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Sakthi Sugars Limited


Sakthi Sugars LimitedRegistered OfficeSakthi Nagar-638 315Erode District, Tamil Nadu.Head Office180, Race Course RoadCoimbatore - 641 018, Tamil Nadu.

Sugar DivisionUnit I Sakthi Nagar - 638 315

Erode District, Tamil Nadu.Unit II Padamathur, Sivaganga Tk - 630 561

Sivaganga District, Tamil Nadu.Unit III Sunapal, Barambagarh - 754 031

Cuttack District, Orissa.Unit IV Haripur Village, Korian Post - 759 013

Dhenkanal District, Orissa.

Distillery Division(i) Sakthi Nagar-638 315

Erode District, Tamil Nadu.(ii) Haripur Village, Korian Post - 759 013

Dhenkanal District, Orissa.

Soya DivisionMarchinaickenpalayamAmbarampalayam Post - 642 103Coimbatore District, Tamil Nadu.

Main BankersCanara BankPunjab National BankIndian Overseas BankThe Karur Vysya Bank Ltd.The Lakshmi Vilas Bank Ltd.The South Indian Bank Ltd.State Bank of TravancoreCitibank N.A.

. State Bank of Mauritius Ltd.State Bank of IndiaThe Orissa State Co-operative Bank Ltd.ICICI Bank Ltd.

Board of DirectorsDr. N. MAHALINGAMChairman

Sri M. MANICKAMVice Chairman & Managing Director

Sri K.K. RAMASWAMY GOUNDERSri D. PERIYASAMYSri P.K. CHANDRANSri G.G. GURUMURTHYSri S.S. MUTHUVELAPPANSri KARU SEEMAICHAMYSri M. BALASUBRAMANIAMSri N.K. VIJAYANSri M. SRINIVAASANSri V.K. SWAMINATHANSri C. RANGAMANI (Nominee of GICI)Sri T. PRAKASH (Nominee of IDBI)Sri S. SARAVANAN (Nominee of TIDCO )Sri M. PANDI (Nominee of I1BI)Smt SMITA GUNE (Nominee of ICICI)

Company SecretarySri S. BASKAR

AuditorsM/s. P.N. RAGHAVENDRA RAO & CO.Coimbatore


C O N T E N T SPage No.

Notice to Shareholders 3Re-appointment of Directors 7Report of the Directors 8Corporate Governance 13Management's Analytical Report 19Auditors' Report 20Balance Sheet 22Profit & Loss Account 24Schedules 26Accounting Policies 36Segment Information 50Related Parties Disclosure 51Statement pursuant to Section 212

of the Companies Act, 1956 52Cash Flow Statement 54Accounts of Subsidiary 56Consolidated Financial Statements 73



NOTICE TO SHAREHOLDERSNotice is hereby given that the 42nd Annual GeneralMeeting of the Company will be held at its RegisteredOffice at Sakthi Nagar - 638 315, Bhavani Taluk,Erode District, Tamil Nadu, on Thursday, 18thDecember 2003 at 3.00 P.M. to transact the followingbusiness:1. To consider and adopt the Directors' Report and

the audited Profit & Loss Account for the yearended 30th June 2003 and the audited BalanceSheet as at that date and the Auditors' Reportthereon.

2. To appoint a Director in the place ofSri M Balasubramaniam, who retires by rotationand is eligible for re-appointment.

3. To appoint a Director in the place ofSri D Periyasamy, who retires by rotation and iseligible for re-appointment.

4. To appoint a Director in the place ofSri P K Chandran, who retires by rotation and iseligible for re-appointment.

5. To appoint a Director in the place ofSri M Srinivaasan, who retires by rotation and iseligible for re-appointment.

6. To appoint M/s P N Raghavendra Rao & Co.,Chartered Accountants, as Auditors of theCompany for holding office upto the conclusionof the next Annual General Meeting and to fixtheir remuneration.

SPECIAL BUSINESS:7. To consider and, if thought fit, to pass, with or

without modification, the following resolution asan Ordinary Resolution:RESOLVED that subject to the approval of theCentral Government and financial institutions asmay be required, pursuant to the provisions ofSections 198, 269 and 309 and other applicableprovisions, if any, of the Companies Act, 1956,approval be and is hereby accorded for the re-appointment of Sri M Manickam as ManagingDirector of the Company for a period of 5 yearsfrom 9.9.2003 and for payment of the followingremuneration and for providing the followingperquisites to him.

I. SALARYRs. 50,000 per month (Rupees fifty thousand only)

II. PERQUISITESNot exceeding Rs. 37,5007- (Rupees Thirty seventhousand five hundred) only per month.

In addition to the above perquisites, SriM Manickam, Vice Chairman & ManagingDirector, shall also be entitled to the followingperquisites which shall not be included in thecomputation of the ceiling on perquisites referredabove.(A) Contribution to Provident Fund and

Superannuation Fund or annuity fund to theextent not taxable under the Income Tax Act.

(B) Gratuity at the rate of half a month's salaryfor each completed year of service.

(C) Encashment of leave at the end of tenure asper the Rules of the company.

The above salary and perquisites be paid asminimum remuneration even in the event of lossor inadequacy of profits in any year.

III. COMMISSION1% Commission on the net profits of the Company,subject to the maximum ceiling specified in Section309(3) of the Companies Act, 1956.

8. To consider and, if thought fit, to pass with orwithout modification, the following resolutionsas Special Resolutions:A. RESOLVED that the consent of the Companybe and is hereby accorded to the Board ofDirectors under the provisions of Section 293(l)(a)of the Companies Act, 1956:(i) to mortgage and / or charge the Co-generation

plant of the Company situate at Sakthi Nagarincluding all the immovable and movableproperties of that plant wheresoever situate,present and future, and/or for conferring powerto enter upon and take possession of theaforesaid assets of the Company in certainevents to or in favour of Financial Institutions/Banks/Bodies Corporate/Insurance Companiesand/or any other institution/s to secure thefinancial assistance to an extent of Rs. 100crores to be availed from them; and

(ii) to authorise the Board of Directors of theCompany for agreeing with the FinancialInstitutions/B anks/Bodies Corporate/InsuranceCompanies and/or any other institution/s theterms and conditions to reserve a right to takeover the management of the Co-generationplant of the Company situate at Sakthi Nagarin certain events in terms of their respectiveagreements/letters of sanction/terms andconditions in connection with the creation ofsecurity and other incidental matters.


B. RESOLVED FURTHER that the Board ofDirectors of the Company be and'is herebyauthorised to finalise with the FinancialInstitutions/Banks/Bodies Corporate/InsuranceCompanies and/or any other institution/s thedocuments for creating the aforesaid mortgage /charge and/or for conferring the aforesaid rightsand to do all such acts and things as may benecessary for giving effect to the above resolution.

9. To consider and, if thought fit, to pass with orwithout modification, the following resolutionsas Special Resolutions:A. RESOLVED that the consent of the Companybe and is hereby accorded to the Board ofDirectors under the provisions of Section 293(l)(a)of the Companies Act, 1956:(i) to mortgage and / or charge the Co-generation

plant of the Company situate at Sakthi Nagarincluding all the immovable and movableproperties of that plant wheresoever situate,present and future, and/or for conferring powerto enter upon and take possession of theaforesaid assets of the Company in certainevents to or in favour of Global Trust BankLimited to secure the financial assistance to anextent of Rs. 17 crores availed from them; arid

(ii) to authorise the Board of Directors of theCompany for agreeing with Global Trust BankLimited the terms and conditions to reserve aright to take over the management of the Co-generation plant of the Company situate atSakthi Nagar in certain events in terms oftheir agreements/letter of sanction/terms andconditions in connection with the creation ofsecurity and other incidental matters.

B. RESOLVED FURTHER that the. Board ofDirectors of the Company be and is herebyauthorised to finalise with Global Trust BankLimited the documents for creating the aforesaidmortgage / charge and/or for conferring theaforesaid rights and to do all such acts and thingsas may be necessary for giving effect to the aboveresolution.

10. To consider and, if thought fit, to pass with orwithout modification, the following resolutionsas Special Resolutions:A. RESOLVED that the consent of the Companybe and is hereby accorded to the Board ofDirectors under the provisions of Section 293(l)(a)of the Companies Act, 1956:

(i) to mortgage and / or charge the assets of theBeverage Division of the Company includingall the immovable and movable properties ofthat division wheresoever situate, present andfuture, and/or for conferring power to enterupon and take possession of the assets of theCompany in certain events to or in favour ofCitibank N.A., to secure the financialassistance to an extent of Rs.12 crores availedfrom them; and

(ii) to authorise the Board of Directors of theCompany for agreeing with Citibank N.A.,the terms and conditions to reserve a right totake over the management of the BeverageDivision of the Company in certain events interms of their agreements/letter of sanction/terms and conditions in connection with thecreation of security and other incidentalmatters.

B. RESOLVED FURTHER that the Board ofDirectors of the Company be and is herebyauthorised to finalise with Citibank N.A., thedocuments for creating the aforesaid mortgage /charge and/or for conferring the aforesaid rightsand to do all such acts and things as may benecessary for giving effect to the above resolution.

11. To consider and, if thought fit, to pass, with orwithout modification, the following resolution asSpecial Resolution:RESOLVED that pursuant to Section 293(1 )(d)of the Companies Act, 1956, consent be and ishereby accorded to the Board of Directors of theCompany to borrow for the purpose of theCompany, a sum or sums of money (apart fromtemporary loans obtained and/or to be obtainedfrom the Company's bankers in the ordinarycourse of business) not exceeding Rs. 750 crores(Rupees seven hundred and fifty crores) only overand above the paid-up capital of the Companyand its free reserves, that is to say, reserves notset apart for any specific purpose.

12. To consider and, if thought fit, to pass, with orwithout modification, the following resolution asan Ordinary Resolution:RESOLVED that pursuant to the provisions ofSection 293(l)(e) of the Companies Act, 1956,the Board of Directors of the Company be and ishereby authorised to donate and contribute a sumor sums not exceeding in the aggregate of Rs. 20lakhs (Rupees twenty lakhs) only from out 'of thefunds of the Company for deserving causes and



institutions during the financial year ending 30thJune 2004.

