Description
Sugar Industry is the second largest agro-based industry, next only to the textile industry and India is one of the largest producers and consumers of sugar in the world. The Indian Sugar Industry is playing a pivotal role in rural development, supporting over 50 million sugarcane farmers, their dependents and a large mass of agricultural labourers involved in sugarcane cultivation, harvesting, machine manufacturing etc. constituting about 7.5% of the rural population.
PARRYS SUGAR INDUSTRIES LTD.
ANNUAL REPORT 2011 - 2012
PARRYS SUGAR INDUSTRIES LTD.
Registered Office : 3
rd
Floor, 1/2 Kalayanamantapa Road,
Jakkasandra, Koramangala, Bengaluru - 560034
Ph : 080 4900 6666 Fax : 080 4900 6600.
Annual Report 2011-12
1
Contents
Corporate Information ........................................................................................................................................................... 2
Notice ......................................................................................................................................................................................... 3
Directors’ Report ...................................................................................................................................................................... 5
Management Discussion and Analysis ............................................................................................................................... 14
Report on Corporate Governance ...................................................................................................................................... 20
Auditors’ Report ...................................................................................................................................................................... 34
Balance Sheet ........................................................................................................................................................................... 38
Statement of Proft and Loss ................................................................................................................................................. 39
Notes to Accounts ................................................................................................................................................................... 40
Signifcant Accounting Policies and Notes on Accounts ............................................................................................... 50
Cash Flow Statement .............................................................................................................................................................. 62
Consolidated Accounts
Auditors’ Report ...................................................................................................................................................................... 63
Balance Sheet ........................................................................................................................................................................... 64
Statement of Proft and Loss ................................................................................................................................................. 65
Notes to Accounts ................................................................................................................................................................... 66
Signifcant Accounting Policies and Notes on Accounts ............................................................................................... 76
Cash Flow Statement .............................................................................................................................................................. 89
Statement pursuant to general exemption provided under Section 212 (8) of the Companies Act, 1956 ..... 90
Parrys Sugar Industries Limited
2
Corporate Information
Board of Directors S. Sandilya , Chairman
D. Kumaraswamy, Managing Director
K. Balasubramanian
K. Ramadoss
V. Ravichandran
N. Srinivasan
Company Secretary B. M. Rath
Registered Ofce Venus Building, 3rd Floor,
1/2 Kalyanamantapa Road
Jakkasandra, Koramangala
Bengaluru - 560 034
Auditors R.G.N Price & Co.
Bankers State Bank of India
Axis Bank Ltd.
ICICI Bank Ltd.
Investor Contacts
Registrar & Transfer Agents
Company
Karvy Computershare Pvt. Ltd.
Unit: Parrys Sugar Industries Limited
Plot No. 17 to 24, Vittal Rao Nagar
Madhapur, Hyderabad – 500081
Tel.: +91 40 44655000
Fax: +91 40 23420814
E-mail: [email protected]
B.M. Rath
General Manager (Legal) & Company Secretary
Tel: +91 80 49006666
Fax: +91 80 49006600
E-mail: [email protected]
Website: www.parrysugar.in
Annual Report 2011-12
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Notice
Notice is hereby given that the twenty-sixth Annual General Meeting of Parrys Sugar Industries Limited will be
held on Thursday, July 26, 2012 at 10.30 A.M. at Khincha Hall, Bharatiya Vidya Bhavan, Race Course Road,
Bengaluru-560001, to transact the following businesses:
Ordinary Business:
1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2012, the Statement of Proft and Loss for the
period ended as on that date and the reports of the Directors and the Auditors thereon.
2. To appoint a Director in place of Mr. K. Ramadoss, who retires by rotation, and being eligible ofers himself for re-
appointment.
3. To appoint a Director in place of Mr. V. Ravichandran, who retires by rotation, and being eligible ofers himself for re-
appointment.
4. To appoint M/s. R.G.N Price & Co., Chartered Accountants as Auditors of the Company for the period commencing from
the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting and to fx their
remuneration.
To consider and if thought ft, to pass, with or without modifcation(s), the following resolution as an Ordinary Resolution:
“RESOLVED THAT M/s. R.G.N Price & Co., Chartered Accountants, bearing Registration No. 002785 S with the Institute of
Chartered Accountants of India, be and they are hereby appointed as Auditors of the Company to hold ofce from the
conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting on such remuneration
as may be determined by the Board of Directors of the Company”.
By Order of the Board of Directors
Chennai B. M. Rath
April 24, 2012 Company Secretary
Notes:
1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to
appoint a proxy to attend and vote, instead of himself / herself and such proxy need not be a member of
the Company. However, the duly flled in and signed proxy form(s) in order to be valid, shall be lodged
with the Company at its Registered Ofce not less than forty-eight hours before the commencement of
the Meeting.
2. Corporate Members are requested to send a duly certifed copy of the Board Resolution authorizing their representative(s)
to attend and vote on their behalf at the Meeting.
3. The Register of Members and the Share Transfer Books of the Company will remain closed from Wednesday, the 18th July,
2012 to Thursday, the 26th July, 2012, both days inclusive.
4. Members holding shares in electronic form are requested to intimate immediately any change in their address or bank
mandates to their Depository Participants with whom they are maintaining their demat accounts. Members holding
shares in physical form are requested to advise any change in their address immediately to the Company/Registrar and
Transfer Agent M/s Karvy Computershare Pvt. Ltd. (Karvy).
5. Members desiring any information as regards to the Accounts and operations of the Company are requested to send
their queries at least 7 days before the date of the meeting to the Company alongwith their email Id so that the desired
information may be made available at the Meeting or sent to the members after the meeting.
Parrys Sugar Industries Limited
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6. Members who have not yet encashed their dividend warrant(s) for the fnancial year 2004-05, are requested to make
their claims without any delay to Karvy. It may be noted that the unclaimed/unpaid dividend for the fnancial year 2004-
05 declared on August 20, 2005 can be claimed by the Members by August 19, 2012. Members attention is particularly
drawn to the Corporate Governance section of the Annual Report in respect of unclaimed dividend.
7. As per the provisions of Section 109A of the Companies Act, 1956, nomination facility is available to the members in
respect of the equity shares held by them. Nomination forms are available and can be obtained from the RTA.
8. Detailed information regarding the Stock Exchanges where the equity shares of the Company are listed, along with their
address and the stock code given to the Company by the respective Stock Exchanges are indicated in the Corporate
Governance Report, forming part of the Directors’ Report.
9. Securities and Exchange Board of India has mandated the submission of Permanent Account Number (PAN) by every
participant in the securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN
to their Depository Participant with whom they are maintaining their demat accounts. Members holding shares in physical
form can submit their PAN details to the Company/Karvy.
10. Members holding shares in physical form are requested to consider converting their holding to dematerialised form
to eliminate all risks associated with physical shares and for ease in portfolio management. Members can contact the
Company or karvy for assistance in this regard.
11. The profle of the Directors seeking re-appointment is indicated in the Corporate Governance Report.
12. Members are requested to bring their copy of Annual Report together with the notice for the meeting. In order to enable
us to register your attendance at the venue of the Meeting, we request you to please bring your folio number/Client Id /
DP Id.
13. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled
to vote.
14. Members who hold shares in physical form in multiple folios in identical names or joint holding in the same order of
names are requested to send the share certifcates to Karvy for consolidation into a single folio.
15. The Ministry of Corporate Afairs (vide circular Nos. 17/2011 and 18/2011 dated April 21, 2011 and April 29, 2011
respectively), has undertaken a ‘Green Initiative in Corporate Governance’ and allowed companies to share documents
with its shareholders through electronic mode. A recent amendment to the Listing Agreement with the Stock Exchanges
permits companies to send soft copies of the Annual Report to all those shareholders who have registered their email
address to the said purpose. Members are requested to support this Green Initiative by registering/updating their email
addresses for receiving electronic communication.
By Order of the Board of Directors
Chennai B. M. Rath
April 24, 2012 Company Secretary
Annual Report 2011-12
5
Directors’ Report
Your Directors have pleasure in presenting their 26th Annual Report together with the audited fnancial statements for the
Financial Year (9 months) ended 31st March 2012.
The fnancials for the year 2011-2012 are summarized below.
(` in Lakhs)
2011-12
(9 months)
2010-11
(15 months)
Revenue from operations 46739.09 41784.06
Other Income 5.75 10.61
Total Income 46744.84 41794.67
Proft before Interest and Depreciation 5515.20 1035.42
Interest 5178.17 7823.24
Depreciation 2349.96 3665.80
(Loss) before taxation (2012.93) (10453.62)
Provision for tax:
– Current
– Deferred Tax
-
(1375.60)
(123.97)
(862.24)
(Loss) after Tax (637.33) (9467.41)
CHANGE IN FINANCIAL YEAR
The fnancial year 2010-11 of the Company was extended up to 30th June 2011. Consequently the current fnancial year of the
Company is for a period of 9 months ended on 31st March 2012 and hence not comparable with the results of the previous
fnancial year 2010-2011 which was for a 15 months period.
DIVIDEND
In view of the losses incurred, your Board is unable to recommend any dividend for the fnancial year ended 31st March 2012.
COMPANY PERFORMANCE
During the year under review, your Company’s total income was ` 46744.84 lakhs as against ` 41794.67 lakhs in the previous
year. The proft before interest and depreciation was ` 5515.20 lakhs vs. ` 1035.42 Lakhs of last year. The interest cost was
` 5178.17 Lakhs vs ` 7823.24 Lakhs last year. During the year the operations of the Company improved across all parameters.
The cane crushed was higher, the average recovery was higher, the Company could mobilise harvesting labour in time
leading to consistent and continuous operation at all the units. The capacity enhancement at Haliyal and Ramdurg and
debottlenecking of the facilities helped the Company to achieve sustained performance during the current sugar season.
The operations at Sankili was stabilized.
The sugar prices which showed an increasing trend till the start of season 2011-12 in October 2011 fell once new sugar started
coming to the market and remained sluggish till March 2012 due to anticipated higher sugar output during sugar year 2011-
12. With the close of season, prices have started showing some improvement. The sugar production in the Country witnessed
a 16% percent growth over the last two years driven mainly by improved cane acreage in response to higher cane prices. In
line with the industry in North Karnataka, the Company had to pay ` 200 per tonne of cane as additional cane price for the
cane supplied in Karnataka units during the previous sugar season. The continued increase of cane price year after year with
no signifcant and proportionate increase in sugar sales price is a challenge for the sugar industry in the long term to sustain
performance. The Government’s continued control over the sugar industry through release mechanism, cane price and other
restrictions afect the Industry.
Parrys Sugar Industries Limited
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Sugar Division
In Karnataka, the unit at Haliyal performed signifcantly better with improved reliability of machinery and equipment. The unit
recorded a peak recovery of 13.3%, which is the highest in Karnataka and average recovery of 12.2%. The unit crushed a total
quantity of 5.52 lakhs MT of Cane vs. 3.48 Lakhs MT last year, an increase of 59%. The average cane crushed per day was 3248
MT with the crushing touching a maximum of 4835 MT in a particular day. The crushing of cane in the month of March 2012
was afected due to the limited availability of cane and drop in the cane yield.
The performance of the plant at Ramdurg was also signifcantly better than last year with a crushing of 5.39 Lakhs MT of
cane vs 3.95 Lakhs MT last year, an increase of 36%. The average annual recovery was at 12.10% and the crushing touched
a maximum of 4000 MT in a particular day. The Company has already placed order for the enhancement of its cogen unit at
Ramdurg to 13 MW and the enhanced capacity is expected to be operational before the next crushing season resulting in
higher earnings for the unit.
The performance of the plant at Sankili was also signifcantly better than last year with a crushing of 5.55 Lakhs MT of cane vs
3.67 Lakhs MT last year, an increase of 51%. The average annual recovery was at 9.88% and the crushing touched a maximum
of 4348 MT in a particular day.
During the year, the Company crushed a total 16.45 Lakhs MT of cane, produced 18.77 Lakhs qtls. of sugar as against 11.11
Lakhs MT of cane, 11.95 Lakhs qtls. of sugar during the previous year, an increase of 48% and 58% respectively. The average
recovery rate was 11.41% vs 10.76 % last year.
The major challenge for the Company for the future is to further improve operating efciencies and improve the quality of output.
Distillery Division
The distillery division produced 186 Lakh liters of industrial Alcohol /Ethanol/ENA as against 139 Lakh litres in the previous
year registering an increase of 34%. In value terms, the sale of industrial alcohol/Ethanol/ENA during the year was ` 51.22
Crores as against ` 41.88 Crores in the previous year registering an increase of 22%. Increase in production and sale was due
to higher cane crushing resulting in higher production of molasses. The sale of ENA/Ethanol produced at Distilleries fetches
better revenue and can act as a stabilizer to the threat of cyclicality of sugar business. The Company is availing the Certifed
Emission Reduction (CER) benefts for its distillery unit at Sankili, Andhra Pradesh under Clean Development Mechanism
(CDM) of United Nations Framework Convention on Climate Change (UNFCCC).
Power Division
The total power generated by our Co-generation plants were 1345 Lakhs units as against 1267 Lakhs units in the previous
year mainly due to availability of more bagasse from higher sugarcane crushing. The Company has not purchased any coal
during the year due to maximum availability of bagasse thereby substantially improving the performance and operations of
its cogen units. The sale of power was at ` 2842 Lakhs in the current year as against ` 2263 Lakhs recorded in the previous
year registering an increase of 26%. The revenue on power sales was better than last year due to higher export coupled with
higher rate on account of the sale through power exchange by the Haliyal unit which was earlier under the power purchase
agreement with the State Government Utility. The issuance of Order by the Government of Karnataka under Section 11 of the
Electricity Act, 2003 mandating to supply to the State Government utilities at a remunerative rate had also contributed to the
revenue. At Sankili the Company continues to reel under pressure due to the lower tarif ofered by the State Government
under the long term Power Purchase Agreement entered into by the Company. The dispute pertaining to the revision of power
tarif from the Year 2004 as pronounced by the State Commission is pending before the Appellate Tribunal for Electricity (ATE).
Any favourable Order by the ATE will be in the interest of the Cogen power producers in the state of Andhra Pradesh. Increase
in power generation capacity, both during the season and of season shall be the future thrust area for the Company.
The Government has launched the Renewable Energy Certifcate (REC) mechanism to mainstream the renewable energy
sources across the nation. Though REC is a market based instrument enabling the obligated entities to meet their Renewable
Purchase Obligation (RPO) and in the process enabling the renewable energy producers to get higher revenue through sale
of such Certifcates, the regulations framed by the State Electricity Commissions pose a hindrance to avail such beneft. Going
Annual Report 2011-12
7
forward it is expected that the various State Commissions will modify the regulations in due course to enable all renewable
energy producers to take advantage and beneft from the REC Mechanism.
CHANGE IN CAPITAL STRUCTURE
During the year, the Company allotted 250 Lakhs, 8% cumulative preference shares of ` 10/- each to the Holding Company,
E.I.D. - Parry (India) Ltd. aggregating to ` 25 Crores. Consequently, the paid up share capital of the Company has increased to
` 134.08 Crores w.e.f. 30th August, 2011.
SOCIAL RESPONSIBILITY
The Company in collaboration with Help Age India, have launched a project to run a Mobile Medicare Unit in and around
Rajam, Srikakulam District, Andhra Pradesh to provide basic and essential medicare, to the poor, needy and elderly population
of the society irrespective of caste, creed or religion. At Sankili, the Company is providing assistance to children of sugar cane
farmers for quality education by rembursing their school fees. The Company has taken measures to provide drinking water
facilities in the villages in and around its command area. During the year, medical facilities were provided and blankets were
distributed during the winter to the harvesting and transportation labourers working in the cane feld. The Company is in the
process of improving the infrastructure to provide better facilities to these migrant labourers and their children in the feld of
education and health care. The Company is also rembursing the collage fees, cost of books etc., for one child in the family of
those who have sold land to the company in Haliyal.
SUBSIDIARY COMPANY
The Company’s wholly owned subsidiary, Alagawadi Bireshwar Sugars Pvt. Ltd. (ABSPL), proposes to set up an integrated
sugar plant at Raibagh, Karnataka and the land acquisition process has been completed. The Company is in the process of
conversion of land and obtaining various other clearances/approvals.
SUBSIDIARY ACCOUNTS
In terms of the Circular No.: 2 /2011 dated 8th February 2011 issued by the Central Government u/s 212(8) of the Companies
Act, 1956, copies of the Balance Sheet, Proft & Loss Account, and Reports of the Board and the Auditors of the Company’s
wholly owned subsidiary, Alagawadi Bireshwar Sugars Pvt. Ltd. have not been attached to the Balance Sheet of the Company
as at 31st March 2012.
However, as directed by the Central Government, the fnancial data of the subsidiary has been separately furnished forming
part of this Annual Report. These documents will also be available for inspection at the Registered Ofce of the Company
and of the concerned subsidiary company during working hours up to the date of the Annual General Meeting. However,
the related detailed information of the Annual Accounts of the Subsidiary Company will be made available to the Holding
Company’s shareholders seeking such information at any point of time. The Annual Accounts of the Subsidiary Company will
also be kept for inspection by the investors at the Registered Ofce of the Company and that of the Subsidiary Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting
Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors’ Report thereon form
part of the Annual Report.
REPORT TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION
As the Members are aware, a meeting of the Members was convened on November 17, 2011 to consider the erosion in net
worth of the Company as on June 30, 2011 by more than 50% of the peak net worth during the immediately preceding
four fnancial years and to report the fact of such erosion to the Board for Industrial and Financial Reconstruction (“BIFR”)
as required under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985. Accordingly, the Company has
reported the fact of such erosion to the BIFR”.
CREDIT RATING
During the year, rating agency ICRA has reafrmed the Long term ratings at [ICRA] BBB+ (Pronounced as ICRA triple B Plus)
and Short term ratings at [ICRA] A2 (Pronounced as ICRA A two). The aforesaid ratings are valid till January 2, 2013.
Parrys Sugar Industries Limited
8
DIRECTORS
Mr. K. Ramadoss and Mr. V. Ravichandran, Directors retire by rotation in terms of Article 108 of the Articles of Association of the
Company and being eligible, ofers themselves for re-appointment. A brief resume, expertise and details of other directorships
of Mr. K. Ramadoss and Mr. V. Ravichandran are provided in the Corporate Governance Report.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 and on the basis of explanation given by the Executives of the
Company and also subject to disclosures in the Annual Accounts, your Directors to the best of their knowledge and belief
confrm as under:
i. that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with
proper explanations relating to material departures.
ii. that the Directors had 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 afairs of the Company at the
end of the fnancial year and of the loss of the Company for that period.
iii. that the Directors had taken proper and sufcient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
iv. that the Directors had prepared the annual accounts for the fnancial year ended 31st March 2012 on a going concern
basis.
FIXED DEPOSITS
During the year under review, your Company has neither invited nor accepted any fxed deposits from the public as per the
provisions of Section 58A of the Companies Act, 1956. As such, no amount of principal or interest was outstanding as on the
date of the Balance Sheet.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate
Governance Requirements as set out by SEBI and is in conformity with most of the requirements of the voluntary guidelines
on Corporate Governance issued by the Ministry of Corporate Afairs.
CEO/CFO CERTIFICATION
Mr. D. Kumaraswamy, Managing Director and Ms. G. Jalaja, Chief Financial Ofcer, have given a certifcate to the Board as
contemplated under Clause 49 of the Listing Agreement with the Stock Exchanges.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 205C of the Companies Act, 1956, an amount of ` 10.09 Lakhs being the unclaimed dividend was transferred
during the year to the Investor Education and Protection Fund established by the Central Government.
PERSONNEL RELATIONS
Your directors hereby place on record their appreciation for the dedication and competence of all the executives, staf and
workers of the Company. During the year under review, relations between the employees and the management continued to
remain cordial.
CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The information relating to conservation of energy, technical absorption and foreign exchange earnings and outgo pursuant
to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of
Annual Report 2011-12
9
Addendum to the Directors’ Report
The Board of Directors at their meeting held on April 25, 2012 have approved a Scheme of Arrangement (Demerger) between
the Company and the Holding Company, .E.I.D.-Parry (India) Ltd., (EID Parry) under Sections 391 to 394 of the Companies Act,
1956 for transfer and vesting of the Company’s manufacturing facilities located at Haliyal and Sankili, to and in EID Parry, w.e.f
1st April 2012 subject to approval of the shareholders and various other statutory and regulatory approvals.
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 25, 2012 Chairman
Directors) Rules, 1988 is given in the Annexure forming part of this Report.
AUDITORS
The Auditors, M/s. R.G.N Price & Co., retire at the conclusion of the ensuing Annual General Meeting. The Auditors have
confrmed their willingness to act as Auditors of the Company for the fnancial year 2012-13 and have confrmed that their
appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.
COST AUDITORS
M/s Narasimha Murthy & Co., Cost Accountants, were appointed as the Cost Auditors for conducting the cost audit of Sugar,
Distillery and Cogen divisions of the Company for the fnancial year 2011-12. M/s Narasimha Murthy & Co. have confrmed their
willingness to act as Cost Auditors of the Company for the fnancial year 2012-13 and have confrmed that their appointment,
if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 is given in Annexure forming part of this Report.
ACKNOWLEDGEMENT
Your directors acknowledge and express their grateful appreciation for the co-operation and assistance received from Banks,
Government Authorities, Customers, Farmers, Vendors and also the Members for the confdence reposed by them in the
management of the Company and for their continued support and co-operation. Your Directors also wish to place on record
their deep sense of appreciation for the committed services by the executives, staf and workers of the Company.
