Sugar Renuka

8/9/2019 Sugar Renuka

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Renuka Sugars PVT LTD.

SummaryThe Shree Renuka Sugars Limited (SRSL) is an integrated manufacturingcompany. It produces sugar, bio fuels and other related renewable by-

products. The company is one of the largest sugar and ethanol producersin coastal India. It has its production facilities located in the states ofKarnataka and West Bengal as well as leased and operated facilities

across Maharashtra and Karnataka. The total sugar refining

capacity of the company equals to 4,000 tons per day. The company

is headquartered at Mumbai in Maharashtra, India.Global MarketsDirect's Shree Renuka Sugars Ltd. - Financial Analysis Review is an in-depth business, financial analysis of Shree Renuka Sugars Ltd. The report

provides a comprehensive insight into the company, including businessstructure and operations,executive biographies and key competitors. Thehallmark of the report is the detailed financial ratios of the company

Scope:

- Provides key company information for business intelligence needsThe report contains critical company information business structure

and operations, the company history, major products and services, keycompetitors, key employees and executive biographies, differentlocations and important subsidiaries.

- The report provides detailed financial ratios for the past five years aswell as interim ratios for the last four quarters.

- Financial ratios include profitability, margins and returns, liquidity andleverage, financial position and efficiency ratios.


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Directors Report:

To the Shareholders of

Shree Renuka Sugars Limited

The Directors are pleased to present the 13th Annual Report of the

Company together with the audited financial statements for the year

ended September 30, 2008.

Financial results (Rs. in million)

Particulars 2007-08 2006-07

Revenues 18,246 7,486Profit before financial 2,187 1,209

expenses and depreciation

Interest 685 180

Depreciation and amortisation 365 249

Profit before provision for tax 1,137 780

Provision for taxation

- Current 133 91

- Deferred tax 259 145

Net Profit 745 544

Add: Excess provision for 182 -

depreciation written back

Profit brought forward 327 382

Profit available for appropriation 1,255 926

Transfer to general reserves 500 500

Dividend on preference shares - 36

Dividend on equity shares 60 50

Dividend tax 10 14Balance carried over 685 327


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Operational highlights:

The total turnover of the Company, net of excise duty including otherincome for the year ended September 30, 2008 was Rs. 18,246 million

compared with Rs. 7,486 million for the previous year ended September

30, 2007, which is an increase by 144%. The Company has reported anEBITDA of Rs. 2,187 million compared with Rs. 1,209 million for the

previous year ended September 30, 2007, which is an increase by 81% anda net profit of Rs. 927 million (includes depreciation written back)

for the year under review, compared with Rs. 544 million in theprevious year, an increase of 70% over the previous year.

Dividend:

Your Directors recommend a dividend of 20% on equity share capital of

the Company (i.e. Re. 0.20 per equity share of Re. 1 each) for the yearended September 30, 2008. The payment of di vidend will be subject to

the approval of the shareholders at the ensuing Annual General Meeting.

Transfer to reserves:

The Company proposes to transfer Rs. 500 million to the general reserveout of the amount available for appropriation and an amount of Rs. 685

million is proposed to be retained in the profit and loss account.

Sub-division of shares:

The face value of the equity shares of the Company has been sub -dividedw.e.f. April 21, 2008 from Rs.10 each to Re.1 each.

Deposits:

The Company has not accepted any public deposits and, as such, noamount of principal or interest on public deposits was outstanding on

date of the Balance Sheet.

Further issue of capital and warrants:

The Company has in accordance with the statutory provisions, including

SEBI (Disclosure and InvestorProtection) Guidelines, 2000 and with theapproval of the members in the Extraordinary General Meeting held onAugust 27, 2008, issued and allotted 18,000,000 warrants convertible


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into equity shares of the Company of Re. 1 each at a price of Rs.

114.37 including premium of Rs. 113.37, determined in accordance withthe SEBI Guidelines, to the promoters on a preferential basis. This wasdone with the objective to augment long-term resources of the Company

for meeting fund requirements of ongoing capital expenditure, new

acquisitions, improve manufacturing capacity and for general corporatepurposes.