13. To consider and, if thought fit, to pass, with orwithout modification, the following resolution asSpecial Resolution:RESOLVED that the approval of the Companybe and is hereby accorded for delisting the sharesof the Company from Madras Stock ExchangeLimited and Bangalore Stock Exchange Limitedwithout giving an exit option to the shareholdersof the regions where the aforesaid StockExchanges are situated, in accordance withSecurities and Exchange Board of India (Delistingof Securities) Guidelines, 2003 and other relevantlaws, rules, regulations and guidelines (includingany statutory modifications or enactments thereoffor the time being in force and as may be enactedhereafter), subject to such other approvals,permissions and sanctions as may be necessary,and that the Board of Directors of the Company(whether acting through the Board, a Committeeof the Board or any Director or any personauthorized by the Board) be and is herebyauthorized to do all necessary acts and deeds inthis regard.

By Order of the BoardCoimbatore S. BASKAR30th September 2003 Company Secretary

NOTE:1. A Member entitled to attend and vote at the Annual

General meeting is entitled to appoint a proxy. AProxy need not be a Member of the Company.

2. The explanatory statement pursuant to Section 173of the Companies Act, 1956 in respect of theSpecial Business under item Nos. 7 to 13 isenclosed.

3. The Register of Members and the Share TransferBooks of the Company will remain closed from10.12.2003 to 18.12.2003 (both days inclusive).

4. The Company had transferred all unclaimeddividend declared upto financial year ended31.3.1994 to the General Revenue Account of theCentral Government as required by the CompaniesUnpaid Dividend (Transfer to the General RevenueAccount of the Central Government) Rules, 1978.Those Shareholders who have so far not claimedor collected their dividend upto the aforesaidfinancial year may claim their dividend from theRegistrar of Companies, Stock Exchange Building,Trichy Road, Singanallur, Coimbatore 641 005.

5. Pursuant to the provisions of Section 205A(5) ofthe Companies Act, 1956, dividend, which remainsunclaimed for a period of seven years from thedate of transfer to the Unpaid Dividend Accountwill be transferred to Investors Education andProtection Fund established under Section 205Cof the Companies Act, 1956 and upon such transfer,no claim shall lie against the company or theCentral Government for such unclaimed dividend.Shareholders who have not so far encasheddividend warrants for the financial year ended31.3.1997 are requested to make their claim to theCompany immediately.

EXPLANATORY STATEMENT UNDER SECTION 173 OF THE COMPANIES ACT, 1956

Item No.7The term of office of Sri M Manickam as ManagingDirector of the Company expired on 8th September2003. Considering his contribution to the growth ofthe Company during his period of office, the Board ofDirectors have, subject to the approval of the CentralGovernment, Members at the General Meeting and ofthe Financial Institutions as may be required, re-appointed Sri M Manickam as Managing Director for2 further period of five years from 9th September 2003.The necessary resolution is placed before the membersfor their approval.Sri M Manickam may be deemed to be concernedor interested in the above resolution as itrelates to his re-appointment and remuneration.

Dr. N Mahalingam, Chairman, Sri M Balasubramaniamand Sri M Srinivaasan, Directors are interested as hisrelatives.Item No.8The Company proposes to avail term loan of aboutRs.100 crores from Financial Institutions/Banks/Insurance Companies and other Bodies Corporates forthe purpose of meeting its working capital requirementsagainst security among others, by way of first chargeon the assets of the co-generation plant, pursuant tothe terms of restructure package approved by CDREmpowered Group. The necessary resolutions areplaced for approval of the Members.None of the Directors is concerned or interested in thesaid resolution.


Item No.9For the purpose of financing the Co-generation project,the Company has availed a term loan of Rs.17 croresfrom Global Trust Bank Ltd against security, amongothers, by way of first charge on the assets of Co-generation plant. As per Section 293(1) (a) of theCompanies Act, 1956, Members' approval is requiredto the Board of Directors to mortgage or charge theaforesaid assets of the Company. The necessaryresolutions are placed for the approval of the Members.None of the Directors is concerned or interested in thesaid resolution.

Item No.10The Company has availed a term loan of Rs.12 croresfrom Citibank N.A., for the purpose of financing thebeverage plant, against security, among others, by wayof first charge on the fixed assets of the BeverageDivision of the Company. As per Section 293(1) (a) ofthe Companies Act, 1956, Members' approval is requiredto the Board of Directors to mortgage or charge theaforesaid assets of the Company. The necessaryresolutions are placed for the approval of the Members.None of the Directors is concerned or interested in thesaid resolution.

Item No.llAt the Annual General Meeting held on 20th September1995, the Members had authorised the Board ofDirectors to borrow monies for the purpose of theCompany not exceeding Rs.500 crores over and abovethe paid-up capital and free reserves of the Company.To enable the Board of Directors to borrow additionalfunds for financing the capital expenditure incurred/tobe incurred in connection with co-generation, beverageand ethanol projects, and to meet the requirements ofadditional working capital, the borrowing powers givento the Board of Directors have to be increased.Necessary resolution is placed before the Membersfor approval authorising the Board of Directors toborrow upto Rs.750 crores (Rupees seven hundredand fifty crores) only over and above the paid upcapital and free reserves of the Company.None of the Directors is concerned or interested in thesaid resolution.

Item No.12To meet certain charitable and social obligations, it isproposed to authorize the Board of Directors to makedonations upto Rs.20 lakhs (Rupees twenty lakhs) onlyfor the year ending 30th June 2004 subject to theapproval of the Members.None of the Directors is concerned or interested in thesaid resolution.

Item No. 13At present the Company's shares are listed withCoimbatore Stock Exchange Limited (RegionalExchange), Madras Stock Exchange Limited (MSB),Bangalore Stock Exchange Limited (BgSE), The StockExchange, Mumbai (BSE), and The National StockExchange of India Limited (NSE). The Securities andExchange Board of India (Delisting of Securities)Guidelines, 2003 permits a company to voluntarilydelist its securities, without offering an exit option toits shareholders in cases where its shares continue tobe listed on Stock Exchanges having nationwidetrading terminals. The Company's shares are listed onBSE and NSE. As the trading volume in MSB andBgSE are nil or insignificant compared to the totalvolume of Company's shares traded in BSE and NSE,it is proposed to delist the shares from MSB and BgSE.Securities and Exchange Board of India (SEBI) hasspecified for settlement of the Company's equity shares

only in dematerialised form. Further as the'shares ofthe Company are traded through online terminalsprovided by BSE arid NSE throughout India, delistingof shares from MSB and BgSE will not have anyadverse effect on the investors. Hence as a matter ofcost reduction measure and in line with SEBIguidelines for voluntary delisting of shares, theCompany has proposed to delist its shares from thesaid two stock exchanges. The necessary specialresolution is placed for the approval of the Members.

None of the Directors is concerned or interested in thesaid resolution.

Coimbatore30th September 2003

By Order of the BoardS. BASKAR

Company Secretary



RE-APPOINTMENT OF DIRECTORSA brief resume in respect of the proposedthe Listing Agreement

NameDate of birth & ageDate of AppointmentQualificationExperienceOther Directorships

Member of Committeesi. Sakthi Sugars Limitedii. Sakthi Finance Limited

NameDate of birth & ageDate of AppointmentExperienceOther DirectorshipsNameDate of birth & ageDate of AppointmentExperienceOther DirectorshipsMember of Committees(Sakthi Sugars Limited)NameDate of birth & ageDate of AppointmentQualificationExperience

Other Directorships

re-appointment of Directors is given below in terms of Clause 49 ol

Sri M Balasubramaniam6.5.1958 - 45 years21.8.1989M.Com.,M.B.A.(Notredame, USA)Has got rich experience in Finance & Business AdministrationABT LimitedSakthi Auto Component LimitedSri Sakthi Textiles LimitedSri Bhagavathi Textiles LimitedSri Chamundeswari Sugars LtdSakthi Finance LimitedABT Industries LimitedABT Finance LimitedThe Union Bus Service (P) LtdSakthi Management Services (Coimbatore) LimitedSakthi Properties (Coimbatore) LtdSakthi Logistic Services LimitedThe Gounder and Company Auto Ltd

Audit Committee Shareholders / Investors Grievance CommitteeShareholders / Investors Grievance CommitteeSri D Periyasamy15.7.1915 - 88 years27.11.1991He has rich experience in Business AdministrationNILSri P K Chandran6.9.1948 - 55 years14.11.1977He has rich experience in Sugarcane cultivationNILAudit CommitteeRemuneration CommitteeSri M Srinivaasan2.9.1966 - 37 years23.8.1995B.E..M.B.A. (Pennsylvania, USA)He has rich experience in Sugar Technology and BusinessManagementABT LimitedSakthi Auto Component LimitedSri Sakthi Textiles LimitedSri Bhagavathi Textiles LimitedSri Chamundeswari Sugars LtdSakthi Finance LimitedABT Industries LimitedChamundeswari Enterprises P.LtdSakthi Synthetic Gems LimitedSakthi Management Services (Coimbatore) LimitedThe Gounder and Company Auto Ltd


REPORT OF THE DIRECTORSTo the MembersYour Directors present their Annual Report togetherwith the audited financial accounts of the Companyfor the year ended 30th June 2003.

FINANCIAL RESULTS FOR THE YEAR ENDED30TH JUNE 2003

(Rs. in lakhs)Profit before interest and depreciationLess: Interest charges 4971.04

Depreciation on Fixed Assets 1347.49Prior year adjustments (Net) 114.99

Add : Previous year's credit balance inProfit and Loss Account B/F

Excess provision reversedReversal of provision for

diminution value of investmentsDeferred tax - current yearTransfer from Storage Reserve

Surplus/Deficit carried over

1002.76

6433.52- 5430.76

52.551.32

15.57518.48

15.83603.75

- 4827.01

The market price for sugar has been very low for thelast couple of years and it had reached the lowestlevel during the year under review. On account of thisthe Company has to pass through a stressful year. Theloans, debentures and other credit facilities, availed bythe Company from majority of Financial Institutionsand banks have been restructured under the CorporateDebt Restructuring Scheme announced by the ReserveBank of India. Preference Shares subscribed by Bankshave also been brought under the CDR Scheme andrestructured.