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 24, 2012 Chairman
Parrys Sugar Industries Limited
10
Information in accordance with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the
9 months period ended 31st March 2012
A. Conservation of Energy
a. Energy Conservation Measures Taken
Haliyal Plant
? Installed one VFD Zero Discharge System (ZDS), boiler Forced Draft
(FD) fan in Distillery for ease of operation and energy conservation
? Introduction of Dynamic juice heater for heating scalding juice with
third body vapour in place of second body vapour.
? Other steam saving measures such as condensate fash vapour
recovery system and introduction of heat recovery for super heat
wash water system.
Ramdurg Plant
? Installation of Dynamic juice heater for heating raw juice with third
body vapour in place of second body vapour.
? Installed Vapour line juice heater between ffth body & condenser.
? Installed Variable Frequency Drives (VFD) for Induced Draft (ID)
fans, clear juice, Sulpher juice & raw juice pumps.
? Installed VFD for bagasse extractor in both boilers
? Installed Planetary gear box for bagasse elevator, Main Bagasse
Carrier & Rake Type Inter Carrier.
Sankili Plant
? Installed Duplex Heater
? Installed VFD for molasses pump
? Installed NHEC Direct Current drives
b. Additional investments and proposals,
if any, being implemented for
reduction of consumption of energy
Nil
c. Impact of the measures at (a) and
(b) above for reduction of energy
consumption and consequent impact
on the cost of production of goods
Haliyal Plant
Better control over operating parameters. Better control over steam
consumption per ton of cane & power per ton of cane.
Ramdurg Plant
Better control over steam consumption per ton of cane & power per ton
of cane.
Sankili Plant
Better control over operating parameters. Better control over steam
consumption per ton of cane & power per ton of cane.
d. Total Energy Consumption and energy
consumption per unit of production
As per Form A attached.
B. Technology absorption
Eforts made in technology absorption As per Form B
Annual Report 2011-12
11
C. Foreign Exchange Earnings and Outgo: (` In Lakhs)
2011-12 2010-2011
a. Activities relating to exports; initiatives taken to increase exports; development
of new export markets for products and services; and export plans;
Nil Nil
b. Total foreign exchange used and earned.
Foreign Exchange used
a) Capital Items
b) Stores & Spares
c) Travel Expenses
d) Consultancy Fees
–
9.82
0.69
–
12.50
–
1.25
0.68
Foreign Exchange earned
Sale of CER 70.13 –
FORM A
Form for Disclosure of particulars with respect to Conservation of Energy
POWER AND FUEL CONSUMPTION 2011-12 2010-11
1. Electricity
(a) Purchased units 3,189,523 32,34,327
Amount (` in lakhs) 95.93 113.48
Rate/ Unit (`) 3.01 3.51
(b) Own Generation
(i) Through Diesel Generator
Units 255,789 2,12,219
Diesel Consumed (Ltrs.) 115,554 89,851
Cons. value of diesel (` in Lakhs) 53.60 37
Units per Litre of Diesel Oil 2.21 2.36
Cost / Unit (`) 20.95 17.63
(ii) Through Steam Turbine
Units generated 105,124,036 4,59,33,410
Cost / Unit (`) 2.03 5.23
2. Furnace Oil
Units (Litre) n.a. n.a.
Amount (`) n.a. n.a.
Cost / Unit (`) n.a. n.a.
3. HSD Oil
Units (Litre) 14,844.00 4,247.67
Amount (` in Lakhs) 6.80 17.86
Rate / Unit (`) 44.65 42.00
CONSUMPTION PER UNIT OF PRODUCTION/SUGAR (QTL.)
1. Electricity (Units) 75.76 89.44
2. Furnace Oil (Litre) – Nil
3. HSD Oil (Litre) – 0.1
Parrys Sugar Industries Limited
12
FORM B
(See Rule 2)
Form for disclosure of particulars with respect to technology absorption.
Research and development (R & D)
1. Specifc areas in which R & D carried out by the
company.
Trial done on wood chip in place of coal in distillery boiler
2. Benefts derived as a result of the above R & D Coal consumption per day to a level of 200 MT could be reduced.
Distillery condensate treatment system for handling liquid
efuent and recirculation.
3. Future plan of action
4. Expenditure on R & D :
(a) Capital
(b) Recurring
(c) Total Nil
(d) Total R & D expenditure as a percentage of total
turnover
Technology, absorption, adaptation and innovation
1. Eforts, in brief, made towards technology absorption,
adaptation and innovation.
Introduction of automation and instrumentation equipment
1. Cane difuser in sugar unit
2. Spent wash boiler in zero discharge system in distillery
2. Benefts derived as a result of the above eforts,
e.g., product improvement, cost reduction, product
development, import substitution, etc.
1. Cane difuser could give good improvement in sugar
recovery from a level of 10 – 11 % to 12 % and above
2. Productivity could be raised in distillery from 41 lac lit. to
86 lac lit.
3. In case of imported technology (imported during
the last 5 years reckoned from the beginning of the
fnancial year), the following information may be
furnished:
(a) Technology imported
(b) Year of import
(c) Has technology been fully absorbed?
(d) If not fully absorbed, areas where this has not
taken place, reasons therefor and future plans of
action.
Nil
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 24, 2012 Chairman
Annual Report 2011-12
13
Information as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 and forming part of
Director’s Report for the Financial Year (9 months) ended 31st March 2012.
Name/Age Designation
and Nature of
Employment
Remuneration
(` in Lacs)
Qualifcations/
Experience
Date of
Commencement
of employment
Previous
Employment
D. Kumaraswamy Managing
Director
71.30 Bachelor of Commerce, Chartered
Accountant & Company Secretary
35 years
28.08.2010 E.I.D.-Parry (India)
Ltd.
? The nature of appointment is contractual.
? Mr. D. Kumaraswamy is not related to any Directors of the Company.
? Neither Mr. D. Kumaraswamy nor his spouse or dependent children hold any shares of the Company.
? Remuneration as shown above includes salary, allowances, incentive, Company’s contribution to Provident Fund,
Superannuation Fund and Gratuity Fund, Medical facilities and perquisites valued in terms of actual expenditure incurred
by the Company in providing the benefts excepting in case of certain expenses where the actual amount of expenditure
cannot be ascertained with reasonable accuracy, and in such cases, notional amount as per Income-tax Rules has been
adopted.
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 24, 2012 Chairman
Parrys Sugar Industries Limited
14
Management Discussion and Analysis
INDUSTRY STRUCTURE AND DEVELOPMENT
Sugar Industry is the second largest agro-based industry, next only to the textile industry and India is one of the largest
producers and consumers of sugar in the world. The Indian Sugar Industry is playing a pivotal role in rural development,
supporting over 50 million sugarcane farmers, their dependents and a large mass of agricultural labourers involved in
sugarcane cultivation, harvesting, machine manufacturing etc. constituting about 7.5% of the rural population. In addition,
about 0.5 million skilled and semiskilled workers, mostly from the rural areas are engaged in the sugar industry. Thus, the sugar
industry has been a focal point for socio-economic development in the rural areas by mobilizing rural resources, generating
employment & higher income, besides giving a fllip to transport and communication facilities. The sugar industry in India is
highly fragmented. Since sugarcane is the primary raw material from which sugar is manufactured in India, sugar mills are
set up in cane growing states such as Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and Gujarat. These
six states together account for around 85-90 percent of the sugarcane production in the country. Hence, sugar capacities and
production are concentrated in these states.
The sugarcane crop grows for 8-14 months, depending on the climate and the seeds used. Factors that determine the yield
and quality of sugarcane are temperature, rainfall and soil. Sugarcane is usually grown in a frost-free, warm and humid
climate. In India, around 90 per cent of the sugarcane cultivation happens in irrigated land. In a year of surplus sugarcane
production, sugarcane crushing continues beyond April and extends up to June/July, when sugar recovery declines and
molasses formation increases signifcantly.
In most parts of the world, sugarcane is handled manually and involves extensive labour. However, this trend has been changing
with the increasing need to mechanize the operations to improve the recovery rate. Given the nature of regulations in the
sugar industry, there are no foreign sugar producers in India. Industrial consumers and households in the country determine
the growth of the domestic sugar consumption. Population growth and relative prices of sugar vis-a-vis substitutes such as
gur/khandsari determine the direct demand for either of the sweeteners. Indirect (industrial) consumption of sugar can be
broadly classifed into bakeries, confectioneries & chocolates, soft & fruit drinks, sweetmeats, tea & cofee and other segments
like ice-creams, jams, alcoholic beverages etc. Growth in production volumes of these various segments coupled with I/O
norms (input-output) of sugar content in each of these end-use products is used to forecast growth for sugar consumption
from the industrial user segment.
The sugar supply in India also depends on various government controls on the distribution of sugar. The government controls
the sale of sugar in the open market through its regulated release mechanism. In addition to the above factors, the import and
export of sugar determine the fnal supply in the market. Sugar prices, as a result, depend on the demand-supply situation
during the year.
The sugar sector in India, hence, goes through a phase of cyclicality, primarily on account of situations of high cane pricing,
which impacts the proftability of the sugar mills as a result of which payment arrears to farmers increase. The farmers, hence,
shift from the production of cane to other competing crops, thereby impacting the sugarcane output. A typical Indian sugar
cycle goes through a phase of 1-2 years of up cycle followed by 3 years of down cycle. The Indian sugar sector currently has
500 operational mills, including a mix of private and co-operative mills. The area under sugarcane has been closely linked to
the Indian sugar cycle, though the area has registered a CAGR of 1.7% since 1950-51 to 2010-11. Sugar production, on the
other hand, has recorded a CAGR of 2.9%, primarily led by gains in productivity and irrigation facilities.
BY PRODUCTS
Molasses is a thick syrup by-product which arises from the processing of the sugarcane into sugar. In sugar factories, sugar is
crystallised from a concentrated juice in three separate stages wherein each stage results in the production of a crystallised
sugar fraction and a non-crystalline fraction or molasses fraction called molasses.
Fermentation of molasses at distilleries yields extra neutral alcohol, rectifed spirit and ethanol. Ethanol, or anhydrous alcohol,
is produced from the fermentation of molasses. It is 99.5 per cent pure alcohol. Ethanol can also be produced directly from
sugarcane, instead of through the molasses route. In India, ethanol is mostly manufactured from the ‘C’ molasses obtained
Annual Report 2011-12
15
during the process of crushing sugarcane. In Brazil, ethanol is produced directly from sugarcane. In September 2008, the
government announced a National Policy on bio-fuels which targets 20 per cent ethanol-blending by 2017. However, the
ethanol blending programme, which calls for 5 per cent blending of ethanol with petrol, has not taken of so far due to limited
feedstock availability, unattractiveness of manufacturing ethanol directly from sugarcane or C molasses, issues related to
pricing, tendering and taxation issues at the State level.
COGENERATION OF POWER
Globally, most sugar factories use bagasse to meet their electricity and steam requirements. Bagasse is burnt in boilers
which releases large amounts of heat for boiling water and generating high-pressure steam. The steam is used to drive a
turbine, which generates electricity. The residual low-pressure steam is used in the sugar making process. Cogenerated power
has environmental benefts in terms of replacing fossil fuels, and is also renewable in nature. For a sugar mill, opting for
cogeneration of power has the advantages of getting an additional stream of revenue. The mill can also partly protect itself
from the cyclical nature of sugar business. The Indian sugar industry went through a phase of backward integration in early
2000, wherein most of the large mill owners had setup co-generation capacities along with alcohol manufacturing facilities.
The renewable power capacity within India is pegged at 32% (2010) out of which, renewable other than hydro accounts for
9.88% or 16,786 MW. The sugar sector contributes 900 MW capacity out of the total of 16,786 MW with a potential to reach
21,000 MW. The Indian sugar industry over the years has tried to diversify its revenue mix from sugar to a mix of power,
sugar and alcohol. In India, the government is ofering a number of incentives to encourage investment in the bagasse-based
cogeneration projects in terms of lower fnancing rates and capital subsidies to cooperatives or public sector sugar mills.
Other benefts like accelerated depreciation, income tax holidays, reduced customs duty, central excise exemption and sales
tax exemption are also given in some States. However, the potential for bagasse-based cogeneration of power is yet to be
realised fully. Cogeneration sector growth is expected further by various regulatory measures including the renewable energy
portfolio obligation fxed under the National Action Plan for Climate Control (NAPCC) of Government of India, generic tarif
norms announced for co-generation projects; norms and pricing framework for Renewable Energy Certifcates (RECs); and
amendment of the provisions of the grid code to ensure smoother of take and transmission of power by utilities. However,
the major bottlenecks in harnessing the co-generation potential has been lack of management focus; weak fnancial position
of many sugar mills, especially smaller units including those run by the co-operative sector; and relatively unattractive tarifs.
SUGAR SCENARIO
The Indian sugar sector is highly cyclical in nature primarily on account of (i) government policy intervention and (ii) weather
conditions. The Indian sugar sector remains regulated, as far as government control is concerned, primarily on account of
following factors:
? Government intervened sugarcane pricing: The Central Government each year releases a country-wide Minimum Support
Price (MSP) for cane, which is known as Fair and Remunerative Pricing (FRP), while State Governments decided their own
MSP known as State Advisory Price (SAP). The sugar mills are expected to pay based on the SAP, wherever applicable
and FRP is for States where the state government does not declare its own prices. Given that a large proportion of rural
farmers in the key cane growing states are dependent on the sugarcane sector, the SAP is largely politicised.
? Restriction in open market sales: Sale of sugar in the open market is also restricted based on a monthly release quota system
which is fxed by the Government at mill level. Further, the government has also prescribed holding limits for industrial
users to regulate the supply in the system. Recently the Govt. has started releasing quarterly quota instead of monthly
quota.
? Levy sugar pricing: On the pricing front, the government currently has imposed a 10% levy sugar quota, wherein the mills
are supposed to sell 10% of their production to the government for distribution under the PDS system.
? Import and export restrictions: On the trading side, the import and export of sugar is regulated by the Government, wherein
Government permits are required for either importing or exporting sugar into and from the country. However, companies
are free to import sugar for re-export, whereby they convert raw sugar into white and re-export the same out of the
country without any sugar actually coming into the country.
The Indian sugar production in the past couple of years has gone through a volatile phase, primarily on account of bad
Parrys Sugar Industries Limited
16
weather conditions in 2008-09 and 2009-10. Sugar production in India fell from 28.63 Mn tonnes in 2007-08 to a low of 15.95
Mn tonnes in 2008- 09, though, it has recorded gains in subsequent years and was at 26 Mn tonnes in 2011-12.
Industry sources say that the Sugar output in India, will drop for the frst time in four years in the next season as dry weather in
some regions spur farmers to plant other crops. The harvest may total 25 million metric tons in the season beginning October
1 from as much as 26 million tons this year. The nation may continue exports for a third year as supplies from the new crop and
inventories will exceed domestic demand by about 6.5 million tons. It is expected that the surplus in 2012-2013 would not be
as large as in 2011-2012, but it will defnitely be big enough to keep world prices under pressure. Both the Thai and the Indian
crop are expected to be large in 2012-2013.
Recently, the Government of India has been actively considering partial or total de-control of the sugar industry. The Govt.
has constituted a committee headed by Economic Advisory Council Chairman, Mr. C. Rangarajan to examine issues related
to deregulating the sugar industry. The Industry has made a number of representations to the Committee for deregulation
in the area of levy mechanism, release order, packing of sugar, export of sugar, cane price fxation and remunerative prices
for co-generation and ethanol. It is expected that the de-control of the sugar sector could be in a phased manner starting
from removal of the levy price mechanism, monthly release quotas, linking of ethanol prices to petrol prices and export/
import restrictions. The decontrol of cane pricing may not come in a hurry, however, a phased manner of de-control would act
sentimentally positive for the sector.
The world sugar market continues to experience considerable price volatility. The world indicator price for raw sugar witnessed
a succession of peaks and downward corrections in 2010 before soaring to a 30-year high of USD 36.08 cts/lb (USD 795.4/t)
in February 2011. Market fundamentals driving volatile prices were large global sugar defcits in the previous two seasons
and adverse weather in a number of countries that reduced the size of the expected rebound in production to higher prices.
World sugar stocks, which had already been drawn down, fell to their lowest level in 20 years in 2010-11, supporting higher as
well as more volatile market prices. International sugar prices are expected to ease back over the remainder of 2011 and into
2011/12, as production responds around the world to recent high prices and the global balance moves into a larger surplus
that allows the start of stock rebuilding.
REVIEW OF COMPANY’S BUSINESS
The Company has three Sugar Plants located at:
(i) Sankili in Andhra Pradesh having a cane crushing capacity of 5000 tonnes per day, Co-generation capacity of 16
Megawatt (MW) and a Distillery unit capacity of 40 Kilo litres per day (KLPD). This unit commenced commercial operation
in December 1997.
(ii) Haliyal in Karnataka having a cane crushing capacity of 4000 tonnes per day (TCD) expandable to 5000 TCD, Co-generation
capacity of 24 Megawatt (MW) and a Distillery unit capacity of 45 Kilo litres per day (KLPD). This unit commenced
commercial operation in December 2008.
(iii) Ramdurg in Karnataka taken on lease from Shri Dhanalakshmi Sahakari Sakkare Karkhane Niyamat (DSSKN) having a
cane crushing capacity of 3500 TCD and Co-generation capacity of 6 MW expandable to 13 MW. This unit commenced
commercial operation in December 2008.
All the company’s sugar plants are integrated with co-generation and distillery facility except Ramdurg plant which has
6MW cogen. The Company is enhancing the cogen capacity to 13 MW at Ramdurg. The Company is continuously working
on improving operational efciencies and production techniques, benchmarking with the best in the industry. The Company
converts bagasse into electricity in its Co-generation units and processes molasses into various types of alcohol, thus
completing the value chain.
CANE AND SUPPORT TO FARMERS
Majority of the sugar facilities of the Company are located in North Karnataka, ofering the company a geographical advantage
of being in the highest sugar recovery zone in India, good soil conditions and availability of abundant water coupled with
sugarcane recovery being highest across India. North Karnataka usually gets good rainfall from June onwards during south
Annual Report 2011-12
17
west monsoon and the cane plantation starts from October to March, peak during December to February. Growers grows more
than 80% of high sugarcane verities like coc 671, co 86032 and gets average yield of 30 Mts per acre. Though the Factories
have ofcially demarcated cane command area, practically it is not enforced. Crushing starts from October and ends before
March end and during the period of excess cane, crushing lasts till April and May depending upon the available cane volume
for that particular sugar season. Most of the mills in North Karnataka, fxes cane price on their own and if the growers feel that
cane price is less, representation is made through the Government and the cane price is decided by mutual negotiations. In
Karnataka, normally the cane price is paid as frst advance immediately after harvest and the fnal cane price is paid after the
crushing is over. There has been continued increase of cane price year after year with successive governments treating this as
a populist measure with no proportionate improvement in sugar sales price which is a challenge for the sugar industry.
Cane harvest and transport arrangements lies with sugar mills and more than 60-70% of cane harvest and transport gangs
are arranged from south Maharashtra districts every year. Mills have to engage dedicated cane team for this arrangement.
This is one of the major areas where the Company has to devote substantial eforts so that harvesting is done smoothly.
Holding these gangs and to make continuous crushing operation at optimum capacity is a great challenge. Most of the mills
do not focus much on cane development since they get good recovery because of conducive climate, good soil condition and
improved varieties of cane. The growers manage their own and grow the sugarcane without much difculty. The Company
arranges inputs like fertilizer and micro nutrients through its own depots and through agencies with help of “Mana Gromor”.
Because of climatic condition there are not much pest and diseases problems in cane cultivation in North Karnataka. During
summer, the cultivation faces early shoot borer attack. There are also micro nutrients like Zinc and iron defciencies seen in
some pockets particularly in ratoon crops. In the Company’s command area, the growers are good, hardworking and harvest
their cane in time. In the state of Andhra Pradesh unlike Karnataka, well-disciplined cane command area prevails. In Andhra
Pradesh planting starts from December and closes by February. Like Karnataka the practice of harvest labourers also prevails
and more than 50-60 % is arranged from nearby pockets. In AP, cane price fxed as factory gate price. Growers pay cane
harvest and transport charges and also provide some portion of cane transport charges as subsidy like other Mills. Growers
are marginal, holdings are small and there is scope for further improving the cane area. For cane development, the growers
need infrastructures like wells, bore wells, micro irrigation and pump sets through medium term loan. There is a possibility of
increasing the average yield also by way of arranging inputs and working capital in time.
The Company has developed a multipronged plan through infrastructure development, quality seed nursery programme,
inputs arrangements, mechanization and technical infrastructure support to increase the availability of cane which is the
basic raw material for the manufacture of sugar and life line of any Sugar Company.
MARKETING
With increasing production in Karnataka, the Company is targeting other sugar markets besides local trade. These include
sales to institutions, retail and to sugar defcit regions primarily in and around West Bengal and Orissa. With the production
of M30 grade sugar the Company is expanding its customer base. Besides the ability to sell the higher volumes of production,
sales to these markets also has the advantage of a premium price as compared to local trade. The target markets for Extra
Neutral Alcohol (ENA) will continue to be primarily IMFLs, while Ethanol sales will be to OMCs for petrol blending and to the
Pharma Sector.
RISK MANAGEMENT
The Company has adopted a system based approach for risk management, with the clear objectives of identifcation,
evaluation, monitoring and minimization of the identifable risks. The Company has a Risk Management Committee for
assessment and evaluation of the risks associated with the business through its risk document. The management periodically
reviews the risk management framework to identify the major business risks as applicable to the Company and works out
their mitigation strategy.
The major risks faced by Sugar business are the availability of cane, regulatory risks, price of sugar and that of sugarcane.
Sugarcane is the key raw material for sugar and any difculty in getting cane at right time will have impact on the business.
Parrys Sugar Industries Limited
18
The key factors that infuence cane availability are climatic condition, availability of cane harvesting labour and farmers opting
competitive crops.
