india sugars refineries ltd Management discussions

THE INDIA SUGARS AND REFINERIES LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS WORKING RESULTS The working figures of the company for the season 2004-2005 along with the figures of 2003-2004 season are given below: 2004-2005 2003-2004 Season Season Date of commencement of crushing operations 30.12.2004 14.12.2003 Date of closure of crushing operations 02.04.2005 05.03.2004 Gross Season days 94 83 Sugarcane handled (Input) MT 1,77,708 1,44,945 Sugar produced (Output) 1,86,210 1,44,000 Net of reprocessing Qtls. Qtls. Recovery 10.39% 9.88% Your Company has crushed 1,75,691 MT of sugarcane and produced 19,292 MT of sugar during the year 2004-2005 as against 1,44,945 MT of sugarcane crushed and produced 14,400 MT of sugar during the corresponding previous year i.e. 2003-2004. The company has paid the sugar cane price of Rs. 950/- Per M.T which includes the purchase tax rebate and unloading charges. Your Companys turnover was Rs.3,793.81 lakhs for the year 2004-2005 (previous year Rs.3,620.92 lakhs). SUGAR POLICY AND SUGAR PRICE Government of India has fixed the levy Sugar Price for 2004-2005 season and the price applicable to your company is Rs.1,290.68 per quintal. The ratio of levy and free sale sugar at 10% : 90% is continued. REVIVAL OF THE COMPANY Your Directors are pleased to inform that the company is under rehabilitation process as per the scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 12th February, 2002. The company has fully installed the capital equipments as envisaged in the scheme of modernization cum expansion. During the year company had proposed settlement of its dues to Karnataka State Industrial Investment & Development Corporation Limited (KSIIDC) and the Bellary District Co-operative Central Bank Limited (BDCC BANK) including dues under guarantee obligation and the said proposals were acceded to by them in December and October, 2005 respectively subject to the certain terms and conditions. Consequently Rs.31,713,375 pertaining to principal portion of the dues and Rs.64,504,302 pertaining to the interest on the dues have become no longer payable. Hence the former has been transferred to general reserve and the latter to the revenue and disclosed under extraordinary items in Schedule 21 to the accounts. Your Directors are confident that the accumulated losses would be wiped out in the ensuing year thus making the net worth positive. PROSPECTS: Factory: Cane crushing for the season 2005-06 started on 17th December, 2005. The working of the Factory is smooth and all the efficiency parameters are within the norms. To ensure smooth and efficient running of the Factory following major works have been carried out during the Off Season. 2005 in addition to regular overhauling. > We have installed a new Swing Hammer Type Fibnzor coupled to a new 750 HP 750 RPM motor to achieve better preparatory index at the Cane preparatory Section. > We have upgraded the existing 28 dia clarifier from Type 444 to Type 555 to enhance the handling capacity by 25%. > We have installed Automatic Imbibitions Water-flow Control System which ensures uniform application of Imbibition system. > Twin Rake type lime classifier is purchased for milk of lime preparation. With this, clarification of juice will improve, and in turn improves sugar quality. > Also we have introduced new ERP software package for Cane & Human Resource Management to improve working. Maximum care is taken to attend all the problems experienced during previous season, to ensure smooth and steady running of the Factory. The working results are shown in the tabulated form which is annexed.