DIVIDENDIn view of the loss incurred by the Company nodividend was recommended by the Directors.

REVIEW OF OPERATIONSSUGAR DIVISIONCrushing of sugarcane at various units of the Company-for the year 2002-2003 is as under:Sakthi Nagar Unit 7,13,389 tonnesSivaganga Unit 5,34,283 tonnesDhenkanal 1,18,234 tonnesBaramba Unit 1,06,641 tonnes

The free sale/levy sale ratio remained at 90 : 10.During the year 1,44,241 tonnes of sugar wasmanufactured out of cane and 48,264 tonnes of sugarwas manufactured out of imported raw sugar. 57,733tonnes of sugar was exported directly and 18,582tonnes of sugar was exported out of sugar procuredfrom other factories. It is expected that the currentyear's crushing will be less than the previous year onaccount of deficiency in rainfall. However, the companyis planning to augment sugar production by refiningimported raw sugar.

DISTILLERY DIVISION

During the year under review, 270.13 lakh litres ofindustrial alcohol was produced at Sakthi Nagar Unitand 8.30 lakh litres at Dhenkanal Unit.

In the current year 302 lakh litres of industrial alcoholis expected to be produced.

In Sakthinagar Distillery, Ethanol plant has beeninstalled with a capacity of 50000 litres per day. Thetrial production commenced on 4.6.2003 and supplyof ethanol to oil companies is expected to commenceshortly.

SOYA DIVISIONDuring the year under review, 16291 tonnes of soyabeans have been crushed. This division has exportedproducts worth Rs.1565.35 lakhs to various countries.

CO-GENERATION PROJECTThere has been slight delay in implementing the 32MWCo-Generation plant at Sakthi Nagar Sugar Unit andthe Plant is expected to be commissioned during thefourth week of October 2003, as against the date earlierenvisaged.The 2MW Incidental Co-generation plant at SivagangaSugar Unit generated and transferred to the State Grid2234160 units of power during the year under review.

BEVERAGE DIVISIONThe implementation of beverage project underarrangements with Hindustan Coca-Cola BeveragesPrivate Limited is complete and the plant is ready foroperation. Necessary permission from the StateGovernment is expected to commence commercialproduction.

DEPOSITSAt the end of the financial year, 629 depositsamounting to Rs. 111.50 lakhs which were due for



repayment remained unclaimed on their due dates. Ofthese, 263 deposits totaling Rs.77.36 lakhs have sincebeen paid or renewed at the option of the depositors.

DIRECTORS

Your Directors regret to report the demise ofSri P N Sengodappan, Director on 7.1.2003. He wasa Director of the Company since 1983. They wish toplace on record the invaluable support extended byhim during his tenure of office.

Smt. Smita Gune has been appointed by ICICI BankLimited as its nominee Director in the place ofSri K Bharathan. Your Directors wish to place on recordtheir appreciation of the services rendered bySri K Bharathan.

The following Directors retire by rotation at the ensuingAnnual General Meeting and are eligible forreappointment.

1. Sri. M Balasubramaniam2. Sri. D Periyasamy3. Sri. P K Chandran4. Sri, M Srinivaasan

The Board of Directors of the Company have, subjectto the approval of the Central Government,Financial Institutions and Members, re-appointedSri M Manickam as Managing Director for a periodof 5 years effective from 9.9.2003.

DIRECTORS' RESPONSIBILITY STATEMENTPursuant to requirements under Section 217(2AA) ofthe Companies Act, 1956 with respect to Directors'responsibility statement, it is hereby confirmed:

a) that in the preparation of the annual accounts forthe financial year ended 30.6.2003 the applicableaccounting standards had been followed;

b) that the directors had selected such accountingpolicies and applied them consistantly and madejudgements and estimates that are reasonable andprudent so as to give- a true and fair view of thestate of affairs of the company at the end of thefinancial year and of the loss of the company forthe year under review;

c) that the directors had taken proper and sufficientcare for the maintenance of adequate accountingrecords in accordance with the provisions of theCompanies Act for safeguarding the assets of the

d)

Company and for preventing and detecting fraudand other irregularities;

that the directors had prepared the annual accountson a going concern basis;

AUDIT COMMITTEE

The Company has re-constituted Audit Committeeduring the year under review and at present theCommittee consists of the following Directors viz.,Sri V K Swaminathan, Sri M Balasubramaniam,Sri P K Chandran and Sri M Pandi (IIBI Nominee).

SUBSIDIARY COMPANY

As required under section 212 of the Companies Act1956, the Audited Statement of Accounts for the yearended 30.6.2003 of Sakthi Auto Component Ltd, thewholly owned subsidiary, together with the Reports ofthe Directors and Auditors and also the statement underthe said section are annexed.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, aReport on Corporate Governance along with AuditorsCertificate of its compliance is included as part of theAnnual Report.

MANAGEMENT'S ANALYTICAL REPORT

Management's Analytical Report as required under theListing Agreement is given in the section on CorporateGovernance.

AUDITORS

M/s P.N.Raghavendra Rao & Co., Auditors of theCompany, retire at the conclusion of the AnnualGeneral Meeting and are eligible for re-appointment.

CONSERVATION OF ENERGY

(a) Energy Conservation measures taken1. Variable frequency drives were provided for

weighed juice pumps and cane carrier drivesin Sivaganga Sugar Unit.

2. An additional 300KVAR capacitor bank hasbeen provided to improve the power factor inBadamba Sugar Unit.

3. Steam drives in the mill/mincer are replacedwith electrical drive in A Tandem in SakthiNagar Sugar Unit.


(b) Additional investments and proposals, if any, beingimplemented for reduction of consumption ofenergyThe existing vapour cool & condensing system inDhenkanal Sugar Unit is being modernised withefficient condensers & spray pond.

(c) Impact of the measures at [a] and [b] above forreduction of energy consumption and consequentimpact on the cost of production of goodsThe power consumption will reduce substantiallyby which cost of production will also reducemarginally. Moreover these measures will providemore comfort in operations and performance.

PARTICULARS OF EMPLOYEESThe Company has no employee drawing remunerationattracting the provisions of section 217(2A) of theCompanies Act, 1956.

AUDITORS' REPORTWith reference to the Auditors' remarks, your Directorswish to state as under:1. As regards delayed remittance of Provident Fund/

E.S.I, dues, it is ensured that there would be nodelays during the current year and effective stepshave already been initiated in this regard. PFarrears to the extent of Rs.21,44,692/- will be

remitted to the appropriate authorities at theearliest.

2. Effective steps would be taken for recovery ofadvances outstanding.

3. The Financial Restructuring Package has becomefinal and as such the reduction in interest hasbeen given effect to.

4. We have been advised that the adjustment ofcurrent year's loss and new process developmentexpenses directly against Capital Reserve isnot violative of any Statute or AccountingStandard.

ACKNOWLEDGEMENTYour Directors wish to place on record theirappreciation of the valuable assistance and co-operationextended by the shareholders, cane growers,Commercial Banks, Financial Institutions andGovernment authorities. They also wish to appreciatethe dedicated service rendered by officers, staff andworkers of the Company.

Coimbatore30.09.2003

By Order of the Board

N. MAHALINGAMChairman

10



ANNEXURE - 1 TO THE DIRECTORS' REPORT FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2003ENERGY CONSERVATION MEASURES - FORM - A

Disclosure of Particulars with respect to conservation of EnergyPARTICULARS CURRENT YEAR PREVIOUS YEAR

A. POWER AND FUEL CONSUMPTION1. ELECTRICITY:

a) PurchasedUnitsTotal Amount (Rs.in lakhs)Rate/Unit (Rs.)

b) Own Generationi) Through Diesel Generator - Units

Diesel Oil (Ltrs.)Total Consumption ValueUnits per Ltr of Diesel OilCost/Unit (Rs.)

ii) Through Steam Turbine/Generator - UnitsUnits per Ltr of Fuel Oil/Gas

Cost/Unit2. COAL

Quantity (Tonnes)Total Cost (Rs.in lakhs)Average Rate per Tonne (Rs.)

3. FURNACE OILQuantity (K.Ltrs)Total Cost (Rs.in lakhs)Average Rate per Litre (Rs.)

4. FIREWOODQuantity (Tonnes)Total Cost (Rs.in lakhs)Average Rate per Tonne (Rs.)

5. OTHERS/INTERNAL GENERATIONa) Bagasse (MT)

Total (Cost)Rate/Unit

b) Bio GasQuantity (Cu.Mtr)Total Cost

Rate/Unitc) Paddy Husks

Quantity (Tonnes)Total Cost (Rs. in lakhs)Rate/Unit (Rs.)

d) Coconut Shell ChipsQuantity (Tonnes)Total Cost (Rs. in lakhs)Rate/Unit (Rs.)

4789994254.46

5.31

1328387471265

83.952.826.32

3513499269.62

per tonne of Steam

746.47018.02

2414.03

378.04947.6212.60

6815.00076.53

1122.96

261294Own Bagasse is used

9374161Generated out

of DistilleryEffluent

811.73012.64

1557.17

653.16012.71

1945.92* Own steam and steam obtained from TNPL in exchange of bagasse, was used.B. CONSUMPTION PER UNIT OF PRODUCTION

Current Year

5760448289.14

5.02

1063624373277

64.412.856.06

4061499276.94

per tonne of Steam

219.6554.62

2103.30

613.82167.0310.92

260.5403.45

1324.17

229639Own Bagasse is used

11821412Generated out

of DistilleryEffluent

2547.33034.99

1373.60

6359.94592.74

1458.19

Previous YearProducts (with details)UnitElectricity (Units)Furnace Oil (Ltrs)Coal (M.Tonnes)Others : Bio-gas (Cu. Mtrs.)

SugarOIL

22.810.01

AlcoholLtrs.0.190.01

0.34

SoyaMTs.