Availability of sugarcane is ensured by fostering good relationship with the cane growers. This is done by undertaking various
measures in supporting them in cultivating cane besides making payment for their supplies in time. These are in the form
of providing assistance in drip irrigation, mechanical harvesting and improved cane varieties. The company also extends
subsidies on good quality seeds, fertilisers and manure, ensures timely cane payment to farmers, timely distribution of
indents, proper surveys and incentivizing the farmers to cultivate higher volumes of cane in the Company’s command area
through various means.
The sugar industry is regulated by the Central and State Governments. Sugarcane price, known as FRP, is fxed by the Central
Government well before the advent of the season while the state government fxes the State Advised Price (SAP), always
signifcantly higher than FRP. The State Government controls the sugarcane command area while the Central Government
regulates exports and imports. The Company is in close association with the Indian Sugar Mills Association (ISMA) and The
South Indian Sugar Mills Association (SISMA), who are in the process of developing a common strategy to place appropriate
policies in for the sugar sector.
FINANCIAL PERFORMANCE
The current fnancial year is for a period of 9 months i.e. from 1st July 2011 to 31st March 2012. During the year 2011-12, the
Company has reported a proft before interest and depreciation of ` 5515.20 Lakhs. The segment-wise performance of the
Company is as under:
Product/Services 2011-12 2010-11
Sales PBIT Sales PBIT
Quantity Value (` in Lakhs) (` in Lakhs) Quantity Value (` in Lakhs) (` in Lakhs)
Sugar (Quintals) 1,589,519 40,013.30 1,341.10 12,41,396 32,768.23 (2,536.27)
Cogen (Units) 79,408,742 2,343.24 1,433.02 9,01,72,760 3,179.31 (549.46)
Distillery (Ltrs) 12,416,700 3,773.93 728.23 18,413,950 5,591.36 617.46
Finance charges
The Company had term loans and working capital borrowings aggregating to `60724.16 Laksh as on 31st March 2012. The
Company incurred fnance charges of ` 5,178.17 Lakhs during the year 2011-12 as compared to ` 7,823.24 Lakhs for the year
2010-11.
Loss after tax
The loss after tax stood at ` 6.37 Crores as against ` 94.67 Crores in the previous year.
INTERNAL CONTROL AND SYSTEMS
The Company believes that internal control is a necessary part of the principle of governance and that freedom of management
should be exercised within a framework of appropriate checks and balances. The Company remains committed in its endeavour
to ensure an efective internal control environment that provides assurance on the efciency and efectiveness of operations,
reliability of fnancial reporting, statutory compliance and security of assets. The Company has a well-established and robust
internal systems and processes in place to ensure smooth functioning of the operations. An efective internal control system,
supported by an Enterprise Resource Planning platform for all business processes, ensures that all transaction controls are
continually reviewed and adequately addressed. The control mechanism involves well documented policies, authorisation
guidelines commensurate with the level of responsibility and standard operating procedures specifc to the respective
businesses. The Company has an Internal Audit department that monitors and makes continuous assessments of the adequacy
and efectiveness of the internal controls and systems across the Company. The status of compliance with operating systems,
internal policies and regulatory requirements are also monitored. The Board, Audit Committee and the Management review
the fndings and recommendations of the Internal Audit department and take corrective actions wherever necessary.
Annual Report 2011-12
19
HUMAN RESOURCES
The company recognizes people as the primary source of its competitiveness and continues to focus on people capabilities by
leveraging technology and creating a learning environment. The Company had a total employee strength of 607 as on March
31, 2012. The Human Resources function is proactively focused to meet the vision – “To build Credible, Reliable & Capable
Human Capital to deliver superior Individual and Business performance”. In order to achieve this vision, the Company has
evolved focused HR Strategy of “Attracting, engaging, developing and retaining of people to enable the fulfllment of business
aspirations and competitive success of Parrys Sugar” and endeavor to shape its employees as a vital strategic asset and thus
has initiated on a priority basis various HR initiatives. There is a major thrust on realigning, integrating and strengthening of
people processes to cater turn-around and debottlenecking plans in Karnataka & Andhra Pradesh.
Talent Management
A thrust is given to addressing critical position talent gaps and strengthens Plant leadership (HODs) with right capabilities
through focused talent acquisition. The Company has identifed and established partnership with VSI, NSI Agri & Management
Institutions for sourcing of young & fresh talents.
Foster Employee Engagement
Employee Engagement is a critical driver of retention, employee productivity and business performance. The Company
has initiated Rationale Engagement process like, PPMM, Cane & Manufacturing meets (Exerg & Canect), timely & periodical
communication to all segments, Parrys Quality Day, etc. and Emotional Engagement process like, rewarding exceptional
performance & recognizing exemplary behavior, employee get-togethers, etc.
Enhance People Capability
Building and enhancing people capabilities is central to strategy execution. The Company endeavor to build the right skills &
capabilities for current and future needs. During the year 2011-12, the Company has identifed and established partnership
with technical training institutions like NTTF (for engineering skills), VSI & NSI (for sugar process skills) and conducted
customized skills training to improve the skill levels of employees.
Enable Performance Culture & Being Cost Advantaged to propel performance
The Company has implemented a performance and reward architecture that is aligned to its strategy. This initiative was aimed
at inculcating a performance & achievement orientation driven culture which is focused on achievement of annual business
results and goals that go beyond a year.
Safety
The Company has placed a strong emphasis on the need to have safe healthy work environment and culture of Zero tolerance
on safety violations. An integrated Quality, Health, Safety & Environment Policy was evolved to reinforce and reafrm the
untiring commitment of leadership towards Safety.
Employee Wellbeing
To reiterate the Company’s commitment to the culture of care, concern & wellbeing for the employees, welfare amenities were
established by introducing subsidized employee residential quarters, canteen facilities and occupational health centre.
CAUTIONARY STATEMENT
The management discussion and analysis report containing your Company’s objectives, projections, estimates and expectation
may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. Actual
results may difer materially from those expressed or implied in the statement. Your Company’s operation may inter-alia be
afected by the supply and demand situations, input price and the availability, changes in the government regulations, tax
laws and other factors. The Company cannot guarantee the accuracy of the assumptions and perceived performance of the
Company in future. The investors should bear the above in mind.
Parrys Sugar Industries Limited
20
Report on Corporate Governance
Company’s Philosophy on Corporate Governance
Parrys Sugar Industries Limited, a member of Murugappa Group of Companies, adheres to good corporate practices and is
constantly striving to improve them and adopt the best practices. Adherence to business ethics and commitment to corporate
social responsibility are the enablers for a company to maximising value for all its stakeholders. Parrys Sugar Industries Limited
is committed to the spirit of Murugappa Group by upholding the core values of integrity, passion, responsibility, quality and
respect in dealing with all stakeholders of the Company.
1. Board of Directors
A. Composition
? As on March 31, 2012, the Company had six Directors including a Non-Executive Chairman and a Managing Director.
Of the six Directors, Five are Non-Executive and three are Independent Directors. The Composition of the Board is in
conformity with Clause 49 of the Listing Agreements with the Stock Exchanges.
? The day-to-day management of the Company rests with the Managing Director.
? None of the Directors on the Board are Members of more than ten Committees or Chairman of more than fve
committees across all the companies in which they are Directors.
? The independent directors have confrmed that they satisfy the ‘criteria of independence’ as stipulated in clause 49
of the listing agreement.
The names and categories of the Directors on the Board, their attendance at Board Meetings held during the period July 1,
2011 to March 31, 2012 and the number of Directorships and Committee Chairmanships/Memberships held by them in other
companies as on March 31, 2012 are given below:
Name of the Director Category Number of Board
Meetings during
the year 2011-12
Whether attended
last AGM held on
September 28, 2011
No. of Directorships in
other public limited
companies #
No. of Committee
positions in other public
limited companies $
Held Attended Chairman of
the Board
Member
of the
Board
Chairman
of the
Committee
Member
of the
Committee
Mr. S. Sandilya
Chairman
DIN: 00037542
Independent and
Non-Executive
5 5 Yes 1 4 2 6
Mr. K. Balasubramanian
Director
DIN: 00009132
Independent and
Non-Executive
5 2 No - 7 2 3
Mr. K. Ramadoss
Director
DIN: 03230018
Independent and
Non-Executive
5 4* Yes - - - -
Mr. V. Ravichandran
Director
DIN: 00110086
Non-Independent
and Non- Executive
5 4 Yes - 4 - 3
Mr. N. Srinivasan
Director
DIN: 00123338
Non-Independent
and Non- Executive
5 4 Yes - 6 - 4
Annual Report 2011-12
21
Name of the Director Category Number of Board
Meetings during
the year 2011-12
Whether attended
last AGM held on
September 28, 2011
No. of Directorships in
other public limited
companies #
No. of Committee
positions in other public
limited companies $
Held Attended Chairman of
the Board
Member
of the
Board
Chairman
of the
Committee
Member
of the
Committee
Mr. D. Kumaraswamy
Managing Director
DIN: 00149344
Non-Independent
and Executive
5 4 Yes - 1 - 1
There are no inter-se relationships between our Board members.
* In addition to attending four meetings, Mr. Ramdoss participated in one meeting over teleconference.
# Excludes Directorships / Committee Positions in Private Limited Companies which are not subsidiaries of Public Limited
Companies, Foreign Companies and Companies under Section 25 of the Companies Act,1956.
$ Figures include Directorships / Committee Positions in Audit Committee and Shareholders / Investors Grievance
Committees only.
None of the above Directors hold any shares in the Company as on March 31, 2012.
B. Board Meetings
The Board meets atleast once in a quarter to review the fnancial results and other items on the agenda, which are
distributed to the Directors in advance. Five Board meetings were held during the period ended March 31, 2012. These
were held on July 25, 2011, September 28, 2011, October 21, 2011, January 25, 2012 and March 28, 2012 and the
maximum gap between the two Board Meetings did not exceed four months.
None of the Non-Executive Directors have any material pecuniary relationship or transaction with the Company.
C. Changes in the composition of Directors during the fnancial year 2011-12 (9-months period).
There was no change in composition of the Board.
D. Code of Conduct
The Company has adopted the code of conduct for all Board members and Senior Management as required under Clause
49 of the Listing Agreement. The Code is posted on the Company’s website: www.parrysugar.in. All Board members and
Senior Management personnel have afrmed compliance with the Code on an annual basis and a declaration to this
efect by Mr. D. Kumaraswamy, Managing Director is attached to this Report.
E. Profle of Directors retiring by rotation and seeking re-appointment in pursuance of Clause 49
of the Listing Agreement.
Name of the Director Mr. K. Ramadoss Mr. V. Ravichandran
Date of Birth 26/04/1950 09/06/1956
Date of Appointment 27/08/2010 27/08/2010
Qualifcations B.Sc, C.A.I.I.B Engineering Graduate and holds a Post Graduate Diploma
in Management from IIM, Ahmedabad besides being a
Cost Accountant and a Company Secretary.
Expertise in specifc
functional area
Banking Operations, Business
Development, Policy matters,
Credit Management with special
emphasis on stressed assets.
Finance, Marketing and General Management
Parrys Sugar Industries Limited
22
Chairman/Director of
other Companies
Nil Director of other Companies
? Coromandel International Ltd.
? E.I.D.-Parry (India) Ltd.
? Silkroad Sugars Pvt. Ltd.
? CFL Mauritius Ltd.
? Parry America Inc.
? US Neutraceuticals LLC
? Foskor (Pty) Ltd.
? Sabero Organics Gujarat Ltd.
? Murugappa Holdings Ltd.
Chairman/Member of
the Committees(*) of
the Boards of which
he is a Director
Nil Audit Committee-Member
? E.I.D.- Parry (India) Ltd.
Share Transfers & Investors Grievance Committee -
Member
? Coromandel International Ltd.
? E.I.D.- Parry (India) Ltd.
Compensation & Nomination Committee - Member
E.I.D.-Parry (India) Ltd.
No. of shares held in
the Company
Nil Nil
(*) includes Audit, Remuneration/nomination/compensation and Shareholders/Investors Grievance Committees of other
Companies.
2. Audit Committee
A. Composition of the Audit Committee:
The Audit Committee of the Board comprises four members viz., Mr. S. Sandilya, Mr. K. Balasubramanian, Mr. K.
Ramadoss and Mr. N. Srinivasan. Mr. S. Sandilya is the Chairman of the Audit Committee. He is an Independent
Director. The Audit Committee comprises of three Independent Directors and the requirements of Section 292A
of the Companies Act, 1956 and Clause 49 of the Listing Agreements have been complied with. Mr. B. M. Rath,
Company Secretary acts as the Secretary of the Committee.
Chief Financial Ofcer and the Managing Director are permanent invitees to the Audit Committee Meetings. Besides
the Statutory Auditors and Internal Auditors, Cost Auditor and other members of the senior management also attend
when invited to the meetings.
B. Meetings and Attendance during the year
During the period ended March 31, 2012, the Audit Committee met three times on July 25, 2011, October 21, 2011
and January 25, 2012 and the maximum gap between the two Audit Committee Meetings did not exceed four
months. The composition of the Audit Committee and particulars of meetings attended by the members of the
Audit Committee are given below:
SL. No. Name of the Member No. of Meetings
Held Attended
1. Mr. K. Balasubramanian 3 2
2. Mr. S. Sandilya 3 3
3. Mr. N. Srinivasan 3 3
4. Mr. K. Ramadoss 3 2*
(*) in addition to attending two meetings, Mr. Ramdoss participated in one meeting over teleconference.
Necessary quorum was present at all the meetings.
Annual Report 2011-12
23
Mr. S. Sandilya, the Chairman of the Audit Committee was present at the Annual General Meeting held on September
28, 2011.
C. The Terms of reference of Audit Committee:
1. Oversight of the company’s fnancial reporting process and the disclosure of its fnancial information to ensure
that the fnancial statement is correct, sufcient and credible.
2. Recommend to the Board, the appointment, re-appointment and, if required, the replacement or removal of
the statutory auditor and the fxation of audit fees and approval of payment to statutory auditors for any other
services rendered by the statutory auditors.
3. Review with the management, the annual fnancial statements before submission to the board for approval,
with particular reference to:
a. Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s
report in terms of clause (2AA) of Section 217 of the Companies Act, 1956
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Signifcant adjustments made in the fnancial statements arising out of audit fndings
e. Compliance with listing and other legal requirements relating to fnancial statements
f. Disclosure of any related party transactions
g. Qualifcations in the draft audit report.
4. Review with the management, the quarterly fnancial statements before submission to the Board for approval.
5. Review with the management, the statement of uses / application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated
in the ofer document/prospectus/notice and the report submitted by the monitoring agency monitoring the
utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to
take up steps in this matter.
6. Review with the management, performance of statutory and internal auditors, adequacy of the internal control
systems.
7. Review the adequacy of internal audit function, including the structure of the internal audit department,
stafng and seniority of the ofcial heading the department, reporting structure coverage and frequency of
internal audit.
8. Discuss with internal auditors any signifcant fndings and follow up thereon.
9. Review the fndings of any internal investigations by the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the
Board.
10. Discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower mechanism.
The scope of Audit Committee includes matters which are set out in Clause 49 of the Listing Agreement with
Stock Exchanges as amended from time to time read with Section 292A of the Companies Act, 1956.
3. Remuneration Committee
A. Composition of the Remuneration Committee
The Remuneration Committee comprises four members viz, Mr. S. Sandilya, Mr. K. Balasubramanian, Mr. V.
Ravichandran and Mr. K. Ramadoss. Mr. S. Sandilya, an Independent Director, is the Chairman of the Remuneration
Parrys Sugar Industries Limited
24
Committee. Mr.B. M. Rath, Company Secretary acts as Secretary to the Remuneration Committee. Mr. S. Sandilya, the
Chairman of the Remuneration Committee was present at the Annual General Meeting held on September 28, 2011.
B. Terms of Reference
? Determine and recommend to the Board, the remuneration payable including any revision in remuneration
payable to Managing Director / Executive Directors / Non-Executive Directors.
? Take into consideration and ensure compliance of the provisions under Schedule XIII of the Companies Act,
while determining the remuneration.
? Consider such other matters as the Board may advise the Committee.
C. Remuneration Committee Meetings
The Remuneration Committee Meetings are held whenever matters pertaining to the remuneration payable
including any revision in remuneration to Managing Directors/Executive Directors/Non Executive Directors, are
considered.
During the period ended March 31, 2012 the Committee met once on July 25, 2011.
D. Attendance of Remuneration Committee Members during period ended March 31, 2012
Sl. No. Name of the Member No. of Committee Meetings
Held Attended
1. Mr. S. Sandilya 1 1
2. Mr. K. Balasubramanian 1 1
3. Mr. V. Ravichandran 1 1
4. Mr. K. Ramadoss 1 1*
(*) Mr. K. Ramadoss participated over teleconference.
E. Remuneration Policy
i) Remuneration to Executive Directors
Remuneration to the Executive Directors comprises Salary, Allowances & Perquisites and performance incentive.
While determining the remuneration, the Committee takes into account the fnancial position of the Company,
prevailing trend in the industry, qualifcation, experience and past performance of the person. The performance
incentive is determined based on performance parameters as per the Company’s Policy and also based on
certain pre-agreed performance parameters. The Company does not have any Employees Stock Option Scheme.
Details of remuneration paid during the fnancial year 2011-12 (9 months) are furnished hereunder:
(` in Lakhs)
Name of the Director Salary Allowances &
Perquisites
Incentive Total (*)
Mr. D. Kumaraswamy
Managing Director
18.59 38.53 8.26 65.37
(*) Contribution to provident fund and other benefts are excluded.
Note: In view of the inadequacy of proft during the fnancial year 2011-12, the Company had obtained approval
of the Central Government for payment of remuneration in excess of the limits specifed in Schedule XIII of the
Companies Act, 1956.
Annual Report 2011-12
25
ii) Remuneration to Non-Executive Directors
Non-Executive Directors are paid sitting fees at ` 15,000/- for each Board and Audit Committee Meetings and `
10,000/- each for other Committee Meetings. The Company also reimburses the out of pocket expenses incurred
by the Directors for attending the Meeting. The details of sitting fees paid to the Non-Executive Directors for the
fnancial year 2011-12 (9 months) are as under:
Name of the Director Sitting Fees
(` in Lakhs)
Mr. S. Sandilya 1.30
Mr. K. Balasubramanian 0.90
Mr. V. Ravichandran 0.70
Mr. N. Srinivasan 1.15
Mr. K. Ramadoss 1.30
Total 5.35
4. Shareholders / Investors Grievance Committee
A. Composition of the Committee:
The Shareholders/Investors Grievance Committee comprises Mr. K. Balasubramanian, Mr. D. Kumaraswamy and
Mr. K. Ramadoss. Mr. K. Balasubramanian, Non-Executive Independent Director, is the Chairman of the Committee.
The composition of the Committee meets the requirements of Clause 49 of the Listing Agreement. Mr. B. M. Rath,
Company Secretary & Compliance Ofcer acts as the Secretary of the Committee.
The functions of the committee include (i) dealing with the investors complaints like delay in transfers of shares,
non-receipt of balance sheet, non-receipt of declared dividends/share certifcates, dematerialization of shares,
replacement of lost/stolen/ mutilated share certifcates, etc, (ii) investigate into investors complaints and take
necessary steps for redressal thereof (iii) to perform all functions relating to the interest of shareholders/investors
of the Company as may be required by the provisions of the Companies Act, 1956, Listing Agreements and the
guidelines issued by SEBI or any other regulatory authority.
Name and designation of Compliance Ofcer:
Mr. B. M. Rath, General Manager (Legal) & Company Secretary
B. Meetings of the Shareholders/Investors Grievance Committee
During the fnancial year 2011-12 (9 months), the Committee met three times on July 25, 2011, October 21, 2011 and
January 25, 2012.
C. Attendance of Shareholders/Investors Grievance Committee Members are as under:
SL. No. Name of the Member No. of Meetings
Held Attended
1. Mr. K. Balasubramanian 3 2
3. Mr. D. Kumaraswamy 3 2
4. Mr. K. Ramadoss 3 2*
(*) In addition to attending two meetings Mr. K. Ramadoss participated in one meeting over teleconference.
D. The details of complaints received during the fnancial year 2011-12 (9 months) and status
of the same are given below:
SL. No. Particulars No. of complaints
Received Resolved Pending
1. Non-receipt of dividend warrants 3 3 -
2. Non-receipt of securities 4 4 -
3. Non-receipt of Annual Report 2 2 -
Total 9 9 -
Parrys Sugar Industries Limited
26
5. General Body Meetings
(a) Annual General Meetings
The venue, date and time of the Annual General Meetings held during the preceding three years and the Special
Resolution passed thereat are as under:
Year Date & Time
of Meeting
Venue Special resolutions passed
2010-11 September 28,
2011 at 11.00
A.M.
Khincha Hall, Bharatiya
Vidya Bhavan, Race Course
Road, Bengaluru-560001
-
2009-10 August 4, 2010
at 11.00 A.M.
Khincha Hall, Bharatiya
Vidya Bhavan, Race Course
Road, Bengaluru-560001
-
2008-09 September 17,
2009 at 10.30
A.M.
Khincha Hall, Bharatiya
Vidya Bhavan, Race Course
Road, Bengaluru-560001
1) Payment of remuneration to the Managing Director in
excess of the limits as per Sub Clause C of Section II of
Part II of Schedule XIII of the Companies Act, 1956.
2) Payment of remuneration to the Director – Technical in
excess of the limits as per Sub Clause B of Section II of
Part II of Schedule XIII of the Companies Act, 1956.
3) Payment of remuneration to the erstwhile Managing
Director in excess of the limits as per Sub Clause B of
Section II of Part II of Schedule XIII of the Companies Act,
1956.
(b) Extraordinary General Meetings
The venue, date and time of the Extraordinary General Meeting held during the preceding three years and the
Special Resolution passed thereat are as under:
Year Date & Time
of Meeting
Venue Special resolutions passed
2011-12 November 17,
2011 at 11.30
A.M.