Strategic acquisitions and developments:

The Company has entered into an agreement with the promoters ofRatnaprabha Sugars Ltd., for purchase of 100% equity shares of the

Company, acquired in a bid granted by the Government of Maharashtra,

Godavari Dudhana SSK, having a sugar- manufacturing unit in centralMaharashtra with 1,250 tons of sugarcane crushing capacity and adistillery with a capacity of 30 kilo-litres per day. The plant has

excellent sugarcane potential and over 250 acres of land, whi ch can bedeveloped for future expansions.

As part of its focus on the fuel ethanol market, the Company has

acquired Godavari Bio fuel Pvt. Ltd., which has 4.8 acres of land

adjacent to the Companys 300- KLPD ethanol plant in Khopoli,Maharashtra. The Company has a license to produce ethanol from alcohol.The land would be used to build ethanol storage tanks as it is

strategically located near the Mumbai port to cater to SRSLs clients

and /or for exports.

The Company has acquired a majority shareholding in Gokak Sugars Ltd.in October 2008, having a 2,500-TCD sugar- manufacturing unit and a14-MW co-generation power plant at Kolavi village, Taluka Gokak,

Belgaum in Karnataka.

The Company has taken Raibag SSK Niyamit, Raibag, in Belgaum district,Karnataka and Balaghat SSK Limited, Balaghat, in Latur district,Maharashtra on lease basis.

MoU with Hindustan Petroleum Corporation Limited (HPCL):


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The Company has signed a Memorandum of Understanding for formation of a

joint venture Company with Hindustan Petroleum Corporation Limited forthe purpose of setting up an integrated sugar and ethanol plant in thestate of Maharashtra.

Subsidiary companies and consolidated financial statements:

The Company had two subsidiaries in the beginning of the year.

During the year, the following companies have become subsidiaries ofthe Company viz., KBK-Chem Engineering Private Limited, Shree Renuka

Energy Ltd., Shree Renuka Agri Ventures Ltd., Godavari Biofuel Pvt.Ltd., Ratnaprabha Sugars Ltd., Shree Renuka Southern Africa Holdings

FZC and Renuka Energy Resource Holdings FZE.

In accordance with the Accounting Standards AS -21 on consolidatedfinancial statements, your Directors have pleasure in attaching the

consolidated financial statements, which form part of the Annual Report

and Accounts. These consolidated financial reports provide financial

information about your Company and its subsidiaries as a single entity.

The Company has obtained approval from the Ministry of Company Affairsunder Section 212(8) of the Companies Act, 1956, for exempting the

Company from attaching its Annual Report, the copies of the BalanceSheets, Profit and Loss Accounts, Directors Reports and Auditors

Reports and other documents required to be attached under Section212(1) of the act of all its subsidiary companies.

Accordingly, the said documents are not attached to the financial

statements of the Company. A gist of the financial performance of thesubsidiaries is given in this Annual Report. The annual accounts of the

subsidiary companies are open for inspection by any Member, and theCompany will make available these documents/details upon request by any

member of the Company/Subsidiaries of the Company interested inobtaining the same.


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Employees StockOption Scheme:

The grant of stock options to employees is a mechanism to align theinterest of employees with those of the Company, to provide them with

an opportunity to share the growth of the Company as also to foster

long-term commitment. Towards achieving this goal, approval of themembers was obtained in the Annual General Meeting held on December 28,

2006 for introduction of the Stock Option Scheme.

The Employees Stock Compensation Committee, constituted in accordancewith the SEBI Employees Stock Option Scheme and Employees Stock

Purchase Scheme Guidelines, 1999, administers and monitors the scheme.

Employee wise details of options granted to:

i) Senior Managerial Personnel 1,372,000*

ii) Any other employee who receives a grant in any one year of option

amounting to 5% or more of option granted during that yean:G.K. Sood -150,000*

(*after adjusting for split)

iii) Any other employees who have been granted options equal to or

exceeding 1% of the issued capital of the Company at the time of grant:

NIL

Auditors and Auditors Report:

M/s Ashok KumarPrabhashankar and Co., Chartered Accountants,

Bangalore, Auditors of the Company, hold office until the conclusion ofthe ensuing Annual General Meeting and are recommended forRe-appointment. Certificate from the Auditors has been obtained to the

effect that their re-appointment, if made, would be within the limitsspecified under Section 224 (IB) of the Companies Act, 1956.