185.2910.390.05

SugarQtl.

19.41

AlcoholLtrs.0.220.01

0.41

SoyaMTs.

194.6716.440.01

11


FORM-BDisclosure of particulars with respect to Technology Absorption

RESEARCH AND DEVELOPMENT (R & D)1. Specific areas in which R & D carried out by

the Companya. Sugar cane varietal trials taken up in R & D

farm as well as in farmers' fields.b. Drip irrigation system has been introduced

in the command area of Tamilnadu sugarunits.

2. Benefits derived as a result of the aboveR & Da. Varieties of sugar cane suitable for different

months of planting and age at harvest havebeen indentified.

b. Effective water and nutrition managenent tosugar cane crop have been achieved. Thereis significant improvement in cane yield bythe adoption of drip irrigation system.

3. Future plan of actiona. Production of fine sugar with minimum black

specks to meet the requirement of soft drinkmanufacturer.

b. To evolve set of package of practices suit-able for problematic soil areas and effectivefertiliser schedule for micro irrigation plotsbased on plant analysis.

c. Adoption of Biological pest control mea-sures on a large scale.

4. Expenditure on Research and Development(Rs. in lakhs)

a) Capital b) Recurring 0.93c) Total 0.93d) Total R&D expenditure as

a percentage of total turnover 0.29TECHNOLOGY ABSORPTION, ADAPTATIONAND INNOVATION1. Efforts in brief made towards technology

absorption, adaptation and innovationa. Field staff are deputed to participate in

conferences, seminars and meetingsorganised by Sugar Cane Breeding Instituteand other Institutions to improve and updatethe technical knowledge in their respectivefields.

b. Brazilian Technology with respect tospraying of effluent in the compostingprocess has been modified to suit Indianconditions and is used in SakthiNagar.

c. Drip irrigation system using low dischargeemitters have been adopted to conserve water.

2. Benefits derived as a result of the above efforts,e.g. product improvement, cost reduction,product development, import substitution, etc.a. Field staff are equipped with latest technology

and field practices.b. Utilisation of effluents effectively adds

neutrient value to compost.c. More acres of land are brought under sugar

cane intime with limited availability of waterbesides improving the cane yield.

3. In case of imported technology (importedduring the last 5 years reckoned from thebeginning of the financial year) followinginformation may be furnished.a) Technology importedb) Year of Importc) Has technology been

fully absorbed?d) If not fully absorbed, | Not Applicable

areas where this hasnot taken place, reasonstherefor and futureplans of action

FOREIGNOUTGO

EXCHANGE EARNINGS AND

Foreign Exchange earned duringthe year

(Rs, in lakhs)6876.37

1. OUTGO:Subscription and Membership 0.37Consultancy charges 4.14Sales Promotion expenses 2.86Foreign Travel

IMPORTa. Raw Sugarb. Spares and Othersc. Capital Goods

Total

26.88

3923.0421.2377.41

34.25

4021.684055.93

12



CORPORATE GOVERNANCECompany's PhilosophyThe Company's philosophy on Corporate Governance endeavours attainment of the highest levels of transparency,accountability and equity in all facets of its operations and in all the interactions with its stakeholders, includingshareholders, employees, cane growers, lenders and the Government.

Board of DirectorsThe Board comprises of a Non-Executive Director as Chairman, a Vice Chairman and Managing Director, whois an Executive Director and fifteen other Non-Executive Directors, including five Directors nominated by AllIndia Financial Institutions, Bank, Insurance Companies and TIDCO.

Board Meetings and AGM AttendanceThe Board met 6 times during the financial year on 27.8.2002, 24.9.2002, 31.10.2002, 18.12.2002, 24.2.2003and 29.4.2003. As provided in clause 49 of the Listing Agreement relating to Corporate Governance, the Boardhas formed Audit Committee, Remuneration Committee and Shareholders/Investors Grievance Committee. Detailsof attendance of each Director at the Board Meetings and at last Annual General Meeting held on 18.12.2002are given below:

Name of the Directors Category ofDirectorships

Financial Year2002-03

Attendance atBoard Last AGM

No. ofDirector-ships*

Committee positionChairman Member

(Other than SSL)

Dr N MahalingamChairman

Sri M ManickamVice Chairman &Managing Director

Sri K K RamaswamyGounder

Sri D Periaswamy

Sri P K Chandran

Sri G G Gurumurthy

Dr J Thuljaram Rao **Sri P N Sengodappan***

Sri S S Muthuvelappan

Sri Kara Seemaichamy

Sri M Balasubramaniam

Sri N K Vijayan_Sri M Srinivaasan

Sri V K Swaminathan

Sri S SaravananNominee of TIDCO

PromoterNon-Exeuctive Director

PromoterExecutive Director

Non-Executive Director

Non-Executive

Non-Executive

Non-Executive

Non-Executive

Non-Executive

Non-Executive

Non-Executive

PromoterNon-Executive

Director

Director

Director

Director

Director

Director

Director

Director

Non-Executive Director

PromoterNon-Executive

Non-Executive

Non-Executive

Director

Director

Director

3

6

6

1

4'

5

6

3

6

1

4

2

Yes

Yes

Yes

No

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

1

14

13

10

23

13


Sri K Bharathan @ Non-Executive Director 3 NoNominee of ICICISri C Rangamani Non-Executive Director 6 YesNominee of GICISri T Prakash Non-Executive Director 5 YesNominee of IDBI

Sri M Pandi Non-Executive Director 6 YesNominee of IIBI* Excluding directorships in private limited companies** Retired*** Deceased@ Substituted by Smt. Smita Gune w.e.f. 19.8.2003

Audit CommitteeOn account of retirement of Dr.J Thuljaram Rao, Chairman of the Committee, the Board reconstituted theCommittee by appointing Sri P K Chandran in the place of Dr J Thuljaram Rao.The Audit Committee met three times during the financial year on 29.8.2002, 23.9.2002 and 20.2.2003.

Name of Member No.of meetings No.of meetingsHeld Attended

1. Dr J Thuljaram Rao 3 22. Sri V K Swaminathan - Chairman 3 33. Sri M Balasubramaniam 3 34. Sri P K Chandran 3 1

Sri M Pandi, Nominee of IIBI has been inducted into the Committee on 29.4.2003.

The role and terms of reference of the present Audit Committee covers the areas mentioned under clause 49 ofthe Listing Agreement and Section 292A of the Companies Act 1956, besides other terms as may be referredto by the Board of Directors from time to time.

Remuneration CommitteeUpon retirement of Dr J Thuljaram Rao, the Company re-constituted the Remuneration Committee. At presentthe Committee consists of the following three Non-Executive Directors.

1. Sri S S Muthuvelappan - Chairman2. Sri V K Swaminathan .3. Sri P K Chandran

The remuneration committee will determine and recommend to the Board the remuneration including commission,perquisites and allowances payable to the Managing Director as and when the necessity arises. The recommendationwill be based on overall performance and financial results of the Company during the relevant financial year andalso based on evaluation of performance on certain fixed parameters.

' The Committee met on 5.9.2003 for the purpose of recommending to the Board the remuneration payable toSri.M.Manickam, Vice Chairman and Managing Director upon his reappointment as Managing Director witheffect from 9.9.2003.

Details of remuneration paid to the Vice Chairman and Managing Director are given in Schedule No.23. All theNon-Executive Directors are paid a sitting fee of Rs.2000/- for each Board Meeting attended by them.

14



Shareholders/Investors Grievance CommitteeThe Shareholders/Investors' Grievance Committee was formed on 31.1.2002 to look into the redressing ofshareholders/investors complaints, if any, on transfer of shares, non-receipt of balance sheet, non receipt ofdeclared dividend, etc. and also the action taken by the Company on those matters.The committee was reconstituted on 18.12.2002 and at present the Shareholders/Investors' Grievance committeeconsists of :

1. Dr N Mahalingam - Chairman2. Sri M Manickam3. Sri M Balasubramaniam

Sri S Baskar, Company Secretary, is the Compliance Officer.The Company had received 18 complaints from the shareholders during the financial year 2002-2003. All thecomplaints were attended to the satisfaction of the shareholders. No share transfer was pending as on 30.6.2003.

General Body MeetingDetails of Annual General Meetings:Last three Annual General Meetings were held at the location and time mentioned below:

AGM Date Venue Time

39th 07.12.2000 Registered office at Sakthi Nagar 3.15 p.m.Bhavani Taluk, Erode District.

40th 28.12.2001 -do- 3.00p.m.41st 18.12.2002 - do - 3.00 p.m.

During the year 2002, the procedure of postal ballot was carried out for the special resolutions relating toamendment to the object clause of the Memorandum of Association and commencement of new business. SriM Easwaran, Practising Company Secretary was appointed as Scrutinizer for conducting the postal ballot process.The details of voting pattern of the two special business are furnished hereunder:

In favour Against

1. Amendment to Object Clause ofMemorandum of Associationa. Number of Members voted 1544 28b. Number of Shares 18343315 6610c. % of shares voted 99.96 0.04

2. Commencement of new businessa. Number of Members voted , 1463 26b. Number of Shares 18332188 6895c. % of shares voted 99.96 0.04

The results of the Postal ballot were announced at the 41st Annual General Meeting held on 18th December, 2002.No resolution is proposed to be voted through postal ballot this year.

DisclosuresThe details of related party transactions are given in the Notes on Accounts. These transactions are not in conflictwith the interest of the Company.There are no instances of non-compliance relating to capital markets during the last three years.

15


Means of CommunicationThe quarterly/half yearly/annual financial results of the Company are announced within the stipulated time andare normally published in English and Tamil newspapers.