Khincha Hall, Bharatiya
Vidya Bhavan,
Race Course Road,
Bengaluru-560001
-
2010-11 June 28, 2011 at
11.00 A.M.
Khincha Hall, Bharatiya
Vidya Bhavan,
Race Course Road,
Bengaluru-560001
Issue of Preference shares of ` 10/- each aggregating to a
nominal amount not exceeding ` 100 Crores.
(c) Postal Ballot
There were no Special Resolutions passed through postal ballot during the Financial year 2011-12.
6. Disclosures
(i) Disclosure on materially signifcant related party transactions that may have potential confict with
the interests of company at large:
There are no transactions which may have potential conficts with the interests of the Company at large. Transactions
with related parties are disclosed in Note No. 47 of the Signifciant Accounting Policies and Notes on Account.
Disclosures from Senior Management relating to all material fnancial and commercial transactions, where they had
or were deemed to have had personal interest, that might have had a potential confict with the interest of the
Company at large were placed before the Board.
Annual Report 2011-12
27
(ii) Disclosure of Accounting Treatment
The Company has followed the Guidelines of Accounting Standards laid down by the Institute of Chartered
Accountants of India (ICAI) in preparation of its fnancial statements.
(iii) Details of non-compliance by the company, penalties, strictures imposed on the Company by Stock
Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last
three years.
There has been no instance of non-compliance by the Company on any matter related to capital markets during
the last three years. No penalties or strictures have been imposed by the stock exchanges or SEBI or any statutory
authority.
(iv) Whistle blower policy and afrmation that no personnel have been denied access to the Audit
Committee.
With a view to maintain high level of legal, ethical and moral standards and to provide a platform for the employees
to voice their concern on any malpractices, impropriety, abuse or wrongdoing, the Company has formulated a whistle
blower policy which is applicable to the company. The employees can raise his/her concern to the designated person and
necessary action will be taken.
(v) Details of compliance with mandatory requirements and adoption of the non-mandatory
requirements of this clause.
The Company has complied with all the mandatory requirements on Corporate Governance as specifed in Clause 49
of the Listing Agreement with the Stock Exchanges. Compliance reports in the prescribed format has been submitted
to the Stock Exchanges for all the quarters.
As regards the non-mandatory requirements, the following have been adopted:
1. Remuneration Committee
As detailed in the earlier paragraphs, the Company has constituted a Remuneration Committee. The Chairman
of the Remuneration Committee was present at the last Annual General Meeting held on 28th September, 2011.
2. Risk Management Committee
The Board has constituted a “Risk Management Committee” under the Chairmanship of Mr. K. Ramadoss,
Independent Director and the Managing Director as member. The other business heads, departmental heads
are invited to the Committee meetings as and when required. The details of risk assessments and the mitigation
plans appear under the Management Discussion and Analysis Report forming part of the Annual Report.
3. Whistle Blower Policy
The Company has adopted a Whistle Blower Policy with the objective to provide employees, customers and
vendors an avenue to raise concerns, in line with Parrys Sugar Industries Ltd.’s commitment to the highest
possible standards of ethical, moral and legal business conduct and its commitment to open communication
and to provide necessary safeguards for protection of employees from reprisals or victimisation, for whistle
blowing in good faith. The Audit Committee periodically reviews the functioning of the Whistle Blower
Mechanism. The Whistle Blower Policy has also been posted on the Company’s website www.parrysugar.in
4. Shareholder Rights
The quarterly fnancial results are published in leading fnancial newspapers and uploaded on the Company’s
website besides being sent to the Stock Exchanges. The Company has therefore not been sending the half
yearly fnancial results to the shareholders.
5. Other non-mandatory requirements have not been adopted by the Company.
(vi) Corporate Identity Number (CIN)
The Corporate Identity Number of the Company allotted by the Ministry of Corporate Afairs, Government of India is:
L28100KA1986PLC049077.
Parrys Sugar Industries Limited
28
(vii) Compliance certifcate
Certifcate from a Practicing Company Secretary, M/s. V. Sreedharan & Associates confrming compliance with the
conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this
Report.
(viii) Share Capital Audit
A qualifed practicing Company Secretary carried out secretarial audit to reconcile the total admitted capital with
National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Limited (CDSL) and the total
issued and listed capital. The Share Capital audit report confrms that the total issued/paid up capital is in agreement
with the total number of shares in physical form and the total number of dematerialised shares held with NSDL and
CDSL. The audit is carried out every quarter and report thereon is submitted to the Stock Exchanges and is placed
before the Board of Directors.
(ix) Compliance
The Board reviews periodically compliance reports of all laws applicable to the Company, prepared by the Company
as well as steps taken by the Company to rectify instances of non-compliances, if any.
(x) Subsidiary Company
The Company does not have any material non listed Indian Subsidiary Company. The Audit Committee reviews the
fnancial statements of the unlisted subsidiary company. The minutes of the Board meetings as well as the fnancial
statements of the unlisted subsidiary company are placed before the Board of Directors of the Company for their
review.
(xi) Equity shares in the Suspense Account
As per Clause 5A of the Listing Agreement with Stock Exchanges, 141091 equity shares held in physical form which
remain unclaimed has been transferred to the Unclaimed Suspense Account. All corporate benefts that accrue on
these shares shall also be credited to the said suspense account and the voting rights on such shares shall remain
frozen till the rightful owner claims the shares.
(xii) Transfer of Unpaid/Unclaimed amounts to Investor Education and Protection Fund
Pursuant to the provisions of Sections 205A(5) and 205C of the Companies Act, 1956, the Company has transferred
the unpaid or unclaimed dividend for the fnancial year 2003-04 to the Investor Education and Protection Fund
(IEPF) established by the Central Government. No claim shall lie against the Company or IEPF for the amounts so
transferred nor shall any payment be made in respect of such claims.
The information relating to outstanding unclaimed dividend accounts and the dates by which they can be claimed
by the members are given below:
Financial year Date of Declaration Date of Payment Last date for claiming
unpaid dividend
2004-05 August 20, 2005 September 16, 2005 August 19, 2012
2005-06 September 28, 2006 October 27, 2006 September 27, 2013
2006-07 September 25, 2007 October 22, 2007 September 24, 2014
2007-08 September 25, 2008 October 3, 2008 September 25, 2015
The Members are requested to claim their unpaid/unclaimed dividends for the fnancial years 2004-05; 2005-06;
2006-07 and 2007-08 at the earliest. Once the above amounts are transferred to IEPF, no claim of the shareholder
shall lie against the Company or the IEPF.
7. Means of Communication
The Annual Reports, notices and other communications have been sent to each shareholder through post, e-mail. As
per the statutory requirements under Clause 41 of the Listing Agreement with the Stock Exchanges, the quarterly/
annual (consolidated) fnancial results and the segment-wise reports are generally published in “Business Standard”
Annual Report 2011-12
29
and “Samyukta Karnataka” (a regional daily in Kannada language). The fnancial results, shareholding pattern and other
updates on the working of the Company have been posted on the Company’s website: www.parrysugar.in. Besides the
above, the Company also submits, inter-alia, to the Stock Exchanges, the full version of the Annual Report; information
on corporate governance; quarterly/half yearly/yearly fnancial results; quarterly shareholding pattern; details of
appointment/resignation of Directors and Company Secretary and such other reports as may be specifed. In terms of
clause 52 of the Listing Agreement with the Stock Exchanges, the Company also submits the statements, information and
reports on the Corporate Filing and Dissemination System (CFDS) which are available at www.corpfling.co.in
8. General Shareholder Information
I. AGM: Date: July 26, 2012
Time: 10.30 A.M.
Venue: Khincha Hall, Bharatiya Vidya Bhavan, Race Course Road, Bengaluru – 560 001.
II. Financial Calendar Financial year: April to March
The fnancial results are proposed to be declared as per the following tentative schedule:
Particulars Tentative schedule
Financial reporting for the quarter ending June 30, 2012 Before August 14, 2012
Financial reporting for the quarter/half year ending September
30, 2012
Before November 14, 2012
Financial reporting for the quarter/nine months ending
December 31, 2012
Before February 14, 2013
Financial reporting for the quarter/year ending March 31, 2013. In April/May 2013
Annual General Meeting for the year ending March 31, 2013. July/August, 2013
III. Date of Book Closure Wednesday, the July 18, 2012 to Thursday, the July 26, 2012, both days inclusive
IV. Dividend payment date Not Applicable
V. Listing on Stock
Exchanges
Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001.
Tel Nos: (022) 22721233/34 Fax: (022) 22723121
Stock Code: 500162
National Stock Exchange of India Limited
Exchange Plaza, 5th Floor, Plot No. C/1, G. Block
Bandra - Kurla Complex, Bandra (E), Mumbai – 400 051
Tel Nos. (022) 26598100-8114 Fax: (022) 26598237/38
Stock Code: PARRYSUGAR
The Company has paid listing fees for the fnancial year 2012-13 to each of the Stock
Exchanges.
VI. Market Price Data: Monthly, High, Low and trading volume for equity shares
Month
NSE BSE
High Low Volume High Low Volume
` P ` P No. of
shares
` P ` P No. of
shares
July, 2011 142.00 104.15 12,825 139.85 105.00 6,993
August, 2011 106.80 95.00 4,478 108.00 92.20 2,025
September, 2011 102.00 84.30 9,769 101.00 85.00 2,760
October, 2011 89.00 69.50 6,188 95.70 71.05 1,975
November, 2011 106.50 80.00 16,758 99.90 76.55 3,197
December, 2011 115.50 82.00 6,779 112.90 82.70 2,555
January, 2012 110.00 82.05 4,577 111.30 86.00 7,810
February, 2012 95.95 79.00 4,481 101.00 79.80 4,768
March, 2012 85.90 62.50 2,07,463 85.00 65.00 2,02,514
Parrys Sugar Industries Limited
30
VII. Share price performance compared with broad-based indices
Company’s share price performance in comparison with BSE Sensex
Company’s Share Price Sensex
0
20
40
60
80
100
120
Mar-12 Feb-12 Jan-12 Dec-11 Nov-11 Oct-11 Sep-11 Aug-11 Jul-11
15000
15500
16000
16500
17000
17500
18000
18500
VIII. Registrar & Transfer Agents
Main Ofce
Karvy Computershare Pvt. Ltd.
Unit: Parrys Sugar Industries Limited
Plot No.17 to 24, Vittal Rao Nagar
Madhapur, Hyderabad – 500 081
Phone: (040) 23420819 to 24
Fax: (040) 23420814
Email ID: [email protected]
Branch Ofce
Karvy Computershare Pvt. Ltd.
Unit: Parrys Sugar Industries Limited
No.51/2, TKN Complex, Vani Vilas Road
Opp: National College, Basavanagudi
Bengaluru - 560 004
Phone: (080) 41204350
Fax: (080) 26621169
Email Id: [email protected]
IX. Share Transfer System
96.28% of the shares of the Company are in electronic form. Transfer of these shares is done through the depositories
with no involvement of the Company. Regarding transfer of shares held in physical form, the transfer documents
can be lodged with Karvy Computershare Pvt. Ltd. at any of the above mentioned addresses or at the Registered
Ofce of the Company. The share transfers received in physical form are processed within a period of 30 days from
the date of receipt subject to the documents being valid and complete in all respects. The Board of Directors of the
Company has delegated the powers of approving transfers, transmission, issue of duplicate share certifcates etc.,
to the Managing Director, Chief Financial Ofcer and Company Secretary. The quarterly details of shares transferred,
transmitted, dematerialised etc., are placed before the Board. The Company obtains half yearly certifcate from a
Company Secretary in practice in compliance regarding share transfer formalities and submits a copy thereof to the
Stock Exchanges in terms of Clause 47(c) of the Listing Agreement.
Annual Report 2011-12
31
X. Distribution of shareholding of equity shares as on March 31, 2012
Sl. No. Distribution of Holdings No. of Shareholders % of Shareholders Total Shares
1. 1 - 5000 15,764 97.43% 1,337,583
2. 5001 - 10000 292 1.80% 206,132
3. 10001 - 20000 77 0.48% 103,069
4. 20001 - 30000 18 0.11% 44,531
5. 30001 - 40000 10 0.06% 33,708
6. 40001 - 50000 3 0.02% 14,571
7. 50001 - 100000 8 0.05% 57,221
8. 100001 & Above 7 0.04% 18,164,892
Total 16,179 100% 19,961,707
XI. Shareholding Pattern as on March 31, 2012
Sl. No. Description No. of cases Total shares % Equity
1. Promoters 1 12,975,110 65.00
2. Financial Institutions / Banks 3 387,690 1.94
3. Clearing Members 14 393,194 1.97
4. Foreign Institutional Investors 1 2,651 0.01
5. H U F 139 28,845 0.14
6. Bodies Corporate 220 4,477,448 22.43
7. Mutual Funds/UTI 3 868 0.00
8. Non Resident Indians 131 75,940 0.38
9. Overseas Bodies Corporate 1 248 0.00
10. Individuals 15,666 1,619,713 8.12
TOTAL 16,179 19,961,707 100.00
Promoters
Financial Institutions / Banks
Clearing Members
Foreign Institutional Investors
H U F
Bodies Corporate
Non Resident Indians
Individuals
XII. Distribution and Shareholding Pattern of Preference Shareholders as on March 31, 2012.
The entire Preference Shares of the Company are held by M/s E.I.D.-Parry (India) Limited, the Company’s holding
Company, as detailed below:
1,28,31,880, 8% Non-Cumulative Redeemable Preference shares of the face value of ` 11/- each.
10,00,00,000, 8% Cumulative Redeemable Preference shares of the face value of ` 10/- each.
Parrys Sugar Industries Limited
32
XIII. Dematerialisation of shares and liquidity
The process of conversion of shares from physical form to electronic form is known as dematerialisation. For
dematerialising the shares, the Shareholder has to open a demat account with a Depository Participant (DP). The
Shareholder is required to fll in a Demat Request Form and submit the same along with the Share Certifcate (s) to the
DP. The DP allocates a demat request number and forwards the request physically and electronically, through NSDL/
CDSL, to the R&T Agent. On receipt of the demat request both physically and electronically and after verifcation, the
Shares are dematerialised and an electronic credit of shares is given in the account of the shareholder.
The Company’s shares are compulsorily traded in dematerialised form and are available for trading on both the
Depositories in India viz., National Securities Depository Ltd. and Central Depository Services (India) Limited (CDSL).
The Company’s shares are regularly traded on the National Stock Exchange of India Limited and the Bombay Stock
Exchange Ltd. in electronic form.
Mode of Equity Shares held
The Company has registered itself with NSDL and CDSL and the ISIN pertaining to the equity shares of the Company
is: INE353B01021. The modes of holding of the Company’s equity shares as on March 31, 2012 is as under:
Description No. of Shareholders No. of Shares % Equity
Physical 7,006 7,43,874 3.73
NSDL 6,855 1,89,84,787 95.11
CDSL 2,318 2,33,046 1.17
Total: 16,179 1,99,61,707 100.00%
XIV. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely
impact on equity
The Company does not have any outstanding GDRs/ADRs/Warrants or any Convertible instruments.
XV. Prevention of Insider Trading
In accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations 1992, the Company has
instituted a comprehensive Code of Conduct for Prohibition of Insider Trading in the Company’s shares. This code
is applicable to all Directors/ofcers (including Statutory Auditors) / designated employees. The Code ensures
prevention of dealing in Company’s shares by persons having access to unpublished price sensitive information.
XVI. Plant Locations
(i) Sugar Complex- Sugar, Co-generation power, Distillery & Bio-fertilizers Unit at Sankili Village, Regidi
Amadalavalasa Mandal, Srikakulam District 532 440, Andhra Pradesh
(ii) Sugar complex – Sugar, Co-generation Power & Distillery Units at Hullatti Village, Haliyal Mandal, Uttara Kannada
District, Karnataka
(iii) Sugar complex – Sugar & Co-generation Power (leased unit) at Khanpet Village, PO Toragall, Ramdurg Taluk,
Belgaum District, Karnataka.
XVII. Address for Correspondence
Registered ofce Address: Registrar & Share Transfer Agents:
Parrys Sugar Industries Limited Karvy Computershare Pvt. Ltd.
Venus Building, 3rd Floor, (Unit: Parrys Sugar Industries Limited)
1/2 Kalyanamantapa Road Plot Nos.17 to 24, Vittal Rao Nagar
Jakkasandra, Koramangala, Madhapur, Hyderabad – 500 081
Bengaluru – 560 034 Phone: +91 40 44655000
Phone: 080-49006666 Fax: +91 40 23420814
Fax: 080-49006600 Email: [email protected]
XVIII. Corporate Governance Voluntary Guidelines 2009
The Company, in line with its stated policy of being committed to the principles and practices of good corporate
governance, is in compliance with many of these guidelines, as reported in the earlier paragraphs. As regards the
remaining guidelines, the Company is in the process of evaluating the feasibility for implementation progressively.
XIX. Management Discussion and Analysis
The Management Discussion and Analysis forms part of the Annual Report.
Annual Report 2011-12
33
Corporate Governance Compliance Certifcate
Corporate Identity No: L28100KA1986PLC049077
Nominal Capital : ` 175 Crores
To the Members of Parrys Sugar Industries Limited
We have examined all the relevant records of Parrys Sugar Industries Limited for the purpose of certifying compliance of the
conditions of the Corporate Governance under Clause 49 of the Listing Agreement with the Stock Exchanges for the 9 (Nine)
months period from July 1, 2011 to March 31, 2012. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of certifcation.
The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was limited
to the procedure and implementation process adopted by the Company for ensuring the compliance of the conditions of the
corporate governance.
This certifcate is neither an assurance as to the future viability of the Company nor of the efcacy or efectiveness with which
the management has conducted the afairs of the Company.
On the basis of our examination of the records produced and the explanations and information furnished, we certify that the
Company has complied with:
(a) All the mandatory conditions of the said Clause 49 of the Listing Agreement
(b) The following non-mandatory requirements of the said Clause 49:
(i) Clause 2 relating to Remuneration Committee
(ii) Clause 7 relating to Whistle Blower Policy
For V. Sreedharan & Associates
Company Secretaries
V. SREEDHARAN
Bengaluru Partner
April 17, 2012 FCS 2347; CP No. 833
Declaration regarding compliance by Board Members and
Senior Management with the Company’s Code of Conduct
This is to confrm that the Board has laid down a Code of Conduct for all Board Members and Senior Management of the
Company. The Code of Conduct has also been posted on the website of the Company.
It is further confrmed that all Directors and Senior Management personnel of the Company have afrmed compliance with
the Code of Conduct of the Company for the fnancial year (9-months) ended March 31, 2012 as envisaged in Clause 49 of the
Listing Agreement with the Stock Exchanges.
D.Kumaraswamy
Chennai Managing Director
April 24, 2012
Parrys Sugar Industries Limited
34
Auditors’ Report
To the Members of Parrys Sugar Industries Limited
1. We have audited the attached Balance Sheet of Parrys Sugar Industries Limited as at 31st March 2012, the Statement of Proft
and Loss and also the Cash Flow Statement for the nine months period ended on that date annexed thereto. These fnancial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these fnancial
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 fnancial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates
made by the management, as well as evaluating the overall fnancial 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 (as amended) issued by the Central Government in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters
specifed in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that:
a. We have obtained all the information and explanations which to the best 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 been kept by the Company in so far as it appears,
from our examination of those books.
c. The Balance Sheet and the Proft and Loss Account and Cash Flow Statement dealt with by this report, are in
agreement with the books of accounts of this Company;
d. In our opinion, the Balance Sheet, Proft and Loss Account and Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956.
e. On the basis of written representations received from the Directors as on 31st March, 2012 and taken on record by
the Board of Directors, none of the Directors is disqualifed from being appointed as Director in terms of clause (g)
of sub-section (1) of Section 274 of the Act.
f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts
read together with the Signifcant Accounting Policies and the Notes forming part of accounts 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:
i) In the case of the Balance Sheet, of the State of Afairs of the Company as at 31st March, 2012,
ii) In the case of the Statement of Proft and Loss, of the Loss of the Company, for the nine months period
ended on that date.
iii) In the case of Cash Flow Statement, of the Cash Flow for the nine months period ended on that date.
For R.G.N Price & Co.,
Chartered Accountants
Firm Regn. No.: 002785S
H. S. Venkatesh
Chennai Partner
April 24, 2012 Membership No. 026666
Annual Report 2011-12
35
Annexure to the Auditors’ Report
Annexure referred to in Para 3 of our report of even date on the Accounts of
Parrys Sugar Industries Limited, for the nine months period ended 31st March 2012
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation
of fxed assets.
(b) As explained to us, the management has generally carried out the physical verifcation of a portion of the fxed
assets in accordance with their phased programme of physical verifcation, which is considered reasonable having
regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on
such verifcation during the nine months period.
(c) During the nine months period, the Company has not disposed of substantial portion of the fxed assets.
(ii) (a) The Raw material, Stores and Spare Parts, Tools, Work in Progress inventory with the Company have been physically
verifed during the period by the management. In our opinion, the frequency of verifcation is reasonable. In case
of fnished goods, stock verifcation was done at the nine months period end.
(b) The procedures of physical verifcation of Raw material, Stores and Spare Parts, Tools, Work in Progress inventory
and Finished goods followed by the management are generally reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verifcation between the
physical stocks and the book records were not material and have been appropriately dealt in the books.
(iii) The Company has not granted / taken any loans to / from parties covered in the register maintained under Section 301
of the Companies Act, 1956 and hence, Clause No. 4 (iii) of Companies Audit Report Order, 2003, as amended in 2004, is
not applicable.
(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems
commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fxed
assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control system.