Directors Responsibility Statement:

The Board of Directors in terms of Section 217 (2AA) states that:

a) in the preparation of the annual accounts the applicable accounting


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standards have been followed along with proper explanation relating to

material departures from the same;

b) the Directors have selected such accounting policies and applied

them consistently and made judgment and estimates that are reasonable

and prudent, so as to give true and fair view of the state of affairsof the Company as at September 30, 2008 and of the Profit and Loss of

the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the

provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern

basis.

Conservation of energy, technology absorption, foreign exchange

earnings and outgoInformation as per the Companies (Disclosures ofParticulars in the Report of the Board of Directors) Rules, 1988relating to conservation of energy, technology absorption, foreignexchange earnings and outgo form a part of the report and is annexed

hereto.

Corporate Governance:

During the year under review, your Company has taken adequate steps toensure that all mandatory provisions of Corporate Governance as

stipulated under Clause 49 of the Listing Agreement have been complied

with. A separate report on governance along with the AuditorsCertificate on its compliance, forms part of the Report and is annexed

hereto.

Particulars of employees:

Information as required under Section 217(2A) of the Act, read with theCompanies (Particulars of Employees) Rules 1975, as amended, are given

in an Annexure forming part of this report.

Human Resource:


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Industrial relations remained cordial throughout the year. As in the

earlier years, the Company conducted several training programmes. YourDirectors place on record their appreciation for the significantcontribution made by all the employees at all levels; their competence,

perseverance, and hard work that has enabled the Company to cross new

milestones on a continual basis.

Management Discussion and Analysis Report (MDA):

The Management Discussion and Analysis Report on the business and

operations of the Company is attached to this report.

Acknowledgements:

Your Directors wish to place on record their sincere appreciation for

the assistance and co-operation received from the financialinstitutions, banks, government authorities, customers, vendors andcane producers and finally to all shareholders, for their trust and

confidence reposed on the Company. The Directors also express theirdeep sense of appreciation for the committed services of the

executives, staff and workers of the Company.

Corporate Governance:

As an important step towards Corporate Governance and a part of compliance

under Clause 49 of the SEBI Guidelines for the listed companies, SRSL hasconstituted its Board of Directors by inducting professionals, independent persons

of stature in the sugar industry and nominees of strategic lenders. In order to have

an efficient and effective control over the operations of the Compan y in line withthe Corporate Governance the following committees have been formed:

Audit Committee

Comprises three Independent Directors (Mr. Sanjay Asher, Chairman, Mr. RobertTaylor and Mr. Hrishikesh Parandekar). The statutory auditors, internal auditors

and Head of Finance will be attendees. The broad terms of reference of the Audit


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Committee are as follows:

1. Review of the Company's financial reporting process and its financialstatements

2. Review of accounting and financial policies and practices

3. Review of the internal control and internal audit systems

4. Review of risk management policies and practices

Risk Management Committee

Comprises the following Directors and officers of the Company, who monitor

price fluctuations and review financial and risk management policies of theCompany

Mr. Narendra M. Murkumbi, Managing Director

Mr. Nandan V. Yalgi, Director (Commercial)Mr. Robert Taylor, Independent DirectorMr. K. K. Kumbhat, CFO

Mr. Abhay Deshpande, VP (Biofuels and Sales)Mr. Rajshekhar Charantimath, DGM (Finance)

Mr. Nitin Bhandari, Senior Manager (Futures)

MANAGEMENT AND DISCUSSION ANALYSIS -

QUARTERENDED DECEMBER 31, 2009:Revenues Standalone

Our total turnover including total revenues net of excise duty andincluding other income, for the quarter ending December 31,

2009 (Q1 2010) was Rs. 12,797 million as compared to Rs. 3,394 millionin the quarter ending December 31, 2008 (Q1 2009).

Our total turnover increased mainly due to increase in the segment salesof Sugar to Rs. 9,257 million in Q1 2010 from Rs. 2,682 million in Q1

2009 and an increase in segment sale of power generation to Rs. 951million from Rs. 898 million.


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The segment sales of Manufactured Sugar inc reased by 126% from

132,237 MT for Q1 2009 to 299,336 MT of sugar sold in Q1 2010with an average net realization of Rs. 28,886/ -per MT as compared to Rs.16,364/- per MT for the corresponding quarter in the last

year which is an increase of 77%.

