to inadequate availability the cane the Sugar unit of the Company has been working at a capacity utilization of around 30%, It is most unlikely that The Company shall get adequate Sugar Cane, At the some time with excessive higher cone price being fixed by me State Govt., and lower sugar realization the Company's financial condition is not likely to improve. The company has also taken a decision to deposit Central Excise duty on Sugar and molasses under protest pending decision by the appropriate court. The Company has not accepted any deposit from the public. Industry Outlook During the year, pricing of sugar cane continues to be vexatious issue. Despite the moderate increase in the SAP for the year 2010-11, cane cost per MT of sugar in the state is higher than the current realization in the domestic market. There had been uncertainty about availability of Sugar Cane from the erstwhile-reserved area in the Uttar Pradesh. Therefore bringing value additions through co-generation of power and manufacturing of Ethanol was not possible. Internal Control System and their Adequacy The company has proper and effective internal control system commensurate with size and scale of business to ensure that all controls, procedures and policies of are adhered to. Risks and Concerns 1. The Sugar industry is cyclical industry and its' performance is subject to climatic conditions like timely rainfall. The industry has been affected by drought and irregular rain on various occasions 2. The Central Government/State Government fixes the raw material cost of cane without referring it to prevailing sugar prices, 3. The sugar industry has to supply 10% of its production to Central Government as levy Quota at the predetermined prices. 4. Central Government may allow import of while/raw sugar of confessional rates of import duties, which will affect the sugar realization in domestic market. Directors In accordance with the provisions of the Companies Act, 1956 and Articles and Association of the Company Sri Om Narayan, Dr S.L. Keswani and Sri Sharad Sharma retires by rotation at ensuing Annual General Meeting of the Company and being eligible offer themselves for reappointment. Brief resumes of the directors being reappointed of the ensuing AGM is given in terms of clause 49 of tile listing agreement. Statutory Information The Particulars of Employees' remuneration under section 217(2A) of the Companies Act. 1956 The Company does not have any employee drawing remuneration warranting disclosure under Companies (Particulars of Employees) Rules, 1975. The information as required under section 217(1) (e) of the Companies Act. 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 is given in the annexure forming part of this report. Listing Equity Shares The Company securities are listed at the Stock Exchange, Mumbai (BSE), The Delhi Stock Exchange Association Ltd., Delhi and the U.R Stock Exchange Association Ltd. Kanpur. Report on Corporate Governance A separate report on corporate governance pursuant to clause 49 of listing agreement with Stock Exchange is separately given as part of Board Report. Directors Responsibility Statement Pursuant to the Provisions of Section 217(2AA) of the Companies Act, 1956 ( here in after referred as Act) your directors based on the representations made from the operating Management confirm that : (i) In preparation of the Annual Accounts the applicable Accounting Standards have been followed along with proper explanation relating to material departure. (ii) They have in selection of the accounting policies consulted the Statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so far as to give true and fair view of the state of affairs of the Company at the end of Financial Year and of the loss of the company for the period. (iii) They have taken proper and sufficient care to the best of their knowledge and ability 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. (iv) They have prepared the Annual Accounts on a 'going concern basis'. The required information in accordance with section 217(1)(e) of the companies Act, 1956 read with Companies (Disclosure of particulars in respect of Board of Directors) Rules 1988 is given in the annexure. Personnel Your directors sincerely appreciates the cordial and harmonious relations with the staff , workers and other employees through out the year. Audit Committee The Audit Committee of the Board of Directors as required U/S 292A of The Companies Act, 1956 consisting of The following Non-Executive and Independent Directors • Dr. S.L. Keswani • Sri Om Narayan Chairman • Sri Amit Khandelwal Auditors M/s. Mittal Gupta & Company, Chartered Accountants, the Statutory Auditors of the company will retire at the forth coming Annual General Meeting and being eligible offers themselves for reappointment Appreciation We take this opportunity to place on record our appreciation for the continued co-operation and help extended to us by the various Financial Institutions and Banks. The Board also appreciates the commitments and valuable contribution of all the employees in ensuring the smooth operation of the company. On behalf of The Board of Directors R.K. Agrawal Whole Time Directors Om Narayan Director Place : New Delhi Dated;29-11.2011 |