(v) According to the information and explanations given to us, we are of the opinion that there are no transactions that need
to be entered in register maintained under Section 301 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58 A and 58 AA of the
Companies Act, 1956 and rules framed thereunder.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to
the Rules made by the Central Government of India, maintenance of cost records has been prescribed under clause (d)
of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records
have been made and maintained. We have not , however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax (VAT),
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income
Tax, Service Tax, Sales Tax(VAT), Customs Duty, Excise Duty and Cess were in arrears, as at 31st March 2012 for a
period of more than six months from the date they became payable.
Parrys Sugar Industries Limited
36
(c) According to the information and explanations given to us, there are no dues of Income Tax, Service Tax, Sales
Tax(VAT), Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute except as
follows:
Sl. No. Statute Nature of Dues Forum where the
dispute is pending
Amount
(` In Lakhs)
Period to which
the matter
pertains
1. Central Excise Act,
1944
Central Excise
Duty
The Additional
Commissioner of Central
Excise and Customs
16.74 2011-12
CENVAT Credit The Additional
Commissioner of Central
Excise & Service Tax
3.42 2008-09
166.10 2011-12
0.96 2008-09
3.86 2009-10
The Assistant
Commissioner of Central
Excise and Customs
0.45 2007-08
6.16 2011-12
The Commissioner of
Central Excise
39.69 2007-08
The Superintendent
of Central Excise and
Customs
0.25 2010-11
Goods cleared
without excise
invoice
The Additional
Commissioner of Central
Excise and Customs
1.50 2008-09
2. Finance Act, 1994
(Service Tax)
GTA on Outward
Freight
Commissioner of Central
Excise & Customs
60.48 2011-12
The Additional
Commissioner of Central
Excise and Customs
1.68 2008-09
The Assistant
Commissioner of Central
Excise and Customs
4.63 2011-12
Non-payment of
Service Tax
The Assistant
Commissioner of Central
Excise and Customs
3.11 2008-09
3. Karnataka Tax on
Entry of Goods Act,
1979
Levy of Entry Tax Deputy Commissioner
of Commercial Taxes
(Audit-1)
18.95 2010-11
4.
Andhra Pradesh
General Sales Tax
Act, 1956
Excess ITC claimed Appellate Deputy
Commissioner
3.27 2010-11
Asst. Commissioner (CT)
LTU
1.85 2010-11
Sales Tax High Court of Andhra
Pradesh
37.01 2004-05
5. Andhra Pradesh
Electricity Duty
Act, 1939
Electricity Duty Government of Andhra
Pradesh – Electrical
Inspectorate
314.63 2004-05 to 2011-12
Annual Report 2011-12
37
(x) The Company has accumulated losses amounting to ` 66.35 crores as at March 31, 2012 and the same has exceeded
50% of net worth. The Company has not incurred cash losses during the nine months period. However the Company has
incurred Cash losses of ` 67.88 Crores in the immediately preceding fnancial period. During the period, the Company
has informed BIFR under Section 23 (1) (a) of Sick Industrial Companies (Special Provisions) Act, 1985 since accumulated
losses exceeded 50% of networth as on 30th June 2011.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in
repayment of dues to bank and fnancial institutions at the Balance Sheet date.
(xii) According to the information furnished, the Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.
(xv) The Company has not given any guarantee for loans taken by others from banks or fnancial institutions during the
period except for Agricultural loans availed by Sugarcane suppliers from Banks, the repayment of which is out of Cane
price payable and in our opinion the terms and conditions of which, are not prima facie prejudicial to the Company.
(xvi) In our opinion, based on our examination of books on an overall basis, the term loans have been applied for the purposes
for which they were obtained.
(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short term basis have been used for long term investment.
(xviii) The Company has not made preferential allotment of shares to parties covered in the register maintained under Section
301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised money by Public Issues and hence Clause 4 (xx) of CARO 2003 is not applicable to the
Company.
(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, and according to the information and explanations given to us, we have
neither come across any instance of fraud on or by the Company noticed or reported during the period nor have we been
informed of any such case by the management, that causes the fnancial statements to be materially misstated.
For R.G.N Price & Co.,
Chartered Accountants
Firm Regn. No.: 002785S
H. S. Venkatesh
Chennai Partner
April 24, 2012 Membership No. 026666
Parrys Sugar Industries Limited
38
Balance Sheet as at March 31, 2012
` in Lakhs
Sl.
No.
Particulars Note
No.
As at
March 31,
2012
As at
June 30, 2011
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital 1 13,407.68 10,907.68
(b) Reserves and Surplus 2 (6,637.46) (6,000.13)
(c) Money received against share warrants - -
2. Share Application Money Pending Allotment - -
3. Non-Current Liabilities
(a) Long Term Borrowings 3 41,922.51 38,128.87
(b) Deferred Tax Liability (Net) 33 - 1,375.60
(c) Other Long Term Liabilities 4 852.96 555.42
(d) Long Term Provisions 5 - -
4. Current Liabilities
(a) Short Term Borrowings 6 18,239.50 23,144.74
(b) Trade Payables 7 9,130.89 2,246.68
(c) Other Current Liabilities 8 9,903.12 3,201.96
(d) Short Term Provisions 9 52.92 68.64
TOTAL 86,872.12 73,629.46
II. Assets
1. Non-Current Assets
(a) Fixed Assets 10
(i) Tangible Assets 51,174.14 48,645.12
(ii) Intangible Assets 247.32 330.63
(iii) Capital Work in Progress 1,123.96 139.81
(iv) Intangible assets under development - -
(b) Non Current Investments 11 1,362.94 1,362.94
(c) Deferred Tax Asset (Net) - -
(d) Long Term Loans & Advances 12 2,928.43 2,311.14
(e) Other Non-Current Assets 13 526.06 582.64
2. Current Assets
(a) Current Investments 14 5.00 5.00
(b) Inventories 15 17,661.09 12,459.31
(c) Trade Receivables 16 4,601.45 1,393.87
(d) Cash and Cash Equivalents 17 1,329.20 875.00
(e) Short Term Loans & Advances 18 5,905.59 5,521.65
(f ) Other Current Assets 19 6.94 2.35
TOTAL 86,872.12 73,629.46
See accompanying notes to the fnancial statements 26-49
The notes referred to above form an integral part of the Balance Sheet
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
39
Statement of Proft and Loss for the period ended March 31, 2012
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
` in Lakhs
Sl.
No.
Particulars Note
No.
9 months
ended
March 31, 2012
15 months
ended
June 30, 2011
I. Revenue from Operations 20 46,739.09 41,784.06
II. Other Income 21 5.75 10.61
III. Total Revenue (I + II) 46,744.84 41,794.67
IV. Expenses:
Cost of materials consumed 37,800.90 34,882.44
Purchases of Stock-in-Trade - -
Changes in Inventories 22 (4,819.32) (3,308.61)
Employee beneft expenses 23 1,961.64 1,974.10
Finance costs 24 5,178.17 7,823.24
Depreciation and amortisation expenses 2,349.96 3,665.80
Other expenses 25 6,286.42 7,211.32
Total Expenses 48,757.77 52,248.29
V. Proft / (Loss) before exceptional and extraordinary items and tax
(III - IV)
(2,012.93) (10,453.62)
VI. Exceptional items - -
VII. Proft / (Loss) before extraordinary items and tax (V - VI) (2,012.93) (10,453.62)
VIII. Extraordinary items - -
IX. Proft / (Loss) before tax (2,012.93) (10,453.62)
X. Tax Expenses:
(1) Current Income Tax - (123.97)
(2) Deferred Income Tax 33 (1,375.60) (862.24)
(3) Total (1,375.60) (986.21)
XI. Proft / (Loss) for the period (IX - X) (637.33) (9,467.41)
XII. Earning Per Equity Share 46
(1) Basic (6.50) (47.44)
(2) Diluted - -
See accompanying notes to the fnancial statements 26-49
The notes referred to above form an integral part of the Statement of Proft and Loss.
Parrys Sugar Industries Limited
40
Notes forming part of the Accounts
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 1
SHARE CAPITAL
AUTHORISED :
5,19,00,000 (2011: 5,19,00,000) Equity Shares of face value of ` 10/- each 5,190.00 5,190.00
2,10,00,000 (2011: 2,10,00,000 ) (8%) Redeemable Non Cumulative Preference Shares
of face value of ` 11/- each
2,310.00 2,310.00
10,00,00,000 (2011: 10,00,00,000 ) (8%) Redeemable Cumulative Preference Shares of
face value of ` 10/- each 10,000.00 10,000.00
17,500.00 17,500.00
ISSUED, SUBSCRIBED AND PAID-UP:
19,961,707 [2011: 19,961,707] Equity Shares of ` 10/- each fully paid up 1,996.17 1,996.17
Of the above:
[13,963,002 Equity shares of ` 10 each per share were issued as fully paid up to
the shareholders’ of erstwhile M/s Varalakshmi Sugars Limited and M/s Varalakshmi
International Limited on their respective amalgamation with the Company, for
consideration otherwise than in cash.]
[12,975,110 Shares [2011: 12,975,110 ] of `10/- each are held by the Holding Company
M/s E.I.D.-Parry (India) Ltd.]
Preference Shares
(i) 12,831,880 8% Redeemable Non Cumulative Preference shares of ` 11/- each 1,411.51 1,411.51
[The above Non Cumulative Preference shares are held by E.I.D.-Parry (India) Ltd.
and were transferred from GMR Holdings Pvt. Ltd. pursuant to the Share Purchase
Agreement dated 25.04.2010. These shares were earlier issued as fully paid up
to M/s. GMR Holdings Private Limited and other shareholders’ of erstwhile M/s.
Varalakshmi International Limited on its amalgamation with the Company, for
consideration otherwise than in cash.]
[The Preference shares are redeemable not later than 8 years from the date of
issue i.e. August 14, 2004 with a call option to the shareholders for redemption
after three years from the date of issue.]
(ii) 100,000,000 8% Redeemable Cumulative Preference shares of ` 10/- each 10,000.00 7,500.00
[The Preference shares are redeemable not later than 8 years from the date of
issue, i.e. June 30, 2011 for 75,000,000 shares and August 30, 2011 for 25,000,000
shares, with a call option to the shareholders for redemption after three years
from the date of issue.]
13,407.68 10,907.68
Annual Report 2011-12
41
Notes forming part of the Accounts
(i) Details of shareholders holding more than 5 percent of equity shares in the company are as follows:
Name of the Shareholder No. of Shares held
As at March 31, 2012 As at June 30, 2011
Nos. % Nos. %
E.I.D.- Parry (India) Limited 12,975,110 65 12,975,110 65
GMR Holdings Private Limited 4,397,295 22 4,397,295 22
(ii) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at June 30, 2011
Nos. ` in Lakhs Nos. ` in Lakhs
Equity Shares
At the beginning of the period 19,961,707 1,996.17 19,961,707 1,996.17
Issued during the period - - - -
Outstanding at the end of the period 19,961,707 1,996.17 19,961,707 1,996.17
Preference Shares
At the beginning of the period 87,831,880 8,911.51 12,831,880 1,411.51
Issued during the period 25,000,000 2,500.00 75,000,000 7,500
Outstanding at the end of the period 112,831,880 11,411.51 87,831,880 8,911.51
NOTE 2
RESERVES AND SURPLUS
As at
July 1, 2011
Additions Deductions As at
March 31, 2012
Capital Reserves
Capital Redemption Reserve 1,175.00 - - 1,175.00
Securities Premium 991.97 - - 991.97
2,166.97 - - 2,166.97
Revenue Reserves
General Reserve 1,570.73 - - 1,570.73
1,570.73 - - 1,570.73
3,737.70 - - 3,737.70
As at
March 2012
As at
June 2011
Proft and Loss Account Balance (9,737.83) (270.42)
Add: Proft (Loss) for the period (637.33) (9,467.41)
(10,375.16) (9,737.83)
Less:
Interim Dividend on Equity Shares -` Nil per share (2011 : ` Nil per share) - -
Proposed Dividend on Equity Shares -Nil (2011 : ` Nil per share) - -
Dividend Distribution Tax - -
Transfer to Debenture Redemption Reserve - -
Transfer to General Reserve - -
(10,375.16) (9,737.83)
Total Reserves and Surplus (6,637.46) (6,000.13)
Parrys Sugar Industries Limited
42
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 3
LONG TERM BORROWINGS (Also Refer Note 28 )
(a) Secured Term Loans from:
- Banks - Rupee Loan 25,950.00 20,500.00
- Government of India - Sugar Development Fund 2,475.35 3,131.71
28,425.35 23,631.71
(b) Unsecured Term Loans from:
- Inter Corporate Loan 13,497.16 14,497.16
41,922.51 38,128.87
NOTE 4
OTHER LONG TERM LIABILITIES
Trade payables 852.96 555.42
852.96 555.42
NOTE 5
LONG-TERM PROVISIONS
Provision for employee benefts - -
- -
NOTE 6
SHORT TERM BORROWINGS
(a) Loans repayable on demand
- Cash Credit from Bank 2,072.83 7,144.74
- Secured Short Term loan from Banks - Rupee loan 4,166.67 10,000.00
- Unsecured Short Term loan from Banks - Rupee loan 10,000.00 4,000.00
- Inter Corporate Loans 2,000.00 2,000.00
18,239.50 23,144.74
(b) Deposits
- Secured Deposits - -
- Unsecured Deposits - From Customers - -
-
18,239.50 23,144.74
Notes forming part of the Accounts
Annual Report 2011-12
43
Note 6 (a)
Details of Loans and terms of repayment
Lender Name Refer Note As at
March 31,
2012
As at
June 30, 2011
Terms of Repayment
(as at March 31, 2012)
SBI Term Loan 27 (i) 3,000.00 - Repayable during next
7 years
Axis Bank Loan 27 (ii) 20,500.00 20,500.00 Repayable during next
7 years
ICICI Bank Loan 27 (iii) 2,500.00 - Repayable during next
6 years
AB Central Excise Loan - 191.02 Not Applicable
SBM Central Excise Loan - 93.07 Not Applicable
SDF Term Loan I - Sankili Unit - 76.61 Not Applicable
SDF Term Loan II - Sankili Unit 27 (iv) 926.86 1,158.57 Repayable during next
4 years
Cane Development Loan - Sankili Unit 27 (iv) 112.50 112.50 Repayable during next
2 years
SDF - Cogen Loan - Haliyal Unit 27 (v) 1,783.14 1,854.32 Repayable during next
5 years
SDF - Raw Sugar Processing Loan - Haliyal Unit 27 (v) 15.00 22.50 Repayable during next
2 years
SDF Cane Development Loan - Haliyal Unit 27 (v) 75.00 75.00 Repayable during next
2 years
SDF Cane Development Loan - Ramdurg Unit 27 (vi) 75.00 75.00 Repayable during next
2 years
Andhra Bank Short Term Loan - 2,500.00 Not Applicable
Bank of India Short Term Loan 27 (vii) 4,166.67 5,000.00 Repayable during next
5 months
Axis Bank Short Term Loan - 2,500.00 Not Applicable
SBI Cash Credit 27 (viii) 2,072.83 7,144.74 On Demand
Indian Bank Short Term Loan - 4,000.00 Not Applicable
L&T Finance Ltd. Short Term Loan 28 (i) 2,000.00 2000.00 Repayable during next
3 months
Dena Bank Short Term Loan 28 (ii) 5,000.00 - Repayable during next
9 months
Axis Bank Short Term Loan 28 (iii) 5,000.00 - Repayable during next
6 months
EID Parry (India) Ltd. Loans 28 (iv) 13,497.16 14,497.16 Repayable during next
6 months
Total 60,724.16 61,800.47
Notes forming part of the Accounts
Parrys Sugar Industries Limited
44
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 7
TRADE PAYABLES
(a) Dues to Micro Enterprises and Medium Enterprises - -
(Refer Note 34)
(b) Other Trade Payables 9,130.89 2,246.68
9,130.89 2,246.68
NOTE 8
OTHER CURRENT LIABILITIES
(a) Current maturities of long-term debt (Also Refer Note 28 )
- Banks - Rupee Loan 50.00 284.08
- Government of India - Sugar Development Fund 512.15 242.79
- Financial Institutions - -
(b) Interest accrued but not due on borrowings 1,970.44 1,115.59
(c) Unpaid dividends 46.57 56.86
(d) Other payables
- Other Misc Liabilities 6,401.28 891.74
- Advances and Deposits from Customers/Others 922.68 610.90
- Due to Directors - -
9,903.12 3,201.96
NOTE 9
SHORT-TERM PROVISIONS
Provision for employee benefts 52.92 68.64
52.92 68.64
NOTE 10
FIXED ASSETS ` in Lakhs
GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK
Cost/Value
As at 01-07-2011
Additions Deletions Cost/Value
As at 31-03-2012
As at
01-07-2011
For
the year
Deletions As at
31-03-2012
As at
31-03-2012
As at
30-06-2011
Tangible Assets
Land 2,440.43 31.84 - 2,472.27 - - - - 2,472.27 2,440.43
Buildings 9,779.62 381.79 - 10,161.41 1,176.92 220.16 - 1,397.08 8,764.33 8,602.70
Plant and Equipment 46,560.11 4,309.10 - 50,869.21 10,586.34 1,987.81 - 12,574.15 38,295.06 35,973.77
Furniture and Fixtures 2,355.76 17.41 - 2,373.17 966.19 25.48 - 991.67 1,381.50 1,389.57
Vehicles 414.70 65.23 15.34 464.59 176.05 33.23 5.67 203.61 260.98 238.65
61,550.62 4,805.37 15.34 66,340.65 12,905.50 2,266.68 5.67 15,166.51 51,174.14 48,645.12
Intangible Assets
SAP & CMS Project 666.49 - - 666.49 335.86 83.31 - 419.17 247.32 330.63
62,217.11 4,805.37 15.34 67,007.14 13,241.36 2,349.99 5.67 15,585.68 51,421.46 48,975.75
Previous Year 59,115.65 3,159.44 57.98 62,217.11 9,626.79 3,665.80 51.23 13,241.36
Capital Work-in-Progress 1,123.96 139.81
Intangible assets under development - -
52,545.42 49,115.56
Notes forming part of the Accounts
Annual Report 2011-12
45
NOTE 11
NON-CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at July 1,
2011
Acquisitions Sales As at March
31, 2012
As at July
1, 2011
Acquisitions Sales As at March
31, 2012
I. Quoted Investments
Total Quoted Investments - - - - - - - - -
Market Value of Quoted Investments - - - - - - - - -
II. Unquoted Investments
(a) Trade Investments
- Investments in Equity Instruments
Subsidiary Company
Alagawadi Bireshwar Sugars Private Limited 100 102,222 - - 102,222 1,362.94 - - 1,362.94
Total Unquoted Investments 1,362.94 - - 1,362.94
Total Non-Current Investments 1,362.94 - - 1,362.94
Aggregate provision for diminution in value
of investments - - - -
Total Non-Current Investments 1,362.94 - - 1,362.94
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 12
LONG-TERM LOANS AND ADVANCES
Unsecured and considered good unless otherwise stated :
(a) Capital Advances 775.88 -
(b) Security Deposits 585.57 606.19
(c) Loans and advances to related parties 1,322.99 1,312.65
(d) Other loans and advances
- Advance Tax less Provision for Tax 70.20 68.68
- Balance with Customs and Central Excise Authorities - -
- MAT Credit Entitlement 125.35 125.35
- Advance recoverable in cash or in kind or for value to be received
? Unsecured and Considered Good 48.44 198.27
? Considered Doubtful - -
2,928.43 2,311.14
NOTE 13
OTHER NON-CURRENT ASSETS
(a) Long Term Trade Receivables - -
- Secured, considered good - -
- Unsecured considered good 526.06 582.64
- Doubtful - -
(b) Others - -
526.06 582.64
Notes forming part of the Accounts
Parrys Sugar Industries Limited
46
NOTE 14
CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at July 1,
2011
Acquisitions Sales As at March
31, 2012
As at July 1,
2011
Acquisitions Sales As at March
31, 2012
I. Quoted Investments
Other Investments
Metkore Alloys & Industries Ltd.
(formerly Cronimet Alloys India
Ltd .)