Revenue from cogeneration plant increased to Rs. 951 million for Q1

2010 as compared to Rs 898 million for Q1 2009 which is an increase of6%. The net realization of power decreased from Rs. 7.4 for Q1 2009 to

about Rs. 5.0 for Q1 2010 per unit export of power; however the totalpower exported to the grid increased from 72 million units for Q1 2009 to

80 million units for the Q1 2010.Sales from Ethanol division in Q1 2010 were flat at Rs 406 million ascompared to Rs 412 million for Q1 2009 on account of lower sales of

13,780 KL as compared to 16,845 KL for the same period last year.

However, the average realization during the quarter was higher at Rs.29,482 per KL as compared to Rs. 24,500 per KL in the correspondingquarter last year which is an increase of 20%.

Performance of Shree Renuka Sugars:

High sugar realisation leads to astronomical growth in

bottom-line:

Shree Renuka Sugars has recorded exemplary performance as the consolidatedrevenue of the company for the quarter ended December 2009 surged up 257% Y -o-Y to Rs 1428.701 crore. The revenue from sugar division (standalone) was up245% to Rs 925.70 crore on the back of 126% increase in volume (299,336 tonneagainst 132,237 tonne in Q1 FY09) and higher average realisation (77% up Y -o-Yto Rs 28,886/-per tonne). The OPM also surged by 1010 bps to 25.3% while the

operating profit increased almost 5 times to Rs 361.10 crore from Rs 60.80 crorein Q1 FY10. With 846% jump in tax expenses to Rs 66.20 crore while the

effective tax rate declined from 35.9% to 20.2%, the net profit ended at Rs 260.90crore against Rs 11 crore in corresponding previous quarter.

The net realization of power decreased from Rs 7.4 to Rs 5.0 per unit on Y -o-Ywhile total power exported to the grid increased from 72 million units to 80million units. Distillery (ethanol) volume dipped to 13,780 KL as compared to

16,845 KL in Q1 FY09 while the average realization increased to Rs 29,482 per

KL as compared to Rs 24,500 per KL on Y-o-Y.

The company produced total 315,261 tonne of sugar (including processed raw


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sugar) against 249,148 tonne in Q1 FY09. As on 31st

December 2009, the

company had closing stock of 324,395 tonne of white sugar including 111,787tone of imported white sugar and also had 329,006 tonne of raw sugar. As of31st December 2009, inventory of Ethanol and molasses was 23,422 KL and

100,063 tonne respectively.

Consolidated performance for the quarter ended December

2009:

The company has recorded exemplary performance as the consolidated revenue of

the company for the quarter ended December 2009 surged up 257% Y -o-Y to Rs1428.701 crore on the back of sky high escalation in sugar prices during the

quarter as well as higher sugar volume. The segment sales of Manufactured Sugarincreased by 126% Y-o-Y to 299,336 tonne for Q1 FY10 (132,237 tonne in Q1

FY09). The average net realisation increased 77% Y-o-Y to Rs 28,886/-per tonne(Rs 16,364/- per tonne in Q1 FY09).

The OPM also surged by 1010 bps to 25.3% while the operating profit increased

almost 5 times to Rs 361.10 crore from Rs 60.80 crore in Q1 FY10. With 846%ump in tax expenses to Rs 66.20 crore while the effective tax rate declined from

35.9% to 20.2%, the net profit ended at Rs 260.90 crore against Rs 11 crore in

corresponding previous quarter.

Sugar division:

The segment sales of Manufactured Sugar increased by 126% Y -o-Y to 299,336tonne for Q1 FY10 (132,237 tonne in Q1 FY09). The average net realisationincreased 77% Y-o-Y to Rs 28,886/-per tonne (Rs 16,364/- per tonne in Q1

FY09).

The revenue from sugar division for the quarter surged up 245% Y -o-Y to Rs

925.70 crore contributing 68% of the company's total revenue while at PBIT levelthe company witnessed turnaround with profit of Rs 187.80 crore against Rs 4

crore loss in corresponding previous quarter. The PBIT margin stood at 20.3%.

Trading division:

The revenue from this division for the quarter has significantly improved from Rs


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26.70 crore to Rs 301.60 crore on the back of higher revenue from sugar and

ethanol trading with PBIT also significantly improving to Rs 59.70 crore from Rs1.60 crore in Q1 FY09. The segmental PBIT margin also improved from 6% to19.8%.