Shareholders InformationAnnual General Meeting

Day and DateTimeVenueFinancial Calender

Thursday 18th December, 20033.00 P.M.Sakthi Nagar-638 315, Erode District, Tamil Nadu1st July 2002 to 30th June 2003

Results for the quarter ending30th September 200331st December 200331st March 200430th June 2004 (audited)

Date of Book ClosureShare Price MovementThe high and Low quotations of the Company's shares on The Stock Exchange, Mumbai and National StockExchange from July 2002 to June 2003 are furnished below:

Result announcementLast week of October 2003Last week of January 2004Last week of April 2004Last week of September 200410.12.2003 to 18.12.2003 (both days inclusive)

MonthNSE BSE

High Low High Low(Rupees) (Rupees)

SENSEX (BSE)High Low

July 2002August 2002September 2002October 2002November 2002December 2002January 2003February 2003March 2003April 2003May 2003June 2003

15.2010.159.509.309.159.008.807.307.006.908.60

11.40

8.307.257.406.657.207.706.505.605.005.007.957.65

14.909.959.458.659.00

10.208.357.456.756.508.65

'11.40

8.057.507.757.257.057.906.755.805.055.155.507.55

3366.743185.083227.623038.923245.98 ,3413.833416.923341.613311.573221.903200.483632.84

2932.352931.782973.972828.482928.633186.623199.183218.373039.832904.442934.783170.38

ListingThe Company's equity shares are listed on the following Stock Exchanges and the Annual Listing Fees have beenpaid to all the stock exchanges for the financial year 2003-04.

Stock CodeCoimbatore Stock Exchange Limited 21009Stock Exchange Building683-686, Trichy Road, Coimbatore 641 005Madras Stock Exchange Limited SSRExchange Building, 11, Second Line BeachP B No.183, Chennai 600 001The Stock Exchange 507315Phiroze Jeejeebhoy TowersDalai Street, Fort, Mumbai 400 001

16



Bangalore Stock Exchange Limited SAKTHISUGStock Exchange Towers51, First Cross, J C RoadVasant Nagar, Bangalore 560 027National Stock Exchange of India Limited SAKHTISUGExchange Plaza, Bandra Kurla ComplexBandra (East), Mumbai 400 051It is proposed to delist the Company's shares from Madras Stock Exchange Limited and Bangalore StockExchange Limited.Registrar and Share Transfer AgentsIn order to comply with the Guidelines issued by SEBI, Intime Spectrum Registry Ltd have been appointed witheffect from 1.4.2003 as the Registrars and Share Transfer Agents of the Company to look after both physical andelectronic segments. The addresses of Intime Spectrum Registry Limited are furnished below:Shareholders/Investors Relation Centre:Surya 35, Mayflower AvenueBehind Senthil Nagar, Sowripalayam RoadCoimbatore - 641 028. Phone No: 0422 2314792 Fax No: 0422 2316755Email: [email protected] Office:No.260 A, Shanti Industrial EstateSarojini Naidu RoadMulund (W), Mumbai - 400 080. Phone No: 022 25923837 (10) LinesFax No: 022 25672693. Email: [email protected] Transfer SystemThe Shares lodged in physical form are processed, registered and returned by the Registrar and Share TransferAgents within a period of 30 days from the date of receipt, if the documents are in order.Distribution of Shareholdings as on 30th June 2003.

Share holdings No.of Shareholders

Jo of shareholders

Number ofShares

% of shareholding

12,5015,00110,00120,00130,00140,00150,001

1,00,001

- 2,500- 5,000- 10,000- 20,000- 30,000- 40,000- 50,000- 1,00,000& above

233182417111745913759376163

84.288.744.041.660.500.21

. 0.130.220.22

1648550951936880812676940342714213438175184455064

22387428

5.943.433.182.441.240.770.631.6480.73

Total 27668 100.00 27732066 100.00Shareholding pattern as on SO* June 2003

Category No.of shares held % of shareholdingPromoters and associates'Nationalised Banks/other BanksFinancial InstitutionsMutual FundsFIIS/NRISOther Bodies CorporatePublic

15894912169315

271286046404195235

3941708001533

57.320.619.781.670.341.42

28.8,6Total 27732066 100.00

17


Dematerialisation of shares and LiquidityThe shares of the Company are in compulsory demat segment. The company's shares are available for denialboth with the National Securities Depository Limited (NSDL) and the Central Depository Services (India)Limited (CDSL). International Securities Identification Number (ISIN) allotted to the equity shares of theCompany is INE623A01011.As on 30th June 2003, 5896088 equity shares of the Company representing 21.26% have been dematerialized.

Plant locationSugar Unit 1, Distillery Unit I & : Sakthi Nagar-638 315Co-Generation plant Bhavani Taluk, Erode DistrictSugar Unit II & Beverage Plant : Padamathur Village-630 561

Sivaganga District, Tamil NaduSugar Unit III : Sunapal, Barambagarh-754 031

Cuttack District, OrissaSugar Unit IV & Distillery Unit II : Haripur Village.Korian Post-759 013

Dhenkanal District, OrissaSoya Unit : Marchinaickenpalayam

Ambarampalayam Post-642 103Coimbatore District

Address for correspondenceSakthi Sugars Limited, Phone Nos : 0422-2221551-4180, Race Course Road Fax Nos. : 0422-2220574 & 2220329Coimbatore - 641 018. E-mail : [email protected]

AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCETo

The Members of Sakthi Sugars Limited,We have examined the compliance of conditions of Corporate Governance by Sakthi Sugars Limited for the yearended on 30" June 2003, as stipulated in Clause 49 of the Listing Agreement of the said Company with StockExchanges.The compliance of conditions of corporate governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the company for ensuring the compliance ofthe conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.In our opinion and to the best of our information and according to the explanations given to us, we certify thatthe company has complied with the conditions of Corporate Governance as stipulated in the above mentionedListing Agreement.We state that no investor grievance is pending for a period exceeding one month against the company as per therecords maintained by the Shareholder's Grievance Committee.We further state that such compliance is neither an assurance as to the future viability of the company nor theefficiency or effectiveness with which the management has conducted the affairs of the company.

For P.N. RAGHAVENDRA RAO & Co.,Chartered Accountants

Place : Coimbatore P.R. VITTELDate : 30.9.2003 Partner

18



MANAGEMENT'S ANALYTICAL REPORTAn overviewThe Company is engaged in the business of manufacture of white crystal sugar, industrial alcohol and soyaproducts. Molasses, one of the bye-products, is used in the distillery for manufacture of industrial alcohol. Press-mud is processed and converted into bio-fertiliser for direct application in fields. The Company has entered intoan arrangement with Tamil Nadu Newsprints and Papers Limited under which the bagasse produced by theCompany is exchanged for steam required for operation of the mill and the boilers at Sakthinagar.The Co-generation plant erected at Sakthinagar with a capacity to produce 32 MW of power is expected tocommence commercial production during the fourth week of October 2003.The Ethanol plant with a capacity to produce anhydrous alcohol of 12500 KL per annum at Sakthinagar and aBottling Plant with a bottling capacity of 600 bottles per minute at Sivaganga are ready for commencement oftheir commercial production.Industry Structure and DevelopmentDuring the crushing season 2001-2002, the total level of production of sugar in India was 185.271akhs MTs. Theglut in the sugar market had an adverse effect on the pricing front and the free sale sugar price had touched rockbottom level. This was due to off-loading of sugar stock by some of the sugar mills based on the Court Orderswithout obtaining release orders from the Government. However, the Government has taken certain correctivemeasures by making necessary amendment in the Essential Commodities Act. Rays of hope are visible as theprice for free sale sugar is gradually picking-up.The Government has decided to create a buffer stock of 20 lakh tonnes of sugar for a period of one year. TheCentral Government has notified to reimburse the internal transportation cost and freight charges on exportshipment of sugar upto an extent of Rs.350 per tonne with a view to encourage export of sugar.Blending of ethanol with petrol upto 5% has been made mandatory in nine States and four Union Territorieseffective from 30th June 2003.Opportunities and threatsWhile the policy of the Government with respect to mixing of ethanol with petrol and creation of buffer stockupto 20 lakh tonnes will be encouraging factors to the industry, over production of sugar and resultant glut inthe market pose threat to the industry. The action of the Government with respect to implementation of releasemechanism of sugar stock may help in firming up of sugar price. The drought situation in Tamil Nadu willadversely affect the availability of sugarcane and thereby the level of crushing during the ensuing season wouldlikely to come down.All new projects, viz. co-generation plant, ethanol plant and bottling plant will commence their operations shortlyand generate sizable revenue to the company.Segmentwise and Productwise performanceSegmentwise results are given in the accounts for the year ended 30.6.2003. Productwise performance is furnishedin the Directors Report.Financial performance with respect to Operational PerformanceThe gross income for the year under review is Rs.27958.58 lakhs. The year has ended with a gross profit ofRs.1002.76 lakhs (previous year profit Rs.8122.21 lakhs). After providing Rs.1347.49 lakhs for depreciation, thenet loss for the year is Rs.5315.77 lakhs. No provision has been made for income tax.Internal Control SystemThe Company has an in-house internal audit function to ensure that all activities are monitored and controlled.Adequate internal checks are built in to cover all monetary transactions. These checks and controls are reviewedfor improvement periodically.Human Resources DevelopmentIndustrial relations at all plants and offices remain cordial. The total number of employees at the end of thefinancial year 2002-03 on the rolls of the Company was 1999. Training programmes are conducted dependingupon the needs for updating the knowledge with respect to the developments in the industry.