2 250,000 - - 250,000 5.00 - - 5.00
Total Quoted Investments 5.00 - - 5.00
Market Value of Quoted
Investments 62.13 - - 38.00
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 15
INVENTORIES
(a) Raw materials 129.87 101.82
(b) Work-in-progress 739.26 149.58
(c) Finished goods 14,783.17 10,658.23
(d) Finished goods in Transit 6.63 15.32
(e) By Products 690.34 576.95
(f ) Stock-in-trade (in respect of goods acquired for trading) - -
(g) Stores and spares 1,311.82 957.41
17,661.09 12,459.31
NOTE 16
TRADE RECEIVABLES (UNSECURED)
Debts outstanding for a period exceeding six months:
(a) Considered good 2,878.58 529.19
(b) Considered doubtful - -
2,878.58 529.19
Other Debts:
Considered good 1,722.87 864.68
4,601.45 1,393.87
Notes forming part of the Accounts
Annual Report 2011-12
47
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 17
CASH AND CASH EQUIVALENTS
(a) Balances with banks
In Current account 259.07 795.30
In Dividend account 46.57 56.86
In Margin Money accounts towards Bank Guarantee 18.68 18.68
In Deposit account
? More than 12 months of maturity - -
? Others 1,000.00 -
(b) Cheques, drafts on hand - -
(c) Cash on hand 4.88 4.16
1,329.20 875.00
NOTE 18
SHORT-TERM LOANS AND ADVANCES
(a) Capital Advances - -
(b) Security Deposits 29.79 -
(c) Loans and advances to related parties - -
(d) Other loans and advances
- Balance with Customs and Central Excise Authorities 2,452.19 2,580.81
- Advance recoverable in cash or in kind or for value to be received
? Unsecured and Considered Good 3,423.61 2,940.84
? Considered Doubtful 622.36 32.44
? Less: Provision for Doubtful Advances (622.36) (32.44)
5,905.59 5,521.65
NOTE 19
OTHER CURRENT ASSETS
Income Accrued on Deposits etc. 6.94 2.35
6.94 2.35
Notes forming part of the Accounts
Parrys Sugar Industries Limited
48
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 20
REVENUE FROM OPERATIONS
(a) Sales of Products 47,153.66 42,984.90
Less : Excise Duty 1,701.08 1,603.60
45,452.58 41,381.30
(b) Sale of services
(c) Other operating revenues - -
- Liabilities/ Provisions no longer required written back 9.27 24.44
- Other income from Power - 60.30
- Insurance Claims Received 353.25 16.55
- Scrap Sales 200.97 61.04
- Sundry Income 723.02 240.43
46,739.09 41,784.06
NOTE 21
OTHER INCOME
Proft on sale of Fixed Assets - -
Proft on sale of Investments - -
Dividend Income - -
Interest on Deposits, etc. 5.75 10.61
5.75 10.61
NOTE 22
CHANGES IN INVENTORIES
(Increase)/Decrease in Stocks
Opening Stock:
Work-in-process 149.58 235.77
Finished Goods 11,250.50 7,855.70
11,400.08 8,091.47
Closing Stock:
Work-in-process 739.26 149.58
Finished Goods 15,480.14 11,250.50
16,219.40 11,400.08
(4,819.32) (3,308.61)
NOTE 23
EMPLOYEE BENEFIT EXPENSES (Refer Note 36)
Salaries, Wages and Bonus 1,446.03 1,589.53
Deputed Employee Cost 271.10 166.45
Contribution to Provident and Other Funds 98.84 106.82
Expenses on Employee Stock Option Scheme (ESOP) - -
Workmen and Staf Welfare Expenses 145.67 111.30
1,961.64 1,974.10
Notes forming part of the Accounts
Annual Report 2011-12
49
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 24
FINANCE COST
(a) Interest expense;
- Debentures - -
- Other Fixed Loans 4351.71 6,168.64
- Others 580.30 997.50
(b) Other borrowing costs 246.16 657.10
(c) Net gain/loss on foreign currency transactions and translation - -
5,178.17 7,823.24
NOTE 25
OTHER EXPENSES
(a) Consumption of Stores, Spares and Consumables 1,312.03 1,373.07
(b) Power and Fuel 475.15 662.29
(c) Rent 22.58 57.41
(d) Repairs and Maintenance
- Buildings 50.12 60.99
- Plant and Machinery 1,258.30 1,231.81
- Others 170.22 390.57
1,478.64 1,683.37
(e) Insurance 95.81 116.90
(f ) Rates and Taxes 74.93 167.87
(g) License Fee 64.14 220.57
(h) Material Handling Expenses 311.37 312.16
(i) Other Manpower Cost 257.67 629.64
(j) Distribution Expenses 15.45 15.16
(k) Travelling and Conveyance 186.10 304.54
(l) Communication Expenses 40.31 64.99
(m) Operation Lease Rentals 560.57 912.51
Printing and Stationery 22.46 24.46
(o) Auditors’ Remuneration 12.62 20.00
(p) Directors’ Remuneration 71.30 126.74
(q) Directors’ Fees and Commission 5.35 7.95
(r) Sales Promotion and Publicity - -
(s) Fixed Assets scrapped 2.71 2.25
(t) Professional Charges 99.54 101.76
(u) Provision for Doubtful Debts and Advances 589.92 -
(v) Bad Debts/Advances written of - -
(w) General Manufacturing, Selling and Administration Expenses 587.77 407.68
6,286.42 7,211.32
Notes forming part of the Accounts
Parrys Sugar Industries Limited
50
26. Signifcant Accounting Policies and Notes on Accounts
26.1 Basis of preparation of fnancial statements
The fnancial statements of the Company are prepared to comply in all material aspects with the applicable accounting
principles in India, the Accounting Standards notifed under Sub-section (3C) of Section 211 of the Companies Act,
1956 (hereinafter referred as “the Act”) and other relevant provisions of the Act.
26.2 Use of Estimates
The preparation of fnancial statements requires the management to make estimates and assumptions that afect
the reported balances of assets and liabilities on the date of the fnancial statements and reported amounts of
income and expenses during the reporting period. Management believes that the estimates used in the preparation
of fnancial statements are prudent and reasonable. Actual results could difer from these estimates. Any revision to
accounting estimates is recognized prospectively in the current and future periods.
26.3 Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent improvements thereto including taxes, duties, freight
and other incidental expenses for bringing the asset concerned to its working condition for its intended use,
less accumulated depreciation and impairment loss. Interest on borrowings attributable to qualifying assets are
capitalised and included in the cost of fxed assets as appropriate. Intangible assets are stated at the consideration
paid for acquisition less accumulated amortisation.
26.4 Leases
Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are
classifed as fnance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or the
present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental
paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
Assets acquired as leases, where a signifcant portion of the risk and rewards of ownership are retained by the lessor,
are classifed as operating leases. Lease rentals are charged to the Proft and Loss Account on accrual basis as per
terms of the lease.
26.5 Borrowing costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are charged to revenue.
26.6 Depreciation and Amortisation
Depreciation is provided on straight line method, pro rata to the period of use, at the rates specifed in Schedule XIV
of the Act or the rates based on the useful lives of the assets as estimated by the management, whichever is higher.
The rates based on the useful lives of the assets in the following categories are estimated to be higher than those
specifed in Schedule XIV of the Act:
Electrical Equipment 5.38%
Telephone Equipment 6.33%
Computer Software 16.67%
Leasehold assets are amortized at rate based on the remaining period of lease or the rate specifed in Schedule XIV
of the Act, whichever is higher.
Annual Report 2011-12
51
All individual assets costing ` 5,000/- or less are fully depreciated in the year of purchase.
26.7 Investments
Long term investments are valued at cost. Provision is made to recognize a decline, other than temporary, in the
value of long term investments. Current Investments are stated at lower of cost or market value.
26.8 Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realizable Value. The costs are, in general, determined
on Weighted Average Basis.
b. Finished goods and Work-in-process: Finished goods are valued at lower of cost or Net Realizable Value. Cost
includes direct materials, Labour and a proportion of manufacturing overheads based on normal operating
capacity.
Work In process is valued at lower of cost or Net Realizable Value. The cost is determined up to the estimated
stage of process and includes direct materials, Labour and a proportion of manufacturing overheads based on
normal operating parameters.
c. By Products: At estimated realizable value.
d. Stores and Spares: At lower of cost or Net Realizable Value. The costs are, in general, determined on weighted
average basis.
26.9 Revenue Recognition
Revenue is recognized when the signifcant risks and rewards of ownership of goods have been passed on to the
buyer. Sale of goods is exclusive of sales tax and captive consumption of Molasses, Power and Baggasse. Dividend
Income is recognized in the year in which the right to receive the payment is established.
Income from investments is recognized in the year in which it is accrued and stated at gross of tax deducted at
source.
26.10 Foreign Currency Transactions
All foreign currency transactions are accounted for at the exchange rates prevailing on the date of such transactions.
Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles:
Exchange diferences arising on reporting of long term foreign currency monetary items at rates diferent from those
at which they were initially recorded during the period or reported in previous fnancial statements, are accounted
as below:
(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of
the asset and are depreciated over the balance life of the asset; and
(b) In other cases, the said exchange diferences are accumulated in a ‘Foreign Currency Monetary Items Translation
Diference Account’ and amortized over the balance period of such long term asset/liability but not beyond
March 31, 2020.
All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the
year end and all exchange gains/losses arising there from are adjusted to the Proft and Loss Account, except those
covered by forward contracted rates where the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of the contract.
Exchange diferences on forward contracts are recognised in the Proft and Loss Account in the reporting period in
which the exchange rates change. Any proft or loss arising on cancellation or renewal of such forward contracts is
recognised as income or expense for the year.
Parrys Sugar Industries Limited
52
For forward exchange contracts and other derivatives that are not covered by Accounting Standard (AS) -11 ‘The
Efects of Changes in Foreign Exchange Rates’, the Company follows the guidance in the announcement of the
Institute of Chartered Accountants of India (ICAI) dated March 29, 2008, whereby for each category of derivatives,
the Company records any net mark-to-market losses. Net mark-to-market gains are not recorded for such derivatives.
26.11 Employee Benefts
a. Short Term Employee Benefts
Undiscounted amount of short term employee benefts expected to be paid in exchange for the services
rendered by employees is recognised during the period when the employee renders the services. These benefts
include compensated absences such as paid annual leave and performance incentives.
b. Defned Contribution Plans
These comprise of contributions to employees’ provident fund with the government and certain state plans
like Employees’ State Insurance and Employees’ Pension Scheme. The Company’s payments to the defned
contribution plans are recognized as an expense during the period in which the employees perform the services
that the payment covers.
c. Defned Beneft Plans
Gratuity for employees is covered under a scheme of Life Insurance Corporation of India and contributions in
respect of such scheme are recognized in the Proft and Loss Account. The liability as at the Balance Sheet date is
provided for based on the actuarial valuation, based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the
efect of changes in the actuarial assumptions and are recognised immediately in the Proft and Loss Account
as income or expense.
d. Other Long Term Employee Benefts
Other Long term employee benefts comprise of Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee renders the related services are recognised
as a liability at the present value of the defned beneft obligation at the balance sheet date based on actuarial
valuation carried out at each balance sheet date.
26.12 Earnings per Share
The earnings considered in ascertaining the Company’s Earnings Per Share (EPS) comprise of the net proft after tax
less dividend (including dividend distribution tax) on preference shares. The number of shares used for computing
the basic EPS is the weighted average number of shares outstanding during the year.
26.13 Taxes on Income
Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax
payable in respect of taxable income for the period.
Deferred tax is recognised on timing diferences between the accounting income and the taxable income for the
year and quantifed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/virtual certainty that
sufcient future taxable income will be available against which such deferred tax asset can be realised.
26.14 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable
that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
Annual Report 2011-12
53
made. Provisions, other than employee benefts, are not discounted to their present value and are determined based
on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current management estimates.
26.15 Contingencies
Obligations which are material and whose future outcome cannot be ascertained with reasonable certainty are
treated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts.
26.16 Impairment of Assets
Impairment loss is provided to the extent carrying amount of assets exceeds their recoverable amount. Recoverable
amount is higher of asset’s selling price and its value in use. Value in use is the present value of estimated future cash
fows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable,
willing parties, less the costs of disposal.
26.17 Expenditure
Expenses are net of taxes recoverable, where applicable.
27. Secured Loans
(i) Term Loan & Short Term (Bridge) Loan extended by State Bank of India is primarily secured by Pari-passu frst
charge on fxed Assets of the Company and collaterally secured by second charge on the current assets of the
Company.
(ii) Term Loan extended by Axis Bank Ltd. is primarily secured by Pari-passu frst charge on fxed Assets of the
Haliyal & Sankili Units.
(iii) Term Loan extended by ICICI Bank Ltd. is secured by Pari-passu second charge on fxed Assets of the Company.
The process of charge creation in favour of ICICI Bank Ltd. is pending.
(iv) Loans extended by Sugar Development Fund, Government of India (SDF) for Modernisation/Expansion/Cane
Development at the Sankili Unit is secured by Pari-passu frst charge on movable & immovable properties of
Sankili Unit.
(v) Loans extended by SDF for Congeneration Project/Raw-sugar processing/Cane development at the Haliyal Unit
are secured by Pari-passu frst charge on the movable & immovable properties of Haliyal Unit.
(vi) Loans extended by SDF for Cane development at the Ramdurg Unit is secured by Bank Guarantee.
(vii) Short term Loan extended by Bank of India is secured by Pari-passu frst charge on fxed Assets of the Haliyal
Unit.
(viii) Cash Credit facility extended by State Bank of India is secured by way of hypothecation of entire current assets
of the Company and further secured by second charge on Company’s fxed assets.
The above loans extended by SDF & Banks carry interest rates ranging from 4.00% p.a. to 13.50% p.a. The loans
extended by banks are linked to their Base Rate.
28. Unsecured Loans
(i) Loan extended by L & T Finance Ltd. is unsecured in nature.
(ii) Loan extended by Dena Bank is unsecured in nature
(iii) Loan extended by Axis Bank Ltd. is unsecured in nature.
Parrys Sugar Industries Limited
54
(iv) Loans extended by the Holding Company, EID Parry (India) Ltd. are unsecured in nature.
These loans cannot be withdrawn during the tenancy of the loans extended by SBI, Axis Bank Ltd. & ICICI Bank
Ltd. and hence Classifed as Long Term Borrowings.
The above loans extended by EID Parry (India) Ltd. & Banks carries interest rates ranging from 9.50% p.a. to 13.50%
p.a. The loans extended by banks are linked to their Base Rate.
29. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
of ` 1819.03 Lakhs (2011: ` 1,587.95 Lakhs).
30. Contingent Liabilities not provided for on account of :
` in Lakhs
Particulars 2012 2011
a) Bank Guarantees 254.00 247.42
b) Letter of Credit - -
c) Corporate Guarantees given by the Company to banks in respect of crop
loans to farmers and H&T loan
4599.07 1291.70
d) Arrears of fxed cumulative dividends of Preference shares 1.64 -
e) Claims made by Government Departments against the Company not
acknowledged as debts:
i. Excise claims under appeal 309.04 263.79
ii. Sales tax & Commercial taxes appeal under various states 61.08 79.76
iii. Other claims - -
f ) Preference Dividend attributable to Cumulative Preference Shares 568.31 1.64
31. a) The Ministry of Corporate Afairs, Government of India has vide its Notifcation No. GSR 225(E) dated March
31, 2009 has announced Companies Accounting Standards (Amendment) Rules 2009 prescribing changes to
Accounting Standard 11 on ‘The Efects of Changes in Foreign Exchange Rates’ extended till 31-03-2020.
The Company has, pursuant to the adoption of such principles of Companies (Accounting Standards)
Amendment Rules 2009, exercised the option of recognizing the exchange diferences arising on reporting
of foreign currency monetary items at rates diferent from those at which they were recorded earlier, in the
original cost of such depreciable fxed assets in so far such exchange diferences arose on foreign currency
monetary items relating to the acquisition of a depreciable asset.
Exchange diferences aggregating to ` NIL arising during the year ended March 31, 2012 (2011: ` 0.54 Lakhs)
have been adjusted to the cost of the depreciable assets.
b)
Particulars 2012 2011
Borrowing Cost Capitalised on fxed assets/CWIP 294.34 113.08
32. Operating Leases
i. The Company has entered in to a non-cancellable operating lease agreement with Shri Dhanalakshmi Sahakari
Sakkare Karkhane Niyamit, Ramdurg for the lease of sugar factory together with the specifed assets on Built,
Own, Operate and Transfer basis (BOOT) for a period of 25 years. Lease rentals of ` 560.57 Lakhs (2011: ` 912.51
Lakhs) in respect of the obligation under such lease agreement have been recognized in the Proft and Loss
Account.
Annual Report 2011-12
55
Future obligations of lease rentals applicable to the above lease agreement aggregate to `14,238.40 Lakhs (2011:
` 14,798.97 Lakhs) and are due:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 769.85 753.04
Later than one year and not later than fve years 3,317.37 3,244.91
Later than fve years 10,151.18 10,801.02
Total 14,238.40 14,798.97
ii. The Company has certain operating leases for ofce facilities and residential premises under a cancellable
operating lease agreement. Such agreements are generally with the option of renewal against increased rent
and premature termination of agreement. The charge on account of lease rentals under such agreements to the
Proft and Loss Account for the year is `22.58 Lakhs (2011: ` 57.41 Lakhs). The future obligations of lease rentals
applicable are as under:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 25.14 24.37
33. Deferred Tax (` In Lakhs)
The major components of the deferred tax assets and liabilities on account of timing diferences are as follows:
Deferred Tax Liability/(Asset)
2011-12 2010-11
Deferred Tax Liability
Diference between the written down value of assets as per books of account and
Income Tax Act.
1,375.60 4,475.92
Deferred Tax Asset
Unabsorbed Depreciation (398.50) (3070.46)
Business Loss (977.10) -
Others - (29.86)
Net Deferred Tax Liability – 1,375.60
34. There are no suppliers falling under the Micro, Small and Medium Enterprise registered with the company.
35. With respect to receivables from Transmission Corporation of Andhra Pradesh Limited (APTRANSCO) included under
Sundry Debtors:
a) Amounts aggregating to `777.78 Lakhs [2011:` 715.87 Lakhs] relate to price diference matter in dispute
where the Company has appealed before the Apellate Tribunal for Electricity (ATE) against an order of State
Commission. As the matters are pending before the ATE, the Company, as a matter of prudence, has postponed
the recognition of such amounts as income and a corresponding credit is retained as liability in the books of
account and adjusted against Sundry Debtors as at March 31, 2012.
b) Amounts aggregating to `526.06 Lakhs [2011: ` 582.64 Lakhs] relate to other matters in dispute where the
Company has appealed before the ATE against the orders of State Commission. As the matters are pending
before the ATE, no adjustment has been made in respect of such dues recognised as receivable as at March 31,
2012.
Parrys Sugar Industries Limited
56
36. (a) The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the
Balance Sheet and Proft and Loss Account.
(` in Lakhs)
Particulars Gratuity (Funded)
2011-12 2010-11 2009-10 2008-09
Present Value of obligations at the beginning of
the year
94.54 104.65 84.09 62.03
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Benefts Settled (20.61) (21.60) (16.11) (2.59)
Actuarial loss/(gain) (0.35) (14.24) (0.03) (14.22)
Present Value of obligations at the end of
the period
97.67 94.54 104.65 84.09
Changes in the fair value of planned assets
Fair value of plan assets at beginning of year 136.55 67.38 76.97 41.44
Expected return on plan assets 8.05 8.76 5.51 4.42
Contributions - 79.75 - 30.12
Benefts Paid (20.61) (21.60) (16.11) (2.59)
Actuarial gain/(Loss) on plan assets (0.79) 2.26 1.01 3.58
Fair Value of plan assets at the end of the
year
123.20 136.55 67.38 76.97
Amounts recognized in the Balance Sheet
Projected beneft obligation at the end of the
period
97.67 94.54 104.65 84.09
Fair value of plan assets at end of the period 123.20 136.55 67.38 76.97
Funded status of the plans – asset/(Liability)
recognised in the balance sheet
25.53 42.01 (37.27) (7.12)
Cost for the period
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Expected return on plan assets (8.05) (8.76) (5.51) (4.42)
Net actuarial (gain)/loss recognised in the period (20.61) (11.98) (1.32) (17.81)
Net Cost (4.57) 4.99 29.87 16.64
Assumptions
Discount rate 8.50% 8% 8% 7%
Expected return on assets 8.50% 8% 8% 8%
Rate of Compensation increase 6% 6% 6% 6%
Attrition rate 5% 5% 5% 5%
Retirement expectancy (in years) 60 60 60 58
Expected average remaining service (in Years) 23.20 23.27 23.36 22.12
Mortality rates LIC 1994-
96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
Actual return on plan assets (` In Lakhs) 7.26 9.71 6.52 8.00
Annual Report 2011-12
57
Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected
rate of return on fund assets has been arrived at. Assumed rate of return on assets is expected to vary from year
to year refecting the returns on matching government bonds.
The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken
on account of infation, seniority, promotion and other relevant factors such as supply and demand in the
employment market.
As per the best estimate of the management, contribution of `5.00 lakhs is expected to be paid to the plan
during the year ending March 31, 2013.
(b) Provision made during the year for other long term employee benefts based on the actuarial valuation report
amounted to `NIL (2011: ` 41.54 Lakhs).
(c) During the period, the Company has recognised the following amounts in the Proft and Loss Account, which
are included in Contribution to Provident and Other Funds.
(` in Lakhs)
Particulars 2012 2011
Provident Fund and Employees’ Pension Scheme 98.84 96.40
37. Auditors’ Remuneration and Expenses:
(` in Lakhs)
2011-12 2010-11
(i) Audit Fees 12.50 14.00
(ii) Tax Audit - -
(iii) Company Law matters - -
(iv) Management Services - -
(v) Fees for other services - 6.00
(vi) Reimbursement of out of pocket expenses 0.12 -
Total 12.62 20.00
38. Particulars in respect of Finished Goods Stock
Classes of
Goods
Unit Opening Stock Closing Stock
2011-12 2010-11 2011-12 2010-11
Qty. Value
` Lakhs
Qty. Value
` Lakhs
Qty. Value
` Lakhs
Qty. Value
` Lakhs
Sugar Quintals 437,855 10,096.61 281,732 6,248.63 620,550 13,995.69 437,855 10,096.61
Molasses MT 19,347 560.95 22,010 1,070.61 20,828 545.26 19,347 560.95
Work-in-process Quintals 7,713 173.77 10,008 226.69 34,214 728.00 7,713 173.77
WIP-Molasses MT 30 0.80 19 9.08 1,628 33.34 30 0.80
Bagasse/Bio-mass MT 2,239 16.00 2,393 15.55 26,260 184.83 2,239 16.00
Distillery:
Rectifed Spirit Litres 414,723 98.81 708,860 198.72 393,092 90.71 414,723 98.81
Impure Spirit Litres 32,630 38.10 264,978 55.78 349,450 62.90 32,630 38.10
ENA Litres 1,107,172 275.34 242,941 85.49 1,850,467 427.16 1,107,172 275.34
Ethanol Litres 594,093 125.97 535,344 180.92 750,353 151.51 594,093 125.97
Work in progress Litres - - - - - - - -
11,386.35 8,091.47 16,219.40 11,386.35
Parrys Sugar Industries Limited
58
39. Particulars in respect of Finished Goods – Sales
Classes of Goods Unit Sales (including Excise Duty)
2011-12 2010-11
Qty. Value ` Lakhs Qty. Value ` Lakhs
Sugar Quintals 1,589,519 40,013.30 1,241,396 32,768.23
Molasses* MT 57,220 698.50 65,876 1,298.94
Cogeneration - Power# Units 79,408,742 2,343.24 90,172,760 3,179.31
Distillery **
Rectifed Spirit Litres 3,628,100 1,073.95 3,731,100 859.27
ENA Litres 4,703,000 1,564.59 7,800,000 2,467.27
Impure Spirit Litres 548,600 38.46 539,250 108.07
Ethanol Litres 3,537,000 1,096.93 6,343,600 2,156.75
Others 324.69 147.06
47,153.66 42,984.90
* Includes inter division transfers of 40,833 MT (2011: 31,571 MT) at Nil value.