KeyOperational Parameters Q1 FY10 Q1 FY09(A) Sugar Plant

Sugarcane Crushed (Tonne) 1,629,590 1,994,580

Raw SugarProcessed (Tonne) 154,884 37,818

Recovery (weighted average) 10.20% 10.64%Sugar Produced

From Cane (Tonne) 166,290 212,145

From Raw Sugar (Tonne) 148,971 37,003

Total Sugar produced (Tonne) 315,261 249,148

Promoters Holding:

As of 31st

December 2009, promoters hold 34.46% (same at the end of sequential

quarter), foreign investors hold 31.42% (31.92% at end of sequential quarter),

MFs, Banks and other institutions hold 15.19% (15.91% at end of sequentialquarter), and others hold 18.94% (17.72% at end of sequential quarter). The

promoters have not pledged any shares as on 30th

December 2009.

Auditors Report

To

The Members ofShree Renuka Sugars Limted,

We have audited the Balance Sheet of SHREE RENUKA SUGARS LIMITED as at

September 30, 2008, the Profit and Loss Account and Cash Flow Statementfor the year ended as on that date both annexed thereto. Thesefinancial statements are the responsibility of the Companys

management. Our responsibility is to express an opinion on these


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financial statements based on our audit.

1. We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the

financial statements are free of material mis-statement. An auditincludes examining on a test basis, evidence supporting the amounts and

disclosures in the financial statements.

2.As required by The Companies (Auditors Report) Order 2003, issuedby the Central Government of India in terms of sub-section (4A) of

section 227 of the Companies Act, 1956, we enclose in the Annexurehereto a statement on the matters specified in paragraphs 4 and 5 of

the said Order.

3.Further to our comments in the Annexure referred to in paragraph 2above, we report that:

a) We have obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purpose of our

audit;

b) In our opinion, proper books of account as required by law have beenkept by the Company, so far as it appears from our examination of those

books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash

Flow Statement dealt with by this report comply with the mandatoryAccounting Standards referred in sub-section (3C) of section 211 of the

Companies Act, 1956;

e) In our opinion, and based on information and explanations given tous, none of the directors are disqualified as on September 30, 2008from being appointed as directors in terms of clause (g) of sub -

section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and accor ding to

the explanations given to us, the said accounts read together with the


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Significant Accounting Policies and other notes thereon give the

information required by the Companies Act, 1956 in the manner sorequired, and present a true and fair view in conformity with theaccounting principles generally accepted in India:

(i) in so far as ft relates to the Balance Sheet of the state ofaffairs of the Company as at September 30, 2008.

(ii) in so far as it relates to the Profit and Loss Account of the

Profit of the Company for the year ended on that date; and

(iii) in so far as it relates to the Cash Flow Statement, of the cashflows of the Company for the year ended on that date.

Annexure to Auditors Report

Referred to in Paragraph 2 of our report of even date

1. a. The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed

assets on the basis of available information.

b. As explained to us, all fixed assets have been physically verified

by the management during the year in a phased periodical manner, whichin our opinion is reasonable, having regard to the size of the Company

and nature of its assets. No material discrepancies were n oticed onsuch physical verification.

c. In our opinion, the Company has not disposed of substantial part offixed assets during the year and the going concern status of the

Company is not affected.

2. a. As explained to us, inventories have been physically verified

by the management at regular intervals.

b. In our opinion and according to the information and explanationsgiven to us, the procedures of physical verification of inventories

followed by the management is reasonable and is ad equate in relation tothe size of the Company and nature of its business .

c. The Company has maintained proper records of inventories. Asexplained to us, there were no material discrepancies noticed onphysical verification of inventory as compared to the book records.


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3. In respect of the loans, secured or unsecured granted or taken bythe Company to / from companies, firms or other parties covered in theRegister maintained under section 301 of the compa nies Act 1956 :

a. The Company has taken loan from a subsidiary Company. In respect ofthe said loan, the maximum amount outstanding at any time during the

year was Rs. 1,560.00 million and the year end balance is Rs. 1,334.00million.

b. In our opinion and according to the information and explanationsgiven to us, the rate of interest and other terms and conditions, arenot prima facie prejudicial to the interest of the Company.

c. The principal amount is repayable on demand and there is norepayment schedule. The Company is regular in payment of interest.

d. In respect of the said loan, the same is repayable on demand andtherefore the question of overdue amount does not arise. In respect of

interest there is no over due amount.

e. The Company has not given any loans during the year secured orunsecured to companies, firms or other parties covered in the Register

maintained under section 301 of the Companies Act 1956.