19


AUDITORS' REPORT TO THEMEMBERSWe have audited the annexed Balance Sheet ofM/s. SAKTHI SUGARS LIMITED as at 30th June2003 and also the Profit and Loss account for the yearended on that date attached thereto and Cash FlowStatement for the year ended on that date. These financialstatements are the responsibility of the Company'smanagement. Our responsibility is to express an opinionon these financial statements based on our audit.We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. Our auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.Our audit also includes assessing the accountingprinciples used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our auditprovides a reasonable basis for our opinion.I. As required by the Manufacturing and other

Companies (Auditor's Report) Order 1988, issuedby the Government of India in terms of sub-section(4A) of Section 227 of the Companies Act,1956, we furnish below a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.i. We find that the Company is maintaining

proper records showing full particularsincluding quantitative details and situationof fixed assets. As informed to us the fixedassets have been physically verified by themanagement at reasonable intervals and nomaterial discrepancies were noticed onsuch verification.

ii. The Company has revalued land, buildings,plant and machinery and electricalequipments during the year, based uponthe valuation report of an approved valuer.The land has been valued at guidance/market value and buildings, plant andmachinery and electrical installation havebeen valued taking into considerationreplacement value, age of the asset andestimated remaining useful life.The difference between book value andmarket value as per the valuer's report ofthe revalued assets is Rs 30045.71 lakhs.The other assets such as development ofproperty- Eco friendly trees, molasses andalcohol storage tanks, office equipments,

furniture and fixtures, laboratory apparatusand motor vehicles are not revalued duringthe year.

iii. According to our information physicalverification has been conducted by themanagement at reasonable intervals inrespect of finished goods, stores, spareparts and raw materials.

iv. In our opinion, procedures of physicalverification of stocks followed by themanagement are reasonable and adequatein relation to the size of the Company andthe nature of its business.

v. No material discrepancy has been noticedon physical verification of stocks, ascompared to book records.

vi. On the basis of our examination we aresatisfied that valuation of stocks is fair andproper in accordance with normallyaccepted accounting principles. The basisof valuation of stocks is same as in thepreceding year.

vii. The Company has taken unsecured loanfrom a company, listed in the registermaintained under section 301 of theCompanies Act, 1956. The rate of interestand terms and conditions of such loansare prima facie not prejudicial to theinterests of the Company.

viii. The Company has granted unsecured loansto companies and other parties listed inthe register maintained under section 301of the Companies Act, 1956. The rate ofinterest and terms and conditions of suchloans are prima facie not prejudicial to theinterests of the company.

ix. The parties and employees to whom loansand advances in the nature of loans givenby the company are generally repaying theprincipal amount as stipulated and theinterest wherever applicable, other than Rs.163.05 lakhs due from Cane growers.

x. In our opinion there is adequate internalcontrol procedure commensurate with thesize of the Company and the nature of itsbusiness for the purchase of stores, rawmaterials including components, plant andmachinery equipment and other asset andfor the sale of goods.

xi. The transactions of purchase of goods,materials and services made in pursuanceof contracts or arrangements entered in the

20



register maintained under section 301 ofthe companies Act, 1956, aggregatingduring the year to Rs.50,0007- or more inrespect of each party have been made atprices which are reasonable having regardto the prevailing market prices for suchgoods, materials or services. There are nosale of goods, materials and services tointerested persons covered under section301 of the Companies Act, 1956.

xii. According to our information, there areno unserviceable or damaged stores, rawmaterials or finished goods requiringprovision for loss.

xiii. According to us, the company hascomplied with directives issued by theReserve Bank of India and the provisionsunder Section 58A of the Companies Act,1956 and rules framed there under in respectof deposits accepted from the Public.

xiv. In our opinion the company is maintainingreasonable records for the sale and disposalof realizable by-products and scrap.

xv. In our opinion the Company has an internalaudit system commensurate with its sizeand nature of its business.

xvi. According to details furnished to us costrecords prescribed by the CentralGovernment under section 209(1) (d) of theCompanies Act, 1956 in respect of Sugarand Distillery Units are being maintained.

xvii. The Providend Fund/E.S.I, dues have notgenerally been regularly deposited with theappropriate authorities though the delaysin deposit have not been serious. Furtherthere are PF arrears as on the closingdate to the extent of Rs. 21,44,692/-.

xviii. There are no undisputed amounts payablein respect of income tax, wealth tax, salestax, customs duty and excise duty whichare outstanding for more than six monthsfrom the date they became due.

xix. As per our verification no personal expenseshave been charged to the revenue account.

xx. The Company is not a Sick IndustrialCompany within the meaning of Clause(o) of sub section (i) of Section 3 of theSick Industrial Companies (SpecialProvisions) Act, 1985.

II. Further to our comments under Para I above:i. The interest reduction ofRs.455.85 Lakhs

as per the Financial Restructuring Packageapproved by the Corporate Debt

Restructuring Cell has been given effect toeven though the documentation is notcomplete.

ii. The current year's loss ofRs.4827.0l lakhsand new process development expenses ofRs.3096.73 lakhs have been adjustedagainst Capital Reserve, which is not inconformity with the Guidance Note issuedby The Institute of'Chartered Accountantsof India and the Generally AcceptedAccounting Principles.

Ill Further to our comments under Paras I and II above:i. We have obtained all the information and

explanations, which to the best of ourknowledge and belief were necessary forthe purpose of our audit.

ii. In our opinion, proper books of accountsas required by law have been kept by theCompany so far as appears from ourexamination of the books.

iii. The Balance Sheet and Profit and LossAccount dealt with by this report are inagreement with the books of account.

iv. The Balance Sheet and Profit and LossAccount dealt with by this report complywith the Accounting Standards referred toin Section 211(3C) of the Companies Act,1956 so far as applicable.

v. As per the information and explanationsgiven to us, none of directors of theCompany is disqualified under clause (g)of sub-section (1) of Section 274 of theCompanies Act, 1956.

vi. In our opinion and to the best of ourinformation and according to theexplanations given to us, the said accountsread together with notes to accounts givethe information required by the CompaniesAct 1956 in the manner so required andshow a true fair view:a) in the case of the Balance Sheet, of

the state of affairs of the Company asat 30.06.2003;

b) in the case of the Profit and LossAccount, of the Loss for the year endedon that date and

c) in the case of Cash Flow Statement, ofthe cash flows for the year ended onthat date.

For P.N. RAGHAVENDRA RAO & Co.,Chartered Accountants '

CoimbatoreSeptember 30, 2003

P.R. VITTELPartner

21


BALANCE SHEET AS AT 30.6.2003Schedule

No.

I.

II.

-

SOURCES OF FUNDS :

(1) SHAREHOLDERS' FUNDS :(a) Share Capital 1(b) Reserves and Surplus 2

(2) DEFERRED TAX LIABILITY

(3) LOAN FUNDS :(a) Secured loans 3(b) Unsecured loans 4

TOTAL of 1 to 3

APPLICATION OF FUNDS :

(1) FIXED ASSETS:Gross Block

Less : Depreciation

Net Block 5

Add : Capital Work in Progress

Add : Increase in Value on account of Revaluation(Please refer Note No. 17 of Schedule 23)

(2) INVESTMENTS 6

(3) (i) CURRENT ASSETS, LOANS ANDADVANCES:

(a) Inventories 7(b) Sundry Debtors 8(c) Cash and Bank balances 9(d) Other Current Assets 10(e) Loans and Advances 1 1

Carried over

As at30.6.2003

(Rs.

3973.21

31143.47

35116.68

556.04

37458.85

7761.84

45220.69

80893.41

30960.38

11971.58

18988.80

5268.12

30045.71

54302.63

5160.53

6433.51

2485.02

747.20

5076.34

16584.64

31326.71

As at30.6.2002

in lakhs)

3973.21

9286.19

13259.40

1074.52

30996.72

7359.35

38356.07

52689.99

30125.09

10648.26

19476.83

726.82

-

20203.65

5145.46

8832.08

1716.41

788.78

8462.04

15438.42

35237.73

22



ScheduleNo.

Brought forward

Less :

ii) CURRENT LIABILITIES AND PROVISIONS: 12Net Current Assets (i) - (ii)

(4) MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

TOTAL of 1 to 4

13

As at As at30.6.2003 30.6.2002

(Rs. in lakhs)31326.71

10531.42

20795.29

634.96

80893.41

35237.73

8748.01

26489.72

851.16

52689.99

Schedules 1 to 13 and Notes in Schedules 23 and 24 form part of this Balance Sheet

Vide our report annexedFor P.N. RAGHAVENDRA RAO & Co.Chartered Accountants .

P.R. VITTELPartner



S. BASKARCompany Secretary

M. MANICKAMVice Chairman andManaging Director

23


PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED 30.6.2003

ScheduleNo.

I. INCOME:

Sales 14

Processing Charges for Crude Palmolein

Dividend

Interest

Other income 15

Value of Advance Licence / DFRC Credited

Stock adjustment 16

II. EXPENDITURE:

Cost of Goods Consumed / Sold 17

Opening stock

Add : Purchases

Less: Closing stock

Purchase of Goods for Sale

Manufacturing expenses 18

Excise Duty

Salaries, Wages and other employee benefits 19'

Interest Charges 20

Selling expenses 21

Any other expenses 22

Depreciation

Net Profit/Loss

Prior year adjustments - Net

m. PROFIT/LOSS BEFORE TAX

Provision for Taxation

FiguresCurrent

Year ended30.6.2003

(Rs. in

32,221.35

3.45

352.64

817.99

99.25

(5,536.10)27,958.58

496.56

16,433.34

16,929.90

376.42

16,553.48

2,016.46

2,984.56

1^26.05

1,866.96

4,971.04

898.41

1,309.90

1,347.49

33,274.35

(5,315.77)114.99

(5,430.76)

for thePrevious

Year ended30.6.2002

lakhs)

45,022.47

87.41

3.47

895.12

1,711.69

5,598.84

(11,468.53)41,850.47

360.58

21,631.53

21,992.11

496.56

21,495.55

1,340.80

3,847.01

2,021.85

2,178.48

6,330.22

1,472.42

1,372.15

1,309.48

41,367.96

482.51

18.80

463.71

24



IV. PROFIT/LOSS AFTER TAX

Add:

Surplus from previous year

Excess provision withdrawn

Reversal of Provision for Diminution in Value

of Investments

Deferred Tax - Current year

Transfer from Storage Reserve

APPROPRIATIONS:

Proposed Dividend on Preference shares

Transfer to Debenture Redemption Reserve

Surplus / Deficit carried over

Figures for theCurrent Previous

Year ended Year ended30.6.2003 30.6.2002

(Rs. in lakhs)

(5,430.76)

52.55

1.3215.57

518.48

15.83(4,827.01)

463.71

465.27

0.78

4.89

33.90

968.55

152.00

764.00

(4,827.01) 52.55

Schedules 14 to 22 and Notes in Schedules 23 and 24 form part of this Profit and Loss Account