# Net of captive consumption
** Excludes quantities used in the processing of other distillery products mentioned above.
40. Analysis of Raw Materials Consumed
Description Unit 2011-12 2010-11
Qty. Value ` Lakhs Qty. Value ` Lakhs
Sugarcane MT 1,460,989 37,280.37 1,295,502 30,871.88
Coal MT 1,146 47.98 55,095 2,046.51
Others 472.55 1,964.05
37,800.90 34,882.44
(` In Lakhs)
2011-12 2010-11
41. Value of Imports on C.I.F Basis
Capital Goods - 12.50
Spares 9.82 -
9.82 12.50
42. Expenditure in Foreign Currency
Travel 0.69 1.25
Professional Fee - 0.68
0.69 1.93
43. Earnings in Foreign Currency
Sale of Carbon Credit Emission Reduction 70.13 -
70.13 -
44. The Closing Stock of Finished goods has been valued net of Excise duty payable amounting to `659.83 Lakhs.
Annual Report 2011-12
59
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Parrys Sugar Industries Limited
60
46. Earnings per Share
The computation of earnings per share is set out below:
Particulars 2012 2011
Nominal Value of Equity Shares (`) 10 10
Net Proft/(Loss) after Tax (` Lakhs) (637.33) (9,467.41)
Less : Preference Dividend attributable to Preference Shares (including
corporate tax thereon) (` Lakhs)
660.49 1.64
Net Proft/(Loss) attributable to the Equity Shareholders (` Lakhs) (1,297.82) (9,469.05)
Shares:
Weighted average number of Equity Shares of ` 10 each outstanding during the year 19,961,707 19,961,707
Basic and diluted Earnings/(Loss) – ` Per Share (6.50) (47.44)
47. Related Party Disclosures
i. Names of the related parties and description of relationship.
Relationship Name of the Parties
Holding Company EID Parry (India) Limited
Subsidiary Company Alagawadi Bireshwar Sugars Private Limited (ABSPL)
Fellow Subsidiaries Coromandel International Ltd.
Parry Chemicals Ltd.
CFL Mauritius Limited
Coromandel Brasil Limitada – Partnership.
Sabero Organics Gujarat Limited
Sabero Europe BV
Sabero Australia Pty. Ltd.
Sabero Organics America SA
Sabero Argentina SA
Sadashiva Sugars Ltd.
Parry America Inc.
Parrys Investments Limited
Parrys Sugar Limited
Parry Infrastructure Company Private Limited
Parry Phytoremedies Private Limited
US Nutraceuticals Inc.
Parry Agrochem Exports Limited
Valensa Europe AG
La Belle Botanics LLC
Key Management Personnel Mr. D. Kumaraswamy
Annual Report 2011-12
61
ii. Summary of transactions with the above related parties are as follows:
Nature of the Transaction 2012 2011
Purchase of Machinery
i. Holding Company
EID Parry (India) Limited - 965.42
Purchase of Goods/Services
i. Holding Company
EID Parry (India) Limited 456.61 448.61
ii. Fellow Subsidiary
Coromandel International Limited 15.75 15.72
Sadashiva Sugars Limited 117.64 97.16
Interest on Unsecured Loan
i. Holding Company
EID Parry (India) Limited 908.45 1,029.87
ii. Fellow Subsidiary
Coromandel International Limited 16.38 2.17
Sadashiva Sugars Limited 37.17 -
Sale of Goods/Service
i. Holding Company
EID Parry (India) Limited 332.89 12.79
ii. Fellow Subsidiary
Sadashiva Sugars Limited 264.02 255.26
Coromandel International Limited 55.75 40.20
Investment in Equity Shares
Subsidiary ABSPL - -
Unsecured loans given
Subsidiary – ABSPL 10.34 13.65
Unsecured loans taken
i. Holding Company - EID Parry (India) Limited 3,000.00 23,997.16
ii. Fellow Subsidiary - Coromandel International Limited 2,000.00 900.00
iii. Fellow Subsidiary - Sadashiva Sugars Limited 1,500.00 -
Issue of Preference Shares
i. Holding Company - EID Parry (India) Limited 2,500.00 7,500.00
Remuneration
Key Management Personnel
Mr D. Kumaraswamy 71.30 68.50
Balance Payable /(recoverable) at the end of the year:
i. Holding 15,859.61 15,802.97
ii. Subsidiary (1,322.99) (1,312.65)
iii. Fellow Subsidiaries (65.23) 43.12
iv. Individuals exercising control or signifcant infuence and their relatives - -
v. Enterprises where Individuals exercising control or signifcant infuence
over the company have signifcant infuence
- -
48. Previous year’s fgures have been regrouped/reclassifed to conform to Current year’s classifcation.
49. Previous fnancial year was for a period of ffteen months, whereas 2011-12 is for a period of nine months and hence
fgures are not comparable.
For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Parrys Sugar Industries Limited
62
Cash Flow Statement for the nine months period ended March 31, 2012
` in Lakhs
2012 2011
A. Cash fow from Operating Activities
Net Proft/(Loss) before Taxation (2,012.93) (10,453.62)
Adjustments for:
Depreciation 2,349.96 3,665.80
Bad debts written of - -
Provision for doubtful advances - -
Interest received (5.75) (53.04)
Interest and fnance charges 5,178.17 7,823.24
Provisions no longer required written back (9.27) (24.44)
(Proft) / Loss on sale of fxed assets 2.71 7,515.82 2.25 11,413.81
Operating proft/(loss) before working capital changes 5,502.89 960.19
Adjustments for:
Trade and other receivables (4,150.71) (1,627.97)
Inventories (5,201.78) (3,599.93)
Trade and other payables 12,995.10 3,642.61 (2,309.89) (7,537.79)
Cash generated from/ (used in) operations 9,145.50 (6,577.60)
Interest paid (4,323.32) (6,809.91)
Income taxes paid - 332.20
Net cash from / (used in) operating activities 4,822.18 (13,055.31)
B. Cash from Investing Activities
Purchase of Fixed assets (5,789.52) (2,365.22)
Proceeds from sale of fxed assets 6.99 4.50
Investments in Equity shares of Subsidiaries - -
Proceeds from sale of investments - -
Proceeds from transfer of Aircraft business - -
Interest / dividends received 1.16 51.52
Net cash from / (used in) investing activities (5,781.37) (2,309.20)
C. Cash Flow from Financing Activities
Proceeds from issuance of Share Capital 2,500.00 7,500.00
Proceeds from Short Term loans 16,500.00 28,897.16
Repayments of Short Term loans (22,405.23) (8,400.00)
Proceeds from Long Term loans 5,500.00 59,865.19
Repayment of Long Term loans (671.09) (71,934.84)
Dividend Paid (10.29) (0.06)
Net cash from / (used in) fnancing activities 1,413.39 15,927.45
Net Change In Cash And Cash Equivalents 454.20 562.94
Cash And Cash Equivalents -Opening Balance 875.00 312.06
Cash And Cash Equivalents - Closing Balance 1,329.20 875.00
[Refer Note 3 Below ]
Notes:
1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2012 and the
related Proft and Loss Account for the nine months period ended on that date.
2. The above Cash fow statement has been prepared under the “Indirect Method” as set out in Accounting Standard - 3 on
Cash fow Statements, as notifed under Section 211 (3C) of the Companies Act, 1956.
3. Cash and Cash Equivalents - closing balance include balances aggregating to `46.57 Lakhs [2011: `56.86 Lakhs] with
Scheduled banks in respect of unclaimed dividend, which are not available for use by the Company.
4. Previous year’s fgures have been regrouped wherever necessary in order to conform to this year’s presentation.
This is the Cash Flow Statement referred to in our report of even date For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
63
Auditors’ Report on Consolidated Financial Statements
To the Board of Directors,
Parrys Sugar Industries Limited,
We have audited the attached Consolidated Balance Sheet of Parrys Sugar Industries Limited as at 31st March 2012 and the
Consolidated Statement of Proft and Loss and also the Consolidated Cash Flow Statement for the nine months period ended
on that date annexed thereto. These fnancial statements are the responsibility of the Management. Our responsibility is to
express an opinion on these fnancial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in India. These standards require that we
plan and perform the audit to obtain reasonable assurance whether the fnancial statements are prepared, in all material
respects, in accordance with an identifed fnancial reporting framework and are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in fnancial statements. An audit also
includes assessing the accounting principles used and signifcant estimates made by Management, as well as evaluating the
overall fnancial statements. We believe that our audit provides a reasonable basis of our opinion.
We did not audit the fnancial statements of the Subsidiary M/s. Alagawadi Bireshwar Sugars Private Limited whose fnancial
statements refect total assets and Liabilities of ` 14.29 Crores as at 31st March 2012, total revenues of ` Nil Crores and Cash
Out Flows amounting to ` 0.04 Crores for the period ended 31st March, 2012, whose fnancial statements were audited by
other auditors. These fnancial statements and other fnancial information have been audited by other Auditors whose report
has been furnished to us and opinion on the consolidated fnancial statements to the extent they have been derived from
such fnancial statement is based solely on the report of such other Auditor.
We report that the Consolidated Financial Statements have been prepared by the Company’s Management in accordance
with the requirements of Accounting Standard -21- Consolidated Financial Statements issued by the Institute of Chartered
Accountants of India to the extent they are applicable.
Based on our audit and on consideration of the reports of other auditors on separate fnancial statements, in our opinion and
to the best of our information and according to the explanations given to us, the attached Consolidated Financial Statements
give a true and fair view in conformity with the accounting principle generally accepted in India:
a) In the case of the Consolidated Balance Sheet, of the state of afairs of the Group as at 31st March 2012;
b) In the case of the Consolidated Statement of Proft and Loss, of the loss for nine months period ended on that date; and
c) In the case of the Consolidated Cash Flow Statement, of the cash fows for the nine months period ended on that date.
For R.G.N Price & Co.
Chartered Accountants
Firm Regn. No.: 002785 S
H. S. Venkatesh
Partner
Chennai Membership No. 026666
April 24, 2012
Parrys Sugar Industries Limited
64
` in Lakhs
S.
No.
Particulars Note
No.
As at
March 31, 2012
As at
June 30, 2011
I. EQUITY AND LIABILITIES
Shareholders’ Funds
(a) Share Capital 1 13,407.68 10,907.68
(b) Reserves and Surplus 2 (6,639.43) (6,000.13)
(c) Money received against share warrants - -
2. Share Application Money Pending Allotment - -
3. Non-Current Liabilities
(a) Long Term Borrowings 3 41,922.51 38,128.87
(b) Deferred Tax Liability (Net) 33 - 1,375.60
(c) Other long Term Liabilities 4 852.96 555.42
(d) Long Term Provisions 5 - -
4. Current Liabilities
(a) Short Term Borrowings 6 18,239.50 23,144.74
(b) Trade Payables 7 9,130.89 2,258.39
(c) Other Current Liabilities 8 9,913.79 3,201.96
(d) Short Term Provisions 9 52.92 69.09
TOTAL 86,880.82 73,641.62
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets 10
(i) Tangible Assets 52,338.94 49,809.92
(ii) Intangible Assets 247.32 330.63
(iii) Capital Work in Progress 1,279.38 279.23
(iv) Intangible assets under development - -
(b) Goodwill on Consolidation 1,264.73 1,264.73
(c) Non Current Investments 11 - -
(d) Deferred Tax Asset (Net) - -
(e) Long Term Loans & Advances 12 1,609.37 1,001.79
(f ) Other Non-Current Assets 13 526.06 582.64
2. Current Assets
(a) Current Investments 14 5.00 5.00
(b) Inventories 15 17,661.09 12,459.31
(c) Trade Receivables 16 4,601.45 1,393.87
(d) Cash and bank equivalents 17 1,429.92 979.78
(e) Short Term Loans & Advances 18 5,905.55 5,521.61
(f ) Other current assets 19 12.01 13.11
TOTAL 86,880.82 73,641.62
See accompanying notes to the fnancial statements 26-46
The notes referred to above form an integral part of the Balance Sheet
Consolidated Balance Sheet as at March 31, 2012
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
65
Consolidated Statement of Proft and Loss for the period ended March 31, 2012
` in Lakhs
S.
No.
Particulars Note
No.
9 months
ended March
31, 2012
15 months
ended
June 30, 2011
I Revenue from Operations 20 46,739.09 41,784.06
II Other Income 21 5.75 10.61
III Total Revenue (I + II) 46,744.84 41,794.67
IV Expenses:
Cost of materials consumed 37,800.90 34,882.44
Purchases of Stock-in-Trade - -
Changes in Inventories 22 (4,819.32) (3,308.61)
Employee beneft expenses 23 1,961.64 1,974.10
Finance costs 24 5,178.17 7,823.24
Depreciation and amortisation expenses - 2,349.96 3,665.80
Other expenses 25 6,288.39 7,211.32
Total Expenses 48,759.74 52,248.29
V Proft / (Loss) before exceptional and extraordinary items and tax
(III - IV)
(2,014.90) (10,453.62)
VI Exceptional items - -
VII Proft / (Loss) before extraordinary items and tax (V - VI) (2,014.90) (10,453.62)
VIII Extraordinary items -
IX Proft / (Loss) before tax (2,014.90) (10,453.62)
X Tax Expenses:
(1) Current Income Tax - (123.97)
(2) Deferred Income Tax 33 (1,375.60) (862.24)
(3) Total (1,375.60) (986.21)
XI Proft / (Loss) for the period (IX - X) (639.30) (9,467.41)
XII Earning Per Equity Share 43
(1) Basic (6.51) (47.44)
(2) Diluted - -
See accompanying notes to the fnancial statements 26-46
The notes referred to above form an integral part of the Statement of Proft and Loss
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Parrys Sugar Industries Limited
66
Notes forming part of the Consolidated Accounts
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 1
SHARE CAPITAL
AUTHORISED :
Preference Shares:
5,19,00,000 (2011: 5,19,00,000) Equity Shares of face value of ` 10/- each 5,190.00 5,190.00
2,10,00,000 (2011: 2,10,00,000 ) (8%) Redeemable Non Cumulative Preference Shares
of face value of ` 11/- each 2,310.00 2,310.00
10,00,00,000 (2011: 10,00,00,000 ) (8%) Redeemable Cumulative Preference Shares of
face value of ` 10/- each 10,000.00 10,000.00
17,500.00 17,500.00
ISSUED, SUBSCRIBED AND PAID-UP
19,961,707 [2011: 19,961,707] Equity Shares of ` 10/- each fully paid up 1,996.17 1,996.17
Of the above:
[13,963,002 Equity Shares of ` 10 each per share were issued as fully paid up to
the shareholders’ of erstwhile M/s Varalakshmi Sugars Limited and M/s Varalakshmi
International Limited on their respective amalgamation with the Company, for
consideration otherwise than in cash.]
[12,975,110 Shares [2011: Nil] of `10/- each are held by the Holding Company M/s
E.I.D.-Parry (India) Ltd.]
Preference Shares
(i) 12,831,880 8% Redeemable Non-Cumulative Preference shares of ` 11/- each 1,411.51 1,411.51
[The above Non-Cumulative Preference shares are held by E.I.D.-Parry (India) Ltd.
and were transferred from GMR Holdings Pvt. Ltd. pursuant to the Share Purchase
Agreement dated 25.04.2010. These shares were earlier issued as fully paid up
to M/s. GMR Holdings Private Limited and other shareholders’ of erstwhile M/s.
Varalakshmi International Limited on its amalgamation with the Company, for
consideration otherwise than in cash.]
[The Preference shares are redeemable not later than 8 years from the date of
issue i.e. August 14, 2004 with a call option to the shareholders for redemption
after three years from the date of issue.]
(ii) 100,000,000 8% Redeemable Cumulative Preference shares of ` 10/- each 10,000.00 7,500.00
[The Preference shares are redeemable not later than 8 years from the date of
issue, i.e. June 30, 2011 for 75,000,000 shares and August 30, 2011 for 25,000,000
shares, with a call option to the shareholders for redemption after three years
from the date of issue.]
13,407.68 10,907.68
Annual Report 2011-12
67
Notes forming part of the Consolidated Accounts
(i) Details of shareholders holding more than 5 percent of equity shares in the company are as follows:
Name of the Shareholder No. of shares held
As at March 31, 2012 As at June 30, 2011
Nos. % Nos. %
E.I.D.- Parry (India) Limited 12,975,110 65 12,975,110 65
GMR Holdings Private Limited 4,397,295 22 4,397,295 22
(ii) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at June 30, 2011
Nos. ` in Lakhs Nos. ` in Lakhs
Equity Shares
At the beginning of the period 19,961,707 1,996.17 19,961,707 1,996.17
Issued during the period - - - -
Outstanding at the end of the period 19,961,707 1,996.17 19,961,707 1,996.17
Preference Shares
At the beginning of the period 87,831,880 8,911.51 12,831,880 1,411.51
Issued during the period 25,000,000 2,500.00 75,000,000.00 7,500.00
Outstanding at the end of the period 112,831,880 11,411.51 87,831,880 8,911.51
NOTE 2
RESERVES AND SURPLUS
As at
July 1, 2011
Additions Elimination
March 31, 2012
As at
March 31, 2012
Capital Reserves
Capital Redemption Reserve 1,175.00 - - 1,175.00
Securities Premium 991.97 - - 991.97
2,166.97 - 2,166.97
Revenue Reserves
General Reserve 1,570.73 - - 1,570.73
1,570.73 - - 1,570.73
3,737.70 - - 3,737.70
As at
March 2012
As at
June 2011
Proft and Loss Account Balance (9,737.83) (270.42)
Add: Proft (Loss) for the period (639.30) (9,467.41)
(10,377.13) (9,737.83)
Less:
Interim Dividend on Equity Shares - ` Nil per share (2011 : ` Nil per share) - -
Proposed Dividend on Equity Shares - ` Nil (2011 : ` Nil per share) - -
Dividend Distribution Tax - -
Transfer to Debenture Redemption Reserve - -
Transfer to General Reserve - -
(10,377.13) (9,737.83)
Total Reserves and Surplus (6,639.43) (6,000.13)
Parrys Sugar Industries Limited
68
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 3
LONG TERM BORROWINGS (Also Refer Note 28)
(a) Secured Term Loans from:
- Banks - Rupee Loan 25,950.00 20,500.00
- Government of India - Sugar Development Fund 2,475.35 3,131.71
28,425.35 23,631.71
(b) Unsecured Loans from:
- Inter corporate Loan 13,497.16 14,497.16
41,922.51 38,128.87
NOTE 4
OTHER LONG TERM LIABILITIES
Trade payables 852.96 555.42
852.96 555.42
NOTE 5
LONG-TERM PROVISIONS
Provision for employee benefts - -
- -
NOTE 6
SHORT TERM BORROWINGS
(a) Loans repayable on demand
- Cash Credit from Bank 2,072.83 7,144.74
- Secured Short Term loan from Banks - Rupee loan 4,166.67 10,000.00
- Unsecured Short Term loan from Banks - Rupee loan 10,000.00 4,000.00
- Inter corporate Loans 2,000.00 2,000.00
18,239.50 23,144.74
(b) Deposits
- Secured Deposits - -
- Unsecured Deposits - From Customers - -
-
18,239.50 23,144.74
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
69
Note 6 (a)
Details of Loans and terms of repayment
Lender Name Refer Note. As at
March 31, 2012
As at
June 30, 2011
Terms of Repayment
(as at March 31, 2012)
SBI Term Loan 27 (i) 3,000.00 - Repayable during next
7 years
Axis Bank Loan 27 (ii) 20,500.00 20,500.00 Repayable during next 7
years
ICICI Bank Loan 27 (iii) 2,500.00 - Repayable during next 6
years
AB Central Excise Loan - 191.02 Not Applicable
SBM Central Excise Loan - 93.07 Not Applicable
SDF Term Loan I - Sankili Unit - 76.61 Not Applicable
SDF Term Loan II - Sankili Unit 27 (iv) 926.86 1,158.57 Repayable during next
4 years
Cane Development Loan - Sankili Unit 27 (iv) 112.50 112.50 Repayable during next
2 years
SDF - Cogen Loan - Haliyal Unit 27 (v) 1,783.14 1,854.32 Repayable during next
5 years
SDF - Raw Sugar Processing Loan - Haliyal
Unit
27 (v) 15.00 22.50 Repayable during next
2 years
SDF Cane Development Loan - Haliyal Unit 27 (v) 75.00 75.00 Repayable during next
2 years
SDF Cane Development Loan - Ramdurg
Unit
27 (vi) 75.00 75.00 Repayable during next
2 years
Andhra Bank Short Term Loan - 2,500.00 Not Applicable
Bank of India Short Term Loan 27 (vii) 4,166.67 5,000.00 Repayable during next
5 months
Axis Bank Short Term Loan - 2,500.00 Not Applicable
SBI Cash Credit 27 (viii) 2,072.83 7,144.74 On Demand
Indian Bank Short Term Loan - 4,000.00 Not Applicable
L&T Finance Ltd. Short Term Loan 28 (i) 2,000.00 2000.00 Repayable during next
3 months
Dena Bank Short Term Loan 28 (ii) 5,000.00 - Repayable during next
9 months
Axis Bank Short Term Loan 28 (iii) 5,000.00 - Repayable during next
6 months
EID Parry (India) Ltd. Loans 28 (iv) 13,497.16 14,497.16 Repayable during next
6 months
Total 60,724.16 61,800.47
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
70
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 7
TRADE PAYABLES
(a) Dues to Micro Enterprises and Medium Enterprises - -
(Refer Note 34)
(b) Other Trade Payables 9,130.89 2,258.39
9,130.89 2,258.39
NOTE 8
OTHER CURRENT LIABILITIES
(a) Current maturities of long-term debt (Also Refer Note 28 )
- Banks - Rupee Loan 50.00 284.08
- Government of India - Sugar Development Fund 512.15 242.79
- Financial Institutions - -
(b) Interest accrued but not due on borrowings 1,970.44 1,115.59
(c) Unpaid dividends 46.57 56.86
(d) Other payables
- Other Misc. Liabilities 6,411.95 891.74
- Advances and Deposits from Customers/Others 922.68 610.90
- Due to Directors - -
9,913.79 3,201.96
NOTE 9
SHORT-TERM PROVISIONS
Provision for employee benefts 52.92 69.09
52.92 69.09
NOTE 10
FIXED ASSETS ` in Lakhs
GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK
Cost/Value
As at 01-07-2011
Additions Deletions Cost/Value
As at 31-03-2012
As at
01-07-2011
For
the year
Deletions As at
31-03-2012
As at
31-03-2012
As at
30-06-2011
Tangible Assets
Land 3,605.23 31.84 - 3,637.07 - - - - 3,637.07 3,605.23
Buildings 9,779.62 381.79 - 10,161.41 1,176.92 220.16 - 1,397.08 8,764.33 8,602.70
Plant and Equipment 46,560.11 4,309.10 - 50,869.21 10,586.34 1,987.81 - 12,574.15 38,295.06 35,973.77
Furniture and Fixtures 2,355.76 17.41 - 2,373.17 966.19 25.48 - 991.67 1,381.50 1,389.57
Vehicles 414.70 65.23 15.34 464.59 176.05 33.23 5.67 203.61 260.98 238.65
62,715.42 4,805.37 15.34 67,505.45 12,905.50 2,266.68 5.67 15,166.51 52,338.94 49,809.92
Intangible Assets
SAP & CMS Project 666.49 - - 666.49 335.86 83.31 - 419.17 247.32 330.63
63,381.91 4,805.37 15.34 68,171.94 13,241.36 2,349.99 5.67 15,585.68 52,586.26 50,140.55
Previous Year 60,280.45 3,159.44 57.98 63,381.91 9,626.79 3,665.80 51.23 13,241.36
Capital Work-in-Progress 1,279.38 279.23
Intangible assets under development - -
53,865.64 50,419.78
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
71
NOTE 11
NON-CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at
July 1, 2011
Acquisitions Sales As at
March 31, 2012
As at
July 1, 2011
Acquisitions Sales As at
March 31, 2012
I. Quoted Investments - - - - - - - -
II. Unquoted Investments - - - - - - - -
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 12
LONG-TERM LOANS AND ADVANCES
Unsecured and considered good unless otherwise stated :
(a) Capital Advances 775.88 -
(b) Security Deposits 585.57 606.19
(c) Loans and advances to related parties - -
(d) Other loans and advances
- Advance Tax less Provision for Tax 74.13 71.98
- Balance with Customs and Central Excise Authorities - -
- MAT Credit Entitlement 125.35 125.35
- Advance recoverable in cash or in kind or for value to be received
? Unsecured and Considered Good 48.44 198.27
? Considered Doubtful - -
1,609.37 1,001.79
NOTE 13
OTHER NON-CURRENT ASSETS
(a) Long Term Trade Receivables
- Secured, considered good - -
- Unsecured considered good 526.06 582.64
- Doubtful -
(b) Others - -
526.06 582.64
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
72
NOTE 14
CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at
July 1, 2011
Acquisitions Sales
As at
March 31, 2012
As at
July 1, 2011
Acquisitions Sales
As at
March 31, 2012
I. Quoted Investments
Other Investments
Metkore Alloys & Industries Ltd.