4. in our opinion and according to the information and explanationsgiven to us, there is an adequate internal control procedure

commensurate with the size of the Company and nature of its businessfor the purchase of inventory, fixed assets and also for the sale ofgoods and services. During the course of our audit, we have not

observed any continuing failure to correct major weaknesses in internalcontrol.

5. a. In our opinion and according to the information and

explanations given to us, the transactions made in pursuance ofcontracts or arrangements, that needed to be entered in the registermaintained under section 301 of the Companies Act, 1956 have been so

entered. b. In our opinion and according to the information andexplanation given to us where such transaction is in excess of Rs. 5

lacs, the transaction has been made at prices which is prima faciereasonable having regard to the prevailing market prices at therelevant time.


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6. According to the information and explanations given to us, theCompany has not accepted any deposits from the public within themeaning of provisions of Section 58A and 58AA of the Companies Act 1956

and the rules framed thereunder. Hence clause (vi) of the order is not

applicable.

7. in our opinion, the Company has an internal audit systemcommensurate with the size and nature of its business.

8. The Central Government has prescribed maintenance of cost recordsunder Section 209(1) (d) of the Companies Act 1956 for some products ofthe Company. We have broadly reviewed these records of the Company and

we are of the opinion that prima facie the prescribed accounts and

records have been made and maintained. However, we have not carried outa detailed examination of such records.

9. a. According to the records of the Company and as per theinformation and explanations given to us, the Company does not have any

undisputed statutory dues including Provident Fund, Income -tax, Sales

tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and anyother statutory dues which are outstanding for a period in excess ofsix months as on September 30, 2008. The Company is not having ESI

Scheme and Investor Education and Protection Fund.

b. According to the information and explanations given to us and as perthe records examined by us, there were no disputed amounts due in

respect of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Dutyand Cess as on September 30, 2008

10. The Company has no accumulated losses and has not incurred anycash losses during the financial year covered by our audit or in the

immediately preceding financial year.

11. Based on our audit procedures and according to the information andexplanations given to us, we are of the opinion that the Company hasnot defaulted in repayment of dues to financial institutions or banks.

12. In our opinion and according to the explanations given to us and

based on the information available, no loans and advances have beengranted by the Company on the basis of security by way of pledge ofshares, debentures and other securities.


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13. In our opinion, the Company is not a chit fund or a nidhi/mutualbenefit fund/society. Therefore, the provisions of c lause 4(xiii) ofthe Companies (Auditors Report) Order 2003, are not applicable to the

Company.

14. The Company does not deal or trade in shares, securities,

debentures and other investments. Hence provisions of clause 4(xiv) ofthe Companies (Auditors Report) Order 2003, are not applicable to the

Company.

15. The Company has given guarantees for loans taken by others frombanks or financial institutions. According to the information andexplanations given to us, we are of the opinion that the terms and

conditions thereof are not prima facie prejudicial to the interests of

the Company.

16. The term loans borrowed during the year have been utilised for the

purposes for which they were raised.

17. According to the information and explanation given to us and on an

overall examination of the Balance Sheet of the Company, we are of theopinion that there are no funds raised on short-term basis that havebeen used for long-term investment.

18. a) The Company has made preferential allotment of shares toparties and companies covered in the register maintained under section301 of the Companies Act, 1956.

b) As per the information and explanations given to us the price atwhich such preferential allotment of shares made is not prejudicial to

the interest of the Company.

19. The Company has not issued any debentures.

20. The Company has not raised any money by way of public issuesduring the year.

21. In our opinion and according to the information and explanationsgiven to us, no fraud on or by the Company has been noticed or reported

during the year that causes the financial statements to be materiallymisstated.