Vide our report annexedFor P.N. RAGHAVENDRA RAO & Co.Chartered Accountants

P.R. VITTELPartner



S. BASKARCompany Secretary

M. MANICKAMVice Chairman andManaging Director

25


SCHEDULE - 1SHARE CAPITALAuthorised:5,00,00,000 Equity Shares of Rs.10 each

50,00,000 Redeemable Cumulative Preference Shares of Rs.100 each

ISSUED:2,78,48,735 Equity Shares of Rs.10 each

10,00,000 12.50% Redeemable Cumulative Preference Shares ofRs.100 each


SUBSCRIBED AND PAIDUP:2,77,32,066 Equity Shares of Rs.10 each fully paid up



TOTALSCHEDULE 2RESERVES AND SURPLUS:Capital Reserve :Balance as per last Balance SheetAdd: Difference between Market Value and book value of Land, Buildings,

Plant and Machinery and Electrical Installations

Less: Debit balance in Profit and Loss account adjusted

Less : New Process Deveopment Expenses:-a) Net Deficit 265.97b) Value of Advance Licence/DFRC adjusted 2,830.76

Subsidy from Government:Balance as per last Balance SheetCapital Redemption Reserve :Balance as per last Balance SheetShare Premium Account :Balance as per last Balance SheetAdd: Received during the year

Less: Public/Debenture Issue Expenses Adjusted: -Earlier yearsCurrent year

- General Reserve :Balance as per last Balance SheetAdd: Transfer from Debenture Redemption Reserve

Less: Transferred to Deferred Tax Liability

As at30.6.2003

(Rs.

5,000.005,000.00

10,000.00

2,784.871,000.00

200.00

3,984.87

2,773.211,000.00

200.00

3,973.21

1,619.2630,045.71

31,664.974.827.01 ,

26,837.96

3096.7323,741.23

44.23

1,312.27

2,678.47

176.1420.17

2,482.16

2,109.58500.00

2,609.58

2,609.58

As at30.6.2002

in lakhs)

5,000.005,000.00

10,000.00

2,784.871,000.00

200.00

3,984.87

2,773.211,000.00

200.00

3,973.21

1,619.26

1,619.26

1,619.26

1,619.26

44.23

1,312.27

2,375.32303.15

2,678.47

3,218.00

3,218.001,108.422,109.58

26



SCHEDULE - 2 (Contd.)Preference Shares Redemption Reserve :Balance as per last Balance SheetDebenture Redemption Reserve :Balance as per last Balance SheetAdd: Transfer from Profit & Loss Account

Less: Transferred to General Reserve

Storage Reserve :Balance as per last Balance SheetLess: Transferred to Profit and Loss account

Surplus :Balance in Profit and Loss Account

TOTALSCHEDULE - 3SECURED LOANSA. DEBENTURES

Secured Partly Convertible Debentures - IV SeriesSecured Redeemable Non-convertible Debentures - VI SeriesSecured Redeemable Non-convertible Debentures - VII SeriesSecured Redeemable Non^convertible Debentures - VIII SeriesSecured Redeemable Non-convertible Debentures - IX SeriesInterest accrued and due on the above

B. LOANS AND ADVANCES:FROM BANKSa) Term Loans

Interest accrued and due on the aboveb) Hypothecation Loans for working capital

Interest accrued and due on the above

FROM FINANCIAL INSTITUTIONSTerm LoansInterest accrued and due on the aboveFROM OTHERSi) From Government of India/TIFAC

Interest accrued and due on the aboveii) Hire Purchase /Mortgage Loans from Limited companies

Interest accrued and due on the above

TOTALSCHEDULE - 4UNSECURED LOANS

Fixed DepositsLoan under Sales Tax deferral schemeShort-term Loans from BanksOther Loans and AdvancesInterest accrued and due on the above

TOTAL

As at30.6.2003

(Rs.

100.00

1354.001354.00

500.00854.00

15.8315.83

31,143.47

752.61839.40

1,700.001,000.00

343.334,63534

14,155.10 ,44438

10,862.71599.72

26,061.91

4,590.11601.51

1,061.79122.26317.8568.08

6.761.6037.458.85

3339.491,081.132,115.00

994.27231.95

7,761.84

As at30.6.2002

in lakhs)

100.00

590.00764.00

1,354.00

1,354.00

15.83

15.83

52.559,286.19

752.61839.40

1,700.001,000.001,000.00

145.27 '5,437.28

7,221.64191.40

10,963.82172.78

18,549.64

4,782.54292.74

1,073.8055.75

770.8834.09

7,009.8030,996.72

3,206.371,347.172,275.00

473.1457.67

7,359.35

27

Sakt

hi Su

gars

Li

mite

d

SCHE

DULE

- 5

FIXE

D A

SSET

S:

Partic

ulars

REVA

LUED

AS

SETS

:

Land

Build

ings

Plant

& M

achin

eryEl

ectric

al Ins

tallat

ions

OTHE

R AS

SETS

:

Land

Dev.o

f Eco

.Frien

dly Tr

ees

Build

ings

Plant

& M

achin

eryM

ol. Al

coho

l Stor

age

Tank

Elec

trical

Insta

llatio

nsOf

fice

Equip

ments

, Fu

rnitu

rean

d Fix

tures

Labo

ratory

Ap

parat

usM

otor

vehic

lesTo

talW

ork in

Prog

ress

Total

for

the

Ye

arPr

eviou

s Ye

arNo

te: La

nd,

Build

ings,

Plant

&

(Rs. in

lak

hs)

As on

1.7.20

02

1327

.8856

45.75

1982

7.79

1263

.1828

064.6

0 .

33.46

53.67

835.7

453

.3610

84.26

2060

4972

6.82

3085

1.91

2946

3,22

GROS

S

Addit

ions

16.34 0.7

912

3.67

493.8

5

181.1

9

45.92 0.6

89.8

687

2.30

4690

.4155

62.71

2365

.55

BLOC

K

Dedu

ctions

4.28

2.23

4.42

10.93 12.52

13.56

26.08

149.1

118

6.12

976.8

6

DEPR

ECIA

TION

As on

30.6.2

003

1323

.6056

45.75

1982

5.56

1258

.7628

053.6

7

1634

34.25

123.6

749

3.85

53.67

181.1

9

869.1

454

.0410

80.56

2906

.7152

68.12

3622

8.50

3085

1.91

Mac

hinery

an

d Elec

trica

l Ins

tallat

ions

have

be

en re

value

d

Upto

30.6.2

002

1194

.5879

50.30

432.7

095

77.58 50.33

519.6

321

.7947

8.93

1070

.68 10

648.2

693

69.68

For t

he year

128.1

710

00.13

54.72

1183

.02 0.56

7.78

0.07

2.71

53.25 2.1

897

.9216

4.47

1347

.4913

09.48

Withd

rawn

0.48

2.36

2.84

10.10

11.23

21.33

24.17

30.90

Upto

30.6.2

003

1322

.7589

49.95

485.0

610

757.7

6

0.56

7.78

50.40 2.7

1

562.7

823

.9756

5.62

1213

.82 11

971.5

810

648.2

6

NET

BLOC

K

As on

30.6.2

002

1327

.8844

51.17

1187

7.49

830.4

818

487.0

2

33.46 3.3

4

316.1

131

.5760

5.33

989.8

172

6.82

2020

3.65

2009

3.54

As on

30.6.2

003

1323

.6043

23.00

1087

5.61

773.7

017

295.9

1

1634

34.25

123.1

148

6.07

3.27

178.4

8

306.3

630

.0751

4.94

1692

.8952

68.12

2425

6.92

2020

3.65

Valua

tion

as pe

rAp

prove

dVa

luer

5350

.3511

107.2

329

069.4

618

14.58

4734

1.62

Writ

tendo

wn Va

lue16

3434

.2512

3.11

486.0

73.2

717

8.48

306.3

630

.0751

4.94

1692

.8952

68.12

5430

2.63

2020

3.65

. Ot

her

asse

ts ar

e sh

own

at W

ritten

Do

wn bo

ok Va

lue.



SCHEDULE - 6INVESTMENTS - LONG TERM at costA. Quoted:In fully paid Equity Shares:a) Sri Chamundeswari Sugars Limited

2,55,432 Shares of Rs.10 eachb) Sri Bhagavathi Textiles Limited

5,000 Shares of Rs.100 eachc) Sakthi Finance Limited

10,40,000 Shares of Rs.10 eachd) ICICI Bank Ltd

441 Shares of Rs.10 eache) NUT Ltd.

675 Shares of Rs. 10 eachf) Kovai Medical Centre and Hospital Ltd.

2,00,000 Shares of Rs.10 eachg) K G Denim Limited

1,00,000 Shares of Rs.10 eachh) IFCI Ltd

100 Shares of Rs.10 eachi) The Industrial Development Bank of India Ltd

71360 Shares of Rs.10 eachj) The South Indian Bank Limited

13,200 Shares of Rs.10 EachAggregate of Quoted Investments

B. Unquoted:1. In Government Securities:

National Savings Certificates2. In fully paid Equity Shares:

a) L'Avenir Telecoms Limited 25,000 Shares of Rs.10 eachb) Sakthi Soft Drinks Limited 30,000 Shares of Rs.10 eachc) Sakthi Beverages Limited 2,27,900 Shares of Rs.10 eachd) The ABT Co-operative Stores Ltd. 1000 Shares of Rs. 10 eache) Sakthi Sugars Co-operative Stores Ltd. 760 Shares of Rs.10 eachf) Arun Fuels Ltd., 2000 Shares of Rs.100 eachg) Angul Central Co-op Bank Ltd. 100 Shares of Rs.100 eachh) Sakthi Auto Component Limited 15528850 Shares of Rs.10 each

(Wholly owned subsidiary)Aggregate of Unquoted Investments

As at30.6.2003

(Rs.

117.88

5.00

282.00

0.24

0.15

20.00

17.00

0.04

57.98

4.22504.51

2.83

2.503.00

22.790.100.082.000.10

4,658.51

4,691.91

As at30.6.2002

in lakhs)

117.88

5.00

282.00

0.24

0.15

20.00

17.00

0.04

57.98

4.22504.51

3.33

2.503.00

22.790.100.082.000.10

4,658.51 .

