| The Directors are pleased to present the 38th Annual Report of the
Company together with the Audited Accounts for the year ended on 30th
September 2010.
Performance of the Company
Financial Results (Rupees in Lacs)
Particulars 2009-2010 2008-2009
Sales (Net of Returns) 4269.64 6595.80
Profit (Loss) before Depreciation
Interest and Tax (343.37) 256.83
Interest and Finance Charge 220.24 97.73
Less : Provision for Depreciation 298.39 300.44
Profit (Loss) Before Tax (862.00) (141.34)
Fringe Benefit Tax 0.00 (2.13)
Profit (Loss) After Tax (862.00) (143.47)
Profit/(Loss) B/F from earlier years (5430.62) (5287.15)
(Loss) carried to Balance Sheet (6292.62) (5430.62)
Management Discussions & Analysis Operations
The overall total sales turnover of your company for the period under
review stood at Rs 4269.64 Lacs as compared to previous year Rs 6595.80
Lacs, recording a decline in turnover by 35.26 %. The pro- duction of
sugar stood at 1.78 Lac quintals in 2009-10 as against 1.73 lac
quintals in last year . The company crushed 20.72 Lac Quintals of Sugar
Cane during the year as against 19.34 lac quintals in previous year.
Operational Performance
Particulars Sugar Season
2009-2010 2008-2009
Commencement of the crushing season 05.12.2009 21.11.2008
Closing of Crushing Season 10.03.2010 12.02.2009
Cane Crushed (Lac Qntls.) 20.72 19.34
Recovery (percent) 8.54 8.66
Sugar Production (Lac Qntsl.) 1.78 1.73
The Company continues to suffer on account of inadequate availability
of sugarcane.
Dividend
In view of the loss incurred during the current year and 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 Company has no outstanding term loans from banks/FIs. However, the
reliefs and concession as envisaged under the scheme, inter alia, from
State Government of U.P. and Uttaranchal are not being implemented in
totality by the respective State Governments. The company hope that the
same are allowed by the respective State Governments in terms of
direction by Hon'ble BIFR.
Finance
The cash flow remained under pressure because of cash losses
continuously incurred by the Company through out the year and
inadequate working capital availability. Sugar sale realization also
started declining from February 10 onwards and went down to even cost
of production.
Your directors are hope full that the Company will certainly come out
of the present phase and shall be able to make positive net worth in
the next coming years.
The Company has not accepted any deposit from the public. Industry
Outlook
Sugar Industry is highly regulated industry in India. Government of
India initiated reform process to decontrol the industry. The Decontrol
of Sugar Industry is serious discussion now.
During the year, Imports of White/Raw sugar was allowed by the
Government at zero import duty and without any export obligation.
During the year sugar production has been estimated at 19.00 million
tones against 14.5 million tones in 2008-09 by Indian Sugar Mills
Association. Country is expect to have closing stock of 6 million tones
against opening stock of 4.4 million tones.
Sugar Price took a sharp correction after achieving peak in early part
of year. The sugar prices went down to cost of production.
During the year, pricing of sugar cane continues to be vexatious issue.
Despite the moderate increase in the SAP for the year 2009-10, cane
cost per MT of Sugar in the State is higher than the current
realization in the domestic market.
There has been a drastic increase in the state advised price of sugar
cane during the year under report as compared to previous year. The
State Government announced SAP at Rs 197.00 per quintal for early
variety and Rs 192.00 for general verity as against Rs. 148.00 for
early variety and Rs 143 for general verity of cane during the year
2008-09. Though the sugar selling process were also increased during
early part of the year and there after the free sugar prices went down
the cost of production of sugar, resulting in loss to the company.
Future prospects of sugar industry looks reasonably good next year.
ISMA has projected sugar production of 23 million tones. However, the
raw material cost is expected to be low as compared to this year
resulting in positive margin from sugar operations
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 white/raw sugar of
concessional rates of import duties, which will affect the sugar
realization in domestic market.
Directors
Sri Sharad Sharma was appointed as additional Director by the Board of
Directors the Company in its meeting held on 29.11.2010.
Sri Sharma has the extensive experience in corporate affairs and
holding director ship in various companies.
In accordance with the provisions of the Companies Act, 1956 and
Articles and Association of the Company Sri Om Narayan, Sri Amit
Khandelwal and Sri Rajeev Kumar Agrawal retires by rotation at ensuing
Annual General Meeting of the Company and are eligible offer themselves
for reappointment.
Brief resumes of the directors being reappointed at the ensuing AGM is
given in terms of clause 49 of the listing agreement.
Name Sri Om Narayan
Date of Appointment 22.09.1989
Nature of expertise in specific areas Extensive experience in corporate
bodies
Qualification IIT Graduate, Chemical Engineer
List of other Directorships held excluding alternate Directorship and
Private Companies
1. Dhampur Sugar Distillery P. Ltd.
2. Golden Sun Pvt. Ltd.
Chairman/Member of the Committee of the Board of Directors of the
Company
Member :
1. Share Transfer Committee
2. Remuneration Committee
Chairman/Member of the Committee of the Board of Directors of other
companies in which he is a director
None
Name Sri Amit Khandelwal
Date of Appointment 16.05.2007
Nature of expertise in specific areas
Qualification MBA
List of other Directorships held excluding alternate Directorship and
Private Companies
Chairman/Member of the Committee of the Board of Directors of the
Company
Member :
1. Audit Committee
Chairman/Member of the Committee of the Board of Directors of other
Companies in which he is a director.
None
Name Sri Rajeev Kumar Agrawal
Date of Appointment 07.07.2008
Nature of expertise in specific areas
Experience in managing Sugar Mills for more than one decade
Qualification Post Graduate
List of other Directorships held excluding alternate Directorship and
Private Companies
None
Chairman/Member of the Committee of the Board of Directors of the
Company
None
Chairman/Member of the Committee of the Board of Directors of other
companies in which he is a director
None
Statutory Information
The Particulars of Employees' remuneration under section 217(2A) of the
Companies Act. 1956
The Company's 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 of Equity Shares
The Company's securities are listed at the Stock Exchange, Mumbai
(BSE), The Delhi Stock Exchange Association Ltd., Delhi and the U.P.
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
represen- tation 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
- Shri Harish Saluja (Chairman)
- Shri 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.
For and on behalf of the Board of Directors
R.K. Agrawal Om Narayan
Whole Time Director Director
Place : New Delhi
Dated : 29.11.2010
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