Profit loss account:


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Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05 Sep ' 04

Income

Operating income 1,757.75 798.06 857.21 666.51 242.72

Expenses

Material consumed 1,303.97 515.06 604.84 516.10 167.07

Manufacturing expenses 72.04 98.07 75.80 46.77 25.02

Personnel expenses 37.35 25.37 13.77 9.19 3.52

Selling expenses 72.28 22.07 43.18 14.88 7.82

Administrative expenses 38.00 21.37 13.49 9.32 6.89

Expenses capitalised - - - - -

Cost of sales 1,523.64 681.94 751.08 596.26 210.32

Operating profit 234.10 116.11 106.13 70.25 32.40

Other recurring income 0.71 11.49 5.01 2.30 1.38

Adjusted PBDIT 234.81 127.60 111.14 72.55 33.78

Financial expenses 84.06 24.64 26.58 15.36 11.33

Depreciation 36.48 24.92 8.78 8.00 7.08

Other write offs - - 0.06 0.05 0.18

Adjusted PBT 114.27 78.05 75.72 49.14 15.20

Tax charges 39.15 23.56 18.28 8.28 2.90

Adjusted PAT 75.12 54.49 57.43 40.86 12.30

Non recurring items -0.57 -0.06 -1.16 -0.12 -0.03

Other non cash adjustments 18.24 - -0.69 -7.27 -

Reported net profit 92.79 54.43 55.58 33.46 12.27

Earnings before appropriation 125.47 92.65 73.65 34.37 13.78

Equity dividend 5.96 4.96 4.76 4.77 1.36

Preference dividend - 3.55 - 0.01 0.02

Dividend tax 1.01 1.45 0.67 0.67 0.18

Retained earnings 118.51 82.69 68.22 28.91 12.23


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Balance sheet:Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05 Sep ' 04

Sourcesoffunds

Owner's fund

Equity share capital 27.60 24.81 23.81 20.00 14.71

Share application money 23.09 6.26 - - -

Preference share capital - - - - 0.85

Reserves & surplus 589.26 304.68 198.63 43.72 15.71

Loanfunds

Secured loans 827.58 621.09 354.44 83.87 78.52

Unsecured loans 159.76 25.91 16.69 2.39 11.88

Total 1,627.29 982.74 593.57 149.98 121.67

Usesoffunds

Fixed assets

Gross block 778.87 631.37 162.96 140.32 122.33

Less : revaluation reserve - - - - -

Less : accumulated depreciation 87.72 69.06 43.60 34.82 26.13

Net block 691.16 562.30 119.35 105.50 96.20

Capital work-in-progress 513.95 207.73 331.29 7.62 -

Investments 150.57 16.76 0.55 0.55 0.01

Netcurrentassets

Current assets, loans & advances 572.04 355.75 266.18 220.65 107.38

Less : current liabilities & provisions 302.04 161.92 131.37 184.41 82.04

Total net current assets 270.00 193.84 134.81 36.24 25.34

Miscellaneous expenses not written 1.61 2.11 7.58 0.07 0.12

Total 1,627.29 982.74 593.57 149.98 121.67

Notes:

Book value of unquoted investments 119.93 16.10 - 0.55 0.01

Market value of quoted investments 27.69 - - - -

Contingent liabilities 44.50 148.50 192.37 18.41 -

Number of equity shares outstanding (Lacs) 2759.63 248.10 238.10 200.00 147.07


20/23

Cash flow:

Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05 Sep ' 04

Profit before tax 113.70 77.99 74.55 49.02 15.17

Net cash flow-operating activity 83.26 53.83 -56.90 72.69 56.

Net cash used in investing activity -584.94 -354.92 -346.10 -24.74 -14.13

Net cash used in fin. activity 484.39 314.60 357.46 -17.44 -13.8

Net inc/dec in cash and equivalent -17.29 13.51 -45.54 30.51 28.4

Cash and equivalent begin of year 30.67 17.17 62.70 32.19 3.78

Cash and equivalent end of year 13.39 30.67 17.17 62.70 32.19

Dividend:

Year Month Dividend (%)

2009 Sep 100

2008 Nov 20

2007 Nov 20

2006 Nov 20

2005 Nov 20


21/23

RATIOS:

Current ratio = Current Assets / Current

liabilities

= 270/

=

Net Profit Ratio = Operating Profit / Net

Sales x 100

= 234.10/ 1523.64 x 100

= 15.36

Return on capital Employed = Profit Before

Interest& Tax / Total capital Employed

= 354.64 / 1627.29

= 0.217

Profit Earning Ratio = Market price per share

/ Earning per share

= / 2.72

=

Earning per share = N.P.A.T Diff. Dividend

/equity share

= 75.12 -


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Dividend Payment = D.P.S / E.P.S x 100

= 0.215/2.7 X 100

= 7.96

Dividend per share(D.P.S) = Total Equity

dividend / No .of shares

= 5.96 / 27.60

= 0.215


23/23

Sugar Renuka

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