ATHANI FARMERS _, AT SUGAR FACTORY LTD., I ANNUAL REPORT; 2004-2005 REGISTERED OFFICE & FACTORY Vishnuanna Nagar, Post: Navalihal - 591 234, Tal: Athani, Dist.: Bejgaum Telephone No.: (08289) 230255, 295006 Fax : (08289) 230255
ATHANI FARMERS SUGAR FACTORY LTD. BOARD OF DIRECTORS Shri. Shrimant Balasaheb Patil Shri. Abdulrazak D. Mulla Shri. Mahaveer D. Danoli Shri. Tammanna N. Patil Shri. Vikramsingh C. Mohite Shri. Jotiram K. Mohite Shri. Prakash M. Patil Shri. Ashok P. Patil Shri. Dadasaheb R. Patil Shri. Bharat Mahadev Patil Shri. Suhas Shivajirao Patil Shri. Nivrutti Yeshwant Jadhav Shri. Prakash Venkatrao Chavan Shri. Shivalingappa R. Jambagi Shri. R. K. Sonawane (upto 02.08.05) Shri. D. G. Sutkar (from 03.08.05) R. A. LATAKE Project Co-ordinator Chairman & Managing IDBI Nominee IDBI Nominee REGISTERED OFFICE & FACTORY: Vishnuanna Nagar, PostNavalihal-591234, Tal: Athani, Dist: Belgaum BRANCH OFFICE: 9' Ramkrishna Shivaji Hsg. Society Ltd, SANGLI-416 416. CONSULTANTS: M/s. Gokhale Gokhale & Associates Chartered Accountants, KOLHAPUR. AUDITORS: M/s.A. D. Shinde&Co. Chartered Accountants, KOLHAPUR. BANKERS Industrial Development Bank of India Ltd., Mumbai Bank of Maharashtra, Sangli, Vasnatdada Shetakari Sahakari Bank Ltd, Sangli Bank of India, Gaon Bhag Branch, Sangli Ratnakar Bank Ltd, Sangli Bank of Baroda, Miraj The Sangli Bank Ltd. Sangli Sangli Urban Co-operative Bank Ltd., Sangli
i NOTICE Notice is hereby given that the Eleventh Annual General Meeting of members of Athani Farmers Sugar Factory Ltd, will be held at the Registered Office at Vishnuanna Nagar, Post : Navalihal - 591 234. Tal : Athani, Dist : Belgaum on Thursday the 29 th September, 2005 at 3.00 p.m. to transact the following business : ORDINARY BUSINESS 1. To receive consider and adopt the audited Balance sheet of the company as on 31st March, 2005 and Profit and Loss Account for the year ended on that date together with the Reports of s and Auditors thereon. 2. To appoint a in place of Mr. Dadasaheb R. Patil who retires by rotation and being eligible, offers himself for reappointment. 3. To appoint a in place of Mr. Suhas S. Patil who retires by rotation and being eligible, offers himself for reappointment. A. To appoint a in place of Mr. Nivrutti Yeshwant Jadhav who retires by rotation and being eligible, offers himself for reappointment. 5. To appoint a in place of Mr. Prakash Venkatrao Chavan who retires by rotation and being eligible, offers himself for reappointment. 6. To appoint a in place of Mr. Shivalingappa R. Jambagi who retires by rotation and being eligible, offers himself for reappointment. 7. To appoint Auditors to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to fix their remuneration By order of the Board of s (Shrimant B. Patil) CHAIRMAN & MANAGING DIRECTOR Athani ^armers Sugar Factory Ltd., Place : Vishnuanna Nagar V\\L^ Date : 27* August, 2005 CnaimUui _. r-a^^cttn v fn.u. n I. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and such proxy need not be a member of the company. 11 th Annual Report
Dear Members, DIRECTORS REPORT Our s have pleasure in submitting their Eleventh Annual Report on the affairs of the company and the audited statements of accounts for the year 01.04.2004 to 31.03.2005. OPERATIONS: The operational results of the company for the year 2004-2005 and earlier year are given below : 1) 2) 3) 4) No of Crushing days - Cane Crushed Sugar Produced Recovery 2004-05 2003-04 117 days 271491 tons. 284360 Quintals. 10.49% 113 days 265215 tons. 277505 Quintals 1047% Although the nature was not in favour of the sugar industry and the sugar cane production was lower due to drought & problems like Lokari Mava, the company has performed better as compared to earlier year. Due to lower sugarcane production, many sugar factories could not even start their crushing operations and many sugar factories have become sick. In spite of such adverse conditions, the company 'managed to achieve crushing of 271491 tons sugarcane. This was possible only because of the faith of the sugarcane growers in the management of the company and the competitive cane price paid by the company. FINANCIAL RESULTS: The financial results of the company for the year 01.04.2004 to 31.03.2005 and earlier year are given below : 1) Income 2) Increase in Stock 3) Less: Operating Exp. 4) Profit before Int. & Dep. 5) Interest 6) Profit before dep. (Cash Profit) 7) Depreciation 8) Profit before tax 9) Profit after tax (Rs. in Lakhs) 2004-05 fyear] 2003-04 [Six Months] 4353 3315 1552 963 4620 3507 1285 771 830 485 455 286 The company has earned net profit of Rs. 209 lakhs after providing for depreciation of Rs. 228 lakhs and provision for income tax Rs. 17.80 lakh. The reduction in production all over India has helped in firming up the selling price of sugar. During the year 2003-04, company obtained average selling price of Rs. 1210 per quintal, whereas, company obtained average selling price of Rs. 1513 during the year 2004-05. As on to-day the ruling price of sugar is about Rs. 1700 per quintal. The fact that company has stock of more than 405343 11 th Annual Report 228 227 209 226 60 60
