Your Directors take pleasure in presenting their report and the audited accounts of theCompany for the year ended 30th June, 2010.
2. Financial results and appropriations
(Rs. in lakhs)
| ||2009 10 ||2008 09 |
|Net revenue ||40,173.54 ||43,623.78 |
|Gross profit/(loss) before depreciation and interest ||1,223.11 ||7,657.75 |
|Less: Interest ||4,293.27 ||4,219.94 |
|Depreciation ||2,632.04 ||2,596.69 |
| ||6,925.31 ||6,816.63 |
|Profit/(loss) before tax ||(5,702.20) ||841.12 |
|Less: Provision for tax: || || |
| Current ||117.00 ||92.70 |
| Deferred tax charge/(credit) ||(1,988.21) ||179.36 |
| MAT credit (entitlement)/reversal ||104.55 ||(66.40) |
| Income Tax provisions no longer required written back ||(28.90) ||(3.34) |
| Fringe benefit tax || ||11.86 |
| ||1,795.56 ||214.18 |
|Profit/(loss)after tax ||(3,906.64) ||626.94 |
|Add: Surplus brought forward ||559.19 ||110.19 |
|: Transfer from General Reserve ||3,500.00 || |
|Amount available for appropriation ||152.55 ||737.13 |
|Appropriations || || |
| Transfer to General Reserve || ||15.68 |
| Dividend || ||138.69 |
| Dividend tax (net) || ||23.57 |
| || ||177.94 |
|Balance carried to Balance Sheet ||152.55 ||559.19 |
3. The Company recorded a net revenue of Rs. 40,173.54 lakh (including other income ofRs. 425.41 lakhs) for the year ended 30th June, 2010. The Gross sales (inclusive of exciseduty among others) of the Company for the year 2009-10 declined by 9.04% to Rs 41,873.69lakh from Rs 46,034.56 lakh in the year 2008-09.
The earning before interest, depreciation, tax for the year under review stood at Rs.1,223.11 lakh representing 3.04% of the net revenue and showed a decline of 84.02% overprevious years Rs. 7,657.75 lakhs. The decline in the profits in sugar was fuelledby lower than expected realization and decline in sales volume during the year underreview.
Sugar sales decreased from Rs 40,520.34 lakh to Rs 35,435.39 lakh in 2009-10, showing adecline of 12.55%. However, sale of industrial alcohol increased by 115.28% as a directresult of increased generation of molasses. Likewise, revenue from bagasse based powerrecorded an increase of 40%.
The performance of sugar segment of the Company was marked with oscillating operations.While the first half of the current year under review witnessed higher demand of sugar andlower availability of the principal raw material namely the sugarcane and at unprecedentedhigh rate resulting in compressed production, the second half was affected by considerablylower realization of sugar prices due to variety of measures undertaken by the Governmentof India. The profit performance of the Company was also impacted due to doubling of thequota of levy sugar and low recovery.
The performance of tea segment was, however, encouraging. The production of teaincreased from 12.45 lakh kg in the immediately preceding year to 13.16 lakh kg in theyear under review, the average realization also increased from Rs. 112.37 per kg in2008-09 to Rs 144.60 per kg in 2009-10 indicating an increase of 28.68%.
4. A detailed analysis of the Company's operations, future expectations and businessenvironment has been given in the Management Discussions & Analysis Report, which isattached and is an integral part of this report.
R & D
5. During the year under review the Company incurred a sum of Rs. 270.81 lakh onaccount of Research & Development with an intention to improve the recovery ratio andin educating the cane growers to cultivate improved variety of sugar cane.
6. The Board of Directors did not recommend any dividend for the year under review.
7. Pursuant to Clause 49 of the Listing Agreement, Management Discussion & AnalysisReport, statement in respect of conservation of energy, the report on CorporateGovernance, Declaration of Managing Director on Code of Conduct and AuditorsCertificate on compliance of conditions of Corporate Governance are all attached to andform integral part of this Report and are annexed to this Report as Annexure"A", "B", "E", "F" and "G" respectively.
8. The Company has eight Non-Executive Directors having experience in varied fields anda Chairperson-cum-Managing Director. Two Directors Mr. Chandra Shekhar Nopany and Lt. Gen.K Chiman Singh retire from the Board by rotation and are eligible for re-appointment.
The term of Mrs. Nandini Nopany, Chairperson cum Managing Director of the Company wouldexpire on 30th September, 2010.
She has been reappointed as a Chairperson cum Managing Director for a further period of3 years w.e.f 1st October, 2010 subject to approval of the shareholders.