4,692.41

29


SCHEDULE - 6 (Contd.)Total InvestmentsLess: Provision for Diminution in value of Investments

TOTAL

As at As at30.6.2003 30.6.2002

(Rs. in lakhs)5,196.42 5,196.92

35.89 51.46

5.160.53 5,145.46Note : 1) Market Value of quoted Investments as on 30th June, 2003 is Rs. 148.55 lakhs (Rs. 134.55 lakhs).

2) Government securities of the total face value of Rs. 1.99 lakhs are deposited with Panchayat andPublic Works Department as road contract work deposits and of the value of Rs. 0.84 lakhs aredeposited with State Commercial Tax Department.

SCHEDULE - 7INVENTORIESStores and spares 1,055.70 626.27Standing crop 6.70 8.81STOCK-IN-TRADE:i) Finished goods:

SugarMolasses - Sugar UnitIndustrial AlcoholSoya Products & Sunflower OilBio-EarthFusel Oil ~

ii) Raw materialsMolasses - Distillery UnitRaw SugarSoyabeans & others

iii) Other stocks:News print paperChemicals, Fertilisers & OthersBagasse

iv) Stock-in-processSugarMolasses

TOTALSCHEDULE - 8SUNDRY DEBTORSUnsecured - considered good:i) Debts outstanding for a period exceeding six monthsii) Other debts

TOTAL

2,035.10523.65144.1871.67

1.011.19

2,776.80

155.392,170.90

185.212,511.50

0.3335.4912.0047.82

29.975.02

34.996,433.51

710.211,774.812,485.02

6,946.82233.96334.23134.05

2.450.07

7.651.58

139.78

316.50456.28

1.2639.0118.7559.02

25.045.08

30.128,832.08

405.761,310.651,716.41

30



SCHEDULE - 9CASH AND BANK BALANCESi) Cash on handii) (a) In Current accounts with Scheduled Banks

(b) Current accounts with Other banksiii) Deposits with Scheduled Banks

TOTALSCHEDULE - 10OTHER CURRENT ASSETSOutstanding income and interest receivableInterest Savings on Export SalesValue of Advance Licence/DFRCStock of stamps and hundi papers

TOTALSCHEDULE - 11LOANS AND ADVANCES :Unsecured; (Considered good)Advance to Subsidiary CompanyAdvance Recoverable in cash or in kind/value to be receivedIncome-tax paymentsPrepaid expensesDeposit with Central Excise, Electricity Department, etc.

TOTALSCHEDULE - 12CURRENT LIABILITIES AND PROVISIONSA. Current Liabilities:Liabilities for purchases, Expenses & OthersUnclaimed dividends / Preference SharesInterest accrued but not due

.

B. Provisions:Proposed Dividend on Preference Shares

TOTALSCHEDULE - 13MISCELLANEOUS EXPENDITURE(To the extent not written off or not adjusted)Deferred Revenue ExpenditurePre-operative expensesDebenture Issue ExpensesShare issue expensesSoyabean Development Expenses

TOTAL

As at30.6.2003

(Rs.

13.77272.50

3,62457.31747.20

231.552,787.592,056.32

0.885,076.34

1,145.7513,541.56

150.47315.22

1,431.6416,584.64

10,100.3112.83

418.2810,531.42

10,531.42

461.1755.6814.637.74

95.74634.96

^

As at30.6.2002

in lakhs)

15.42227.36

1.98544.02788.78

97.942,764.205,598.84

1.068,462.04

2,012.6211,754.62

333.00456.33881.85

15,438.42

8,078.0516.37

501.598,596.01

152.008,748.01

580.97119.4522.1216.30

112.32851.16

31


SCHEDULE - 14SALES: *SugarIndustrial AlcoholPowerETP Contract Receipts & Technical Service chargesSoya Products & Sunflower OilFertilisers & ChemicalsSeedsRBD PalmoleinBio EarthMagazinesOthersAdd : OWN CONSUMPTION

Industrial AlcoholMolassesSoya ProductsOther By Products

TOTAL* Inclusive of Excise duty.

SCHEDULE - 15OTHER INCOME:

Rent ReceiptsProfit on sale of Fixed AssetsInterest Savings on Export Sales (Net)Profit on sale of used materialsProfit on Road Contract WorksPublic/Debenture Issue Expenses Written BackValue of Sugar Mill Rollers AccountedProvision for Excise Duty Reversed (on accountof Export out of Opening Stock)

Miscellaneous IncomeForeign Currency FluctuationSundry balances written off

TOTAL

CurrentYear ended

30.6.2003

(Rs. in

23707.263943.54

62.830.76

3441.60168.6433.24

49.947.05

27.56

0.30736.15

0.0642.42

32,221.35

28.421.34

23.3936.710.15

176.14332.50161.52

57.34

0.48

817.99

PreviousYear ended

30.6.2002

lakhs)

36458.743805.78

7.010.26

3174.40308.98

18.934.06

120.828.11

14.23

0.311095.12

0.065.66

45,022.47

18.239.50

1,585.7130.043.57

54.337.932.38

1,711.69

32



SCHEDULE - 16STOCK ADJUSTMENT:(A) OPENING STOCK:

SugarMolassesIndustrial AlcoholSoya ProductsBagasseBio EarthFusel OilStock-in-process

(B) CLOSING STOCK:SugarMolassesIndustrial AlcoholSoya Products & Sunflower OilBagasseBio EarthFusel OilStock-in-process

(B) - (A):SCHEDULE - 17COST OF GOODS CONSUMED/SOLD:(A) OPENING STOCK:

MolassesFertilisers & ChemicalsNewsprint paperSoyabean seeds & others

(B) ADD : PURCHASES:SugarcaneMolassesFertilisers & ChemicalsNewsprint paperSoyabean seeds & others

CurrentYear ended

30.6.2003

(Rs.

6,946.82233.96334.23134.0518.752.450.07

30.12- 7,700.45

1,381.45517.86144.1871.6712.001.011.19

34.992,164.35

(5,536.10)

139.7939.00

1.26316.51496.56

12,472.441,404.62

159.9211.11

2,385.2516,433.34

PreviousYear ended

30.6.2002

in lakhs)

18,398.21179.92180.1983.820.152.680.60

323.4119,168.98

6,946.82233.96334.23134,05

18.752.45 -0.07

30.127,700.45

(11,468.53)

183.1526.87

1.89148.67360.58

17,086.201,653.93 .

313.3911.15

2,566.8621,631.53

33


SCHEDULE - 17 (Contd.)(C) LESS : CLOSING STOCK:

MolassesFertilisers & ChemicalsNewsprint paperSoyabean Seeds

(D) CONSUMPTION: (A+B-C)

SCHEDULE - 18MANUFACTURING EXPENSES:Consumption of Stores & Spares and Packing materialsPower and FuelWater chargesBagasse for Co-GenerationPrinting and Publication chargesRentLease Rental & Hire ChargesRates and TaxesInsuranceRepairs and Maintenance:

BuildingMachinery & ElectricalVehiclesOthers

Effluent disposal expensesState Administrative Service FeesBank ChargesSubsidy and Crop development expenses'"Tools and implements written off

TOTAL

SCHEDULE - 19SALARIES, WAGES AND OTHEREMPLOYEE BENEFITS:Salaries and Wages, Bonus, etc.,Contribution to P.p. and other fundsWorkmen and Staff Welfare expenses

TOTAL

CurrentYear ended

30.6.2003

(Rs.

155.3935.49

0.33185.21376.42

16,553.48

776.35538.4469.5537.2516.2356.7984.5346.5085.11

71.03357.18147.0750.70

200.12134.79153.24159.22

0.46

2,984.56

1,509.64146.64210.68

1,866.96

PreviousYear ended

30.6.2002

in lakhs)

139.7939.00

1.26316.51496.56

21,495.55

1,125.62561.32

8.002,95

15.9338.54

217.0242.59

106.29

101.94704.51154.4556.81

186.62133.27170.75220.22

0.18

3,847.01

1,759.93169.82248.73

2,178.48

34



SCHEDULE - 20INTEREST CHARGES:Term LoansDebenturesWorking capital loansOthers

TOTALSCHEDULE - 21SELLING EXPENSES:Export Pass Fees on SpiritAdditional Sales TaxSelling and Distribution expensesCommission and brokerage:

On sale of magazinesOthers

TOTALSCHEDULE - 22ANY OTHER EXPENSES:Travelling expensesFreight and TransportAdministrative and other expensesPrinting, Postage, Telephone & TelexDonationsEffluent on soil/crop - R & D expensesData processing chargesLegal and Professional chargesForeign Exchange FlutuationManagerial remunerationDirectors' Sitting FeesGuarantee CommissionAuditors RemunerationLoss on sale of Fixed AssetsLoss on sale of used materialsDebenture issue expensesDeferred Revenue Expenditure written offSoyabean Development ExpensesIrrecoverable advances written offPre-production expenses written offPreliminary Expenses written off

TOTAL

CurrentYear ended

30.6.2003

(Rs.

2,555.33618.87

1,071.54725.30

4,971.04

115.19776.86

0.825.54

898.41

199.35376.60251.16106.3923.63,

0.9313.8025.066.73

10.651.57

12.455.986.426.30

182.4816.580.06

63.76'

1,309.90

PreviousYear ended

30.6.2002

in lakhs)

1,807.61730.97

2,802.12989.52

6,330.22

1.44123.03

1,306.72

1.3439.89

1,472.42

191.25388.72276.04115.9229.9316.5213.9718.12

19.891.52

17.37.5.278.670.57

10.21165.3116.58 3.73

64.008.56

' 1,372.15

35


ACCOUNTING POLICIES

1. All ascertained income and expenses are accounted on accrual basis. Contracts in Pollution Control Divisionand other contract works are accounted based on the level of completion.

2. Depreciation has been provided on all assets under Straight Line Method at the rates prescribed in ScheduleXIV to the Companies Act, 1956.

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