quintals in its godown's will help the company to fetch substantial sales realizations, and thereby overcome the problems created by reduced availability of sugarcane in current year due to the recent flood. After setting off the earlier year's accumulated loss of Rs. 106.34 lakhs, there is surplus of Rs. 102.90 lakh as on 31.03.2005. However, considering the expansion project in hand, the Board of s do not recommend any dividend for the year under report. FUTURE OUTLOOK : 1] To ensure sufficient supply of sugarcane in the earlier crushing season 2004-05, the company has paid cane price of Rs. 1100/- per M.T. The decision about cane price for the ensuing season 2005-06 will be taken considering the availability of sugarcane & cane prices declared by other sugar factories. 2] During the last year, the company has taken up sugarcane development programme under which the company has arranged finance to most of the farmers in the near by areas. This finance has enabled the farmers to change the production techniques and switch to new & improved varieties of cane seed giving high yield. This programme will certainly give good results to the company in the form of greater availability of sugar cane having high contents of sucrose and that too from shorter distance. This will help the company (i) in achieving higher cane crushing (ii) in getting higher sugar recovery percentage & also (iii) in reducing the transportation cost. 3] The Karnataka Government has completed a dam on Krishna River at Hippargi in June, 2004 and started to arrest and store water. This dam has ensured perennial irrigation facilities for continuous supply of water for agriculture & this will help in bringing more & more land under sugarcane cultivation. 4] The company has completed construction of Muragundi Bandhara on Agrani River. This bandhara has certainly helped the farmers during the last year. The government has sanctioned 3 more bandharas on Agrani River and the company has requested government to entrust the construction work to the company. 5] Considering the positive results of the sugarcane development programme as stated above and construction of dam & bandharas and by paying competitive cane price, we are hopeful of achieving cane crushing of 7 to 8 lakh M.T in the coming season 2005-06. 6] The present capacity of the factory is 2500 TCD, which is found to be insufficient to meet the target mentioned above. Therefore, the company has taken up expansion programme to increase the crushing capacity to 4500 TCD. The expansion work is expected to be completed before commencement of the ensuing season. COMMITMENT TO THE WELL BEING OF SOCIETY & EMPLOYEES : As part of its social responsibility, the company is thinking of starting a primary school in English Medium. This will provide education facilities in English Medium to children of company's staff & also to students from nearby villages. The company also intends to increase its cultural activities which will help in improving the relations among villagers, and bring in homogenity in the society as a whole. DIRECTORS : 11 th Annual Report
ATHANI FARMERS SUGAR FACTORY LTD., VISHNUANNA NAGA* The company is being managed by the Board of s consisting of fifteen directors. The day today affairs of the company are being looked after by Mr. Shrimant Balasaheb Patil, Chairman & Managing under the guidance and superintendence of the Board of s. Mr. D. R. Patil, Mr. S. S. Patil, Mr. N.Y. Jadhav, Mr. P. V. Chavan & Mr. S. R. Jambagi retire by rotation and being eligible have offered themselves for reappointment. STAFF: During the year under report none of the employees of the company was in receipt of remuneration more than the limit prescribed under the companies (Particulars of Employees) Rules, 1975 as amended. DIRECTORS : As per IDBI letter No. CSD53/524/NoM.8 dated: 27.07.2005 Mr. D. G. Sutkar has been appointed in Nominee in places of R. K. Sonawane, Nominee w.e.f. 03.08.2005. The Board expresses its deep gratitude to Mr. R. K. Sonawane for its continued advice, consel & guidance in the functioning of the company. AUDITORS : The retiring auditors M/s. A.D. Shinde & Co. Chartered Accountants, Kolhapur retire at this Annual General Meeting and are eligible for reappointment. Members are requested to take decision and appoint auditors for the current year. FIXED DEPOSITS: There were no unpaid or unclaimed deposits as on 31 st March, 2005 within the meaning of Sec. 58A of the companies Act, 1956. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO : Information pursuant to section 217(1) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of s) Rules 1988. a) Conservation of Energy: Continuous efforts are being made to conserve the energy. b) Technology Absorption : The Company has setup sugar factory of 2500 TCD with plant having latest technology. c) Foreign Exchange Earnings and Outgo : NIL. DIRECTORS RESPONSIBILITY STATEMENT : In terms of section 217(2AA) read with section 292A of the Companies Act, 1956, we the s confirm that : i) In the preparation of annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; ii) The s have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for that period; 11 th Annual Report 4