9. Other information on the directors including required particulars of Directors beingreappointed and retiring by rotation is provided in the Report of Corporate Governanceannexed to this Report as Annexure "E".
Directors Responsibility Statement
10.Your Directors confirm that -
i) In the preparation of the annual accounts the applicable accounting standards werefollowed and there is no material departures;
ii) Such accounting policies were selected and applied consistently and judgments andestimates made were reasonable and prudent, so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the loss of theCompany for that year;
iii) Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities. Toensure this, the Company established internal control systems, consistent with its sizeand nature of operations, in weighing the assurance provided by any such system ofinternal controls and in recognizing its inherent limitations. These systems are reviewedand updated on an ongoing basis. Periodic internal audits are conducted to providereasonable assurance of compliance with these systems. The Audit Committee meets atregular intervals to review the internal audit functions;
iv) The financial statements were prepared on a going concern basis.
v) The annual accounts were prepared on agoing concern basis.
Auditors, Audit Qualifications and Boards Explanations
11.The Auditors Report is self-explanatory. However, the Auditors made anobservation regarding recognition of Deferred Tax Assets amounting to Rs 1363.27 lakh uptothe year 2009-10. The Companys projections are that there would be sufficienttaxable income in the future to claim credit of Deferred Tax Assets. With regard to theAuditors observation for adopting different accounting period in relation to CinnatolliahTea Garden, it is said that due to the seasonal nature of the tea industry a differentaccounting period continues to be followed for tea business.
12.The Auditors, Messrs S. R. Batliboi & Co, Chartered Accountants, retire and areeligible for re-appointment. According to the certificate submitted to the Company by thesaid firm of Auditors the said re-appointment, if made, will be in accordance with theprovisions of Section 224(1B) of the Companies Act, 1956.
The Board, on the recommendation of the Audit Committee, proposed that Messrs S. R.Batliboi & Co, Chartered Accountants, be re-appointed as the Statutory Auditors of theCompany and to hold office till the conclusion of the next Annual General Meeting of theCompany.
13.In accordance with the directives of the Central Government under Section 233 B ofthe Companies Act, 1956, Mr S. N. Mukherjee, cost accountant, was appointed as costauditor to audit the cost accounting records relating to Sugar and industrial alcoholunits situated at Seohara and Sugar unit at Sidhwalia and M/s. D. Radhakrishnan & Co.,cost accountants were appointed as cost auditor for Sugar unit at Hasanpur for the currentyear.
14.The audited accounts of Uttar Pradesh Trading Company Ltd., a subsidiary of theCompany, for the year ended 31st March, 2010 are attached. In this regard, the statementpursuant to Section 212 of the Companies Act, 1956 is also attached and is marked asAnnexure "D".
Consolidated Financial Statements
15.As required under the Listing Agreement with the Stock Exchanges, ConsolidatedFinancial Statements, conforming to the Accounting Standard 21, 23 and 27 are attached.
Particulars of Employees
16.Statement containing particulars of employees as required under Section 217(2A) ofthe Companies Act, 1956 is attached as a separate Annexure "C" and forms anintegral part of this Report.
Energy conservation, technology absorption and foreign exchange earnings and outgo
17.Statement containing particulars in respect of conservation of energy, technologyabsorption and foreign exchange earnings and outgo as required under Section 217(1)(e) ofthe Companies Act, 1956 is attached as per Annexure "B" and forms part of thisReport.
18.As on 30th June, 2010, your Company had 1339 depositors with fixed deposits of Rs.1,326.54 lakhs. 3 depositors have not claimed their fixed deposits amount of Rs. 13.81lakh as on that date. The depositors are being advised at regular intervals to claim theirdeposits. Efforts are being made to contact all such depositors to facilitate the refundof the dues to them.
19.Mrs. Nandini Nopany, the Chairperson-cum-Managing Director and Mr. S. K. Maheshwari,CFO have given a certificate to the Board as contemplated in Clause 49 of the ListingAgreement.
20.Your Directors take this opportunity of recording their appreciation of theshareholders, financial institutions, bankers, suppliers and cane growers for extendingtheir support to the Company. Your Directors are also grateful to the various ministriesin the Central Government and State Governments of Uttar Pradesh, Bihar and Assam, theSugar Directorate and the Sugar Development Fund for their continued support to theCompany. The Directors also recognise the valuable contribution made by the employees atall levels to the Companys progress.
| ||For and on behalf of the Board |
| ||Nandini Nopany |
|Kolkata, ||Chairperson-cum-Managing Director |
|Dated: 25th August, 2010 || |