iii) iv) The s have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; The s have prepared the annual accounts on a going concern basis. AUDIT COMMITTEE: The Board has appointed Audit Committee comprising of three directors viz. Shri. Shrimant Balasaheb Patil, Chairman & Managing, Shri. Abdulrazak D. Mulla & Shri. Mahaveer D. Danoli with effect from 14.07.2001. During the year April, 2004 to March 2005, 2 Meetings were held and all the committee members were present for both meetings ACKNOWLEDGEMENT: The Board of s is thankful to the Government of Karnataka for providing to necessary infrastructure facilities the sugar factory. The Board also places on record its appreciation of the financial support given by Industrial Development Bank of India, Vasantdada Shetkari Sahakari Bank Ltd, Bank of Maharashtra, Bank of Baroda, Bank of India, Ratnakar Bank, Sangli Urban Cooperative Bank Ltd, and The Sangli Bank Ltd;. The Board also appreciates the cooperation & guidance given by Commissioner for Cane -Development & of Sugar Karnataka, Deputy Commissioner of Belgaum, Chief of Sugar, New Delhi, Central & State Excise Authorities, Sales Tax & Income Tax Authorities, Pollution Control Board, HESCOM, KIADB authorities, Joint of Factories & Boiler, Labour Commissioner, Police Department, Tahasildar of Athani, RTO Chikodi, and all other government & semi government offices. The Board is also thankful to the statutory Auditors & Income Tax consultant M/s. A.D. Shinde & Co. & and Internal Auditors & Consultants M/s. Gokhale Gokhale & Associates, Kolhapur and Shri. C. P. Hachibatti, Legal Advisor for the services & guidance provided by them. The Board is also thankful to all the employees of the company & suppliers and harvesting and transport contractors for their continued devoted services and support. By order of the Board of s. Place : Vishnuanna Nagar (Shrimant B. Patil) Date : 27 th August, 2005 Chairman & Managing Athani *arm<«$sugarfactory Ltd. 11 th Annual Report
AUDITORS REPORT To the Members of Athani Farmers Sugar Factory Ltd, Vishnuanna Nagar, 1. We have audited the attached balance sheet of Athani Farmers Sugar Factory Ltd, as at 31 sl March, 2005, the profit and loss account for the year ended on the that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies [Auditor's Report] Order, 2003 issued by the Central Government of India in terms of sub-section [4A] of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that : (vi) (i) (ii) (iii) (iv) (v) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit: In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books. The balance sheet and profit and loss account dealt with by this report are in agreement with the books of account. In our opinion, the balance sheet and profit and loss account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. On the basis of written representations received from the directors, as on 31" March, 2005, we report that none of the directors is disqualified as on 31 st March 2005 from being appointed as a director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon & schedules annexed thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; (a) (b) in the case of the balance sheet, of the state of affairs, of the company as at 31 st March, 2005. in the case of the profit and loss account, of the profit for the year ended on that date. For M/s. A. D. Shinde & Co. Chartered Accountants ' SdA Place : Vishnuanna Nagar 1 R> A ' Shinde l Partner Date : 19 th April, 2005 Membership No. 4348 11 th Annual Report 6
ANNEXURE TO AUDITOR'S REPORT [Referred to in paragraph 3 of our report of even date] (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) (c) Major portion of these fixed assets have been physically verified by the management at reasonable intervals. The Company has a regular programme of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification. According to the information and explanations given to us, the Company has not disposed off any major part of plant and machinery during the year. (ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. (b) (c) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification. (iii) (a) The company had taken loan from s and firms or other covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 12.11 crores and the year-end balance of loans taken from such parties was Rs. 11.78. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. (b) (c) (d) In our opinion, the rate of interest and other terms and conditions on which loans have been taken form/granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest. There is no overdue amount of loans taken from firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. (iv) In our opinion and according to the information and explanations given to us, there are adequate 11 th Annual Report 7