(formerly Cronimet Alloys India Ltd. )
2 250,000 - - 250,000 5.00 - - 5.00
II. Government Securities
National Savings Certifcate
Total Quoted Investments 5.00 - - 5.00
Market Value of Quoted
Investments 62.13 - - 38.00
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 15
INVENTORIES
(a) Raw materials 129.87 101.82
(b) Work-in-progress 739.26 149.58
(c) Finished goods 14,783.17 10,658.23
(d) Finished goods in Transit 6.63 15.32
(e) By Products 690.34 576.95
(f ) Stock-in-trade (in respect of goods acquired for trading) - -
(g) Stores and spares 1,311.82 957.41
17,661.09 12,459.31
NOTE 16
TRADE RECEIVABLES (UNSECURED)
Debts outstanding for a period exceeding six months:
(a) Considered good 2,878.58 529.19
(b) Considered doubtful - -
2,878.58 529.19
Other Debts:
Considered good 1,722.87 864.68
4,601.45 1,393.87
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
73
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 17
CASH AND CASH EQUIVALENTS
(a) Balances with banks
In Current account 259.08 799.37
In Dividend account 46.57 56.86
In Margin Money accounts towards Bank Guarantee 118.68 18.68
In Deposit account
? More than 12 months of maturity - 100.00
? Others 1,000.00 -
(b) Cheques, drafts on hand - -
(c) Cash on hand 5.59 4.87
1,429.92 979.78
NOTE 18
SHORT-TERM LOANS AND ADVANCES
(a) Capital Advances - -
(b) Security Deposits 29.79 -
(c) Loans and advances to related parties - -
(d) Other loans and advances
- Balance with Customs and Central Excise Authorities 2,452.19 2,580.81
- Advance recoverable in cash or in kind or for value to be received - -
? Unsecured and Considered Good 3,423.57 2,940.80
? Considered Doubtful 622.36 32.44
? Less: Provision for Doubtful Advances (622.36) (32.44)
5,905.55 5,521.61
NOTE 19
OTHER CURRENT ASSETS
Income Accrued on Deposits etc. 12.01 13.11
12.01 13.11
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
74
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 20
REVENUE FROM OPERATIONS
(a) Sales of Products 47,153.66 42,984.90
Less : Excise Duty 1,701.08 1,603.60
45,452.58 41,381.30
(b) Sale of services - -
(c) Other operating revenues
- Liabilities/Provisions no longer required written back 9.27 24.44
- Other income from Power - 60.30
- Insurance Claims Received 353.25 16.55
- Scrap Sales 200.97 61.04
- Sundry Income 723.02 240.43
46,739.09 41,784.06
NOTE 21
OTHER INCOME
Proft on sale of Fixed Assets -
Proft on sale of Investments -
Dividend Income
Interest on Deposits, etc. 5.75 10.61
5.75 10.61
NOTE 22
CHANGES IN INVENTORIES
(Increase)/Decrease in Stocks
Opening Stock:
Work-in-process 149.58 235.77
Finished Goods 11,250.50 7,855.70
11,400.08 8,091.47
Closing Stock:
Work-in-process 739.26 149.58
Finished Goods 15,480.14 11,250.50
16,219.40 11,400.08
(4,819.32) (3,308.61)
NOTE 23
EMPLOYEE BENEFIT EXPENSES (Refer Note 36)
Salaries, Wages and Bonus 1,446.03 1,589.53
Deputed Employee Cost 271.10 166.45
Contribution to Provident and Other Funds 98.84 106.82
Expenses on Employee Stock Option Scheme (ESOP) - -
Workmen and Staf Welfare Expenses 145.67 111.30
1,961.64 1,974.10
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
75
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 24
FINANCE COST
(a) Interest expense
- Debentures - -
- Other Fixed Loans 4,351.71 6,168.64
- Others 580.30 997.50
(b) Other borrowing costs 246.16 657.10
(c) Net gain/loss on foreign currency transactions and translation - -
5,178.17 7,823.24
NOTE 25
OTHER EXPENSES
(a) Consumption of Stores, Spares and Consumables 1,312.03 1,373.07
(b) Power and Fuel 475.15 662.29
(c) Rent 22.58 57.41
(d) Repairs and Maintenance
- Buildings 50.12 60.99
- Plant and Machinery 1,258.30 1,231.81
- Others 170.22 390.57
1,478.64 1,683.37
(e) Insurance 95.81 116.90
(f ) Rates and Taxes 75.57 167.87
(g) License Fee 64.14 220.57
(h) Material Handling Expenses 311.37 312.16
(i) Other Manpower Cost 257.67 629.64
(j) Distribution Expenses 15.45 15.16
(k) Travelling and Conveyance 186.10 304.54
(l) Communication Expenses 40.31 64.99
(m) Operation Lease Rentals 560.57 912.51
Printing and Stationery 22.46 24.46
(o) Auditors’ Remuneration 13.95 20.00
(p) Directors’ Remuneration 71.30 126.74
(q) Directors’ Fees and Commission 5.35 7.95
(r) Sales Promotion and Publicity - -
(s) Fixed Assets scrapped 2.71 2.25
(t) Professional Charges 99.54 101.76
(u) Provision for Doubtful Debts and Advances 589.92 -
(v) Bad Debts/Advances written of - -
(w) General Manufacturing, Selling and Administration Expenses 587.77 407.68
6,288.39 7,211.32
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
76
26. Signifcant Accounting Policies and Notes on Consolidated Accounts
26.1 (a) Principles of Consolidation
The consolidated fnancial statements include fnancial statements of the Company and its subsidiary
companies. Subsidiary companies are those companies in which Parrys Sugar Industries Limited, either directly
or indirectly, has interest of more than one half of voting power or otherwise has power to exercise control over
operations. Subsidiaries are consolidated from the date on which efective control is transferred to the group till
the date such control exists. The consolidated fnancial statements are prepared in accordance with Accounting
Standard (AS) 21 on Consolidated Financial Statements as specifed in the Companies (Accounting Standard)
Rules, 2006, and the relevant provisions of the Companies Act, 1956.
All intra group transactions, balances and unrealised profts and losses on transactions between the group
companies are eliminated.
Minority interest represents the amount of equity attributable to minority shareholders/partners at the date on
which investment in subsidiary is made and its share of movements in equity.
The details of the subsidiary considered in the consolidated fnancial statements for the year ended March 31,
2012, along with the shareholding, is listed below:
Name of the Company Relationship % of Shareholding as at
March 31,
2012
June 30, 2011
Alagawadi Bireshwar Sugars Private Limited Subsidiary 100% 100%
(b) Basis of preparation of fnancial statements
The fnancial statements are prepared to comply in all material aspects with the applicable accounting principles
in India, the Accounting Standards notifed under Sub-section (3C) of Section 211 of the Companies Act, 1956
(hereinafter referred as “the Act”) and other relevant provisions of the Act.
26.2 Use of Estimates
The preparation of fnancial statements requires the management to make estimates and assumptions that afect
the reported balances of assets and liabilities on the date of the fnancial statements and reported amounts of
income and expenses during the reporting period. Management believes that the estimates used in the preparation
of fnancial statements are prudent and reasonable. Actual results could difer from these estimates. Any revision to
accounting estimates is recognized prospectively in the current and future periods.
26.3 Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent improvements thereto including taxes, duties, freight
and other incidental expenses for bringing the asset concerned to its working condition for its intended use,
less accumulated depreciation and impairment loss. Interest on borrowings attributable to qualifying assets are
capitalised and included in the cost of fxed assets as appropriate. Intangible assets are stated at the consideration
paid for acquisition less accumulated amortisation.
26.4 Leases
Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are
classifed as fnance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or the
present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental
paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the
Annual Report 2011-12
77
outstanding liability for each period. Assets acquired as leases, where a signifcant portion of the risk and rewards
of ownership are retained by the lessor, are classifed as operating leases. Lease rentals are charged to the Proft and
Loss Account on accrual basis as per terms of the lease.
26.5 Borrowing costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are charged to revenue.
26.6 Depreciation and Amortisation
Depreciation is provided on straight line method, pro rata to the period of use, at the rates specifed in schedule XIV
of the Act or the rates based on the useful lives of the assets as estimated by the management, whichever is higher.
The rates based on the useful lives of the assets in the following categories are estimated to be higher than those
specifed in Schedule XIV of the Act:
Electrical Equipment 5.38%
Telephone Equipment 6.33%
Computer Software 16.67%
Leasehold assets are amortized at rate based on the remaining period of lease or the rate specifed in Schedule XIV
of the Act, whichever is higher.
All individual assets costing ` 5,000/- or less are fully depreciated in the year of purchase.
26.7 Investments
Long term investments are valued at cost. Provision is made to recognize a decline, other than temporary, in the
value of long term investments. Current Investments are stated at lower of cost or market value.
26.8 Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realizable Value. The costs are, in general, determined
on Weighted Average Basis.
b. Finished goods and Work-in-process: Finished goods are valued at lower of cost or Net Realizable Value. Cost
includes direct materials, Labour and a proportion of manufacturing overheads based on normal operating
capacity. Work In process is valued at lower of cost or Net Realizable Value. The cost is determined up to the
estimated stage of process and includes direct materials, Labour and a proportion of manufacturing overheads
based on normal operating parameters.
c. By Products: At estimated realizable value.
d. Stores and Spares: At lower of cost or Net Realizable Value. The costs are, in general, determined on weighted average
basis.
26.9 Revenue Recognition
Revenue is recognized when the signifcant risks and rewards of ownership of goods have been passed on to the
buyer. Sale of goods is exclusive of sales tax and captive consumption of Molasses, Power and Baggasse.
Dividend Income is recognized in the year in which the right to receive the payment is established.
Income from investments is recognized in the year in which it is accrued and stated at gross of tax deducted at
source.
Parrys Sugar Industries Limited
78
26.10 Foreign Currency Transactions
All foreign currency transactions are accounted for at the exchange rates prevailing on the date of such transactions.
Liabilities/assets in foreign currencies are reckoned in the accounts as per the following principles:
Exchange diferences arising on reporting of long term foreign currency monetary items at rates diferent from those
at which they were initially recorded during the period or reported in previous fnancial statements, are accounted
as below:
(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of
the asset and are depreciated over the balance life of the asset; and
(b) In other cases, the said exchange diferences are accumulated in a ‘Foreign Currency Monetary Items Translation
Diference Account’ and amortized over the balance period of such long term asset/liability but not beyond
March 31, 2020.
All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the
year end and all exchange gains/losses arising there from are adjusted to the Proft and Loss Account, except those
covered by forward contracted rates where the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of the contract.
Exchange diferences on forward contracts are recognised in the Proft and Loss Account in the reporting period in
which the exchange rates change. Any proft or loss arising on cancellation or renewal of such forward contracts is
recognised as income or expense for the year.
For forward exchange contracts and other derivatives that are not covered by Accounting Standard (AS) -11 ‘The
Efects of Changes in Foreign Exchange Rates’, the Company follows the guidance in the announcement of the
Institute of Chartered Accountants of India (ICAI) dated March 29, 2008, whereby for each category of derivatives,
the Company records any net mark-to-market losses. Net mark-to-market gains are not recorded for such derivatives.
26.11 Employee Benefts
a. Short Term Employee Benefts :
Undiscounted amount of short term employee benefts expected to be paid in exchange for the services
rendered by employees is recognised during the period when the employee renders the services. These benefts
include compensated absences such as paid annual leave and performance incentives.
b. Defned Contribution Plans:
These comprise of contributions to employees’ provident fund with the government and certain state plans
like Employees’ State Insurance and Employees’ Pension Scheme. The Company’s payments to the defned
contribution plans are recognized as an expense during the period in which the employees perform the services
that the payment covers.
c. Defned Beneft Plans:
Gratuity for employees is covered under a scheme of Life Insurance Corporation of India and contributions in
respect of such scheme are recognized in the Proft and Loss Account. The liability as at the Balance Sheet date is
provided for based on the actuarial valuation, based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the
efect of changes in the actuarial assumptions and are recognised immediately in the Proft and Loss Account
as income or expense.
d. Other Long Term Employee Benefts :
Other Long term employee benefts comprise of Compensated absences which are not expected to occur within
Annual Report 2011-12
79
twelve months after the end of the period in which the employee renders the related services are recognised
as a liability at the present value of the defned beneft obligation at the balance sheet date based on actuarial
valuation carried out at each balance sheet date.
26.12 Earnings per Share
The earnings considered in ascertaining the Company’s Earnings Per Share (EPS) comprise of the net proft after tax
less dividend (including dividend distribution tax) on preference shares. The number of shares used for computing
the basic EPS is the weighted average number of shares outstanding during the year.
26.13 Taxes on Income
Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax
payable in respect of taxable income for the period.
Deferred tax is recognised on timing diferences between the accounting income and the taxable income for the
year and quantifed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/virtual certainty that
sufcient future taxable income will be available against which such deferred tax asset can be realised.
26.14 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable
that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
made. Provisions, other than employee benefts, are not discounted to their present value and are determined based
on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current management estimates.
26.15 Contingencies
Obligations which are material and whose future outcome cannot be ascertained with reasonable certainty are
treated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts.
26.16 Impairment of Assets
Impairment loss is provided to the extent carrying amount of assets exceeds their recoverable amount. Recoverable
amount is higher of asset’s selling price and its value in use. Value in use is the present value of estimated future cash
fows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable,
willing parties, less the costs of disposal.
26.17 Expenditure
Expenses are net of taxes recoverable, where applicable.
27. Secured Loans
(i) Term Loan & Short Term (Bridge) Loan extended by State Bank of India is primarily secured by Pari-passu frst
charge on fxed Assets of the Company and collaterally secured by second charge on the current assets of the
Company.
(ii) Term Loan extended by Axis Bank Ltd. is primarily secured by Pari-passu frst charge on fxed Assets of the
Haliyal & Sankili Units.
(iii) Term Loan extended by ICICI Bank Ltd. is secured by Pari-passu second charge on fxed Assets of the Company.
The process of charge creation in favour of ICICI Bank Ltd. is pending.
Parrys Sugar Industries Limited
80
(iv) Loans extended by Sugar Development Fund, Government of India (SDF) for Modernisations/Expansion/Cane
Development at our Sankili Unit is secured by Pari-passu frst charge on movable & immovable properties of the
Sankili Unit.
(v) Loans extended by SDF for Cogeneration Project/Raw-Sugar Processing/Cane development at our Haliyal Unit
is secured by Pari-passu frst charge on movable & immovable properties of the Haliyal Unit.
(vi) Loans extended by SDF for Cane development at the Ramdurg Unit is secured by Bank Guarantee.
(vii) Short Term Loan extended by Bank of India is secured by Pari-passu frst charge on fxed assets of the Haliyal
Unit.
(viii) Cash Credit facility extended by State Bank of India is secured by way of hypothecation of entire current assets
of the company and further secured by second charge on company’s fxed assets.
The above loans extended by SDF & Banks carry interest rates ranging from 4.00% p.a. to 13.50% p.a. The loans
extended by banks are linked to their Base Rate.
28. Unsecured Loans
(i) Loan extended by L & T Finance Ltd. is unsecured in nature.
(ii) Loan extended by Dena Bank is unsecured in nature.
(iii) Loan extended by Axis Bank Ltd. is unsecured in nature.
(iv) Loans are extended by the Holding Company. EID Parry (India) Ltd. are unsecured in nature.
These loans cannot be withdrawn during the tenancy of the loans extended by SBI, Axis Bank Ltd. & ICICI Bank
Ltd. and hence classifed as Long Term Borrowings.
The above loans extended by EID Parry (India) Ltd. & Banks carries interest rates ranging from 9.50% p.a. to 13.50%
p.a. The loans extended by banks are linked to their Base Rate.
29. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
of `1,819.03 Lakhs (2011: `1,587.95 Lakhs).
30. Contingent Liabilities not provided for on account of :
` In Lakhs
Particulars 2012 2011
a) Bank Guarantees 354.00 347.42
b) Letter of Credit - -
c) Corporate Guarantees given by the Company to banks in respect of crop
loans to farmers and H&T loan
4,599.07 1,291.70
d) Arrears of fxed cumulative dividends of Preference shares 1.64 -
e) Claims made by Government Departments against the Company not
acknowledged as debts:
i. Excise claims under appeal 309.04 263.79
ii. Sales tax & Commercial taxes appeal under various states 61.08 79.76
iii. Other claims (Entry Tax) - -
f ) Preference Dividend attributable to Cumulative Preference Shares 568.31 1.64
31. a) The Ministry of Corporate Afairs, Government of India has vide its Notifcation No. GSR 225(E) dated March
31, 2009 has announced Companies Accounting Standards (Amendment) Rules 2009 prescribing changes to
Annual Report 2011-12
81
Accounting Standard 11 on ‘The Efects of Changes in Foreign Exchange Rates’ extended till 31-03-2020.
The Company has, pursuant to the adoption of such principles of Companies (Accounting Standards)
Amendment Rules 2009, exercised the option of recognizing the exchange diferences arising on reporting
of foreign currency monetary items at rates diferent from those at which they were recorded earlier, in the
original cost of such depreciable fxed assets in so far such exchange diferences arose on foreign currency
monetary items relating to the acquisition of a depreciable asset as below:
Exchange diferences aggregating to ` NIL Lakhs arising during the year ended March 31, 2012 (2011: ` 0.54
Lakhs) have been adjusted to the cost of the depreciable assets.
b)
(` in Lakhs)
Particulars 2012 2011
Borrowing Cost Capitalised on fxed assets/CWIP 294.34 113.08
32. Operating Leases
i. The Company has entered in to a non-cancellable operating lease agreement with Shri Dhanalakshmi Sahakari
Sakkare Karkhane Niyamit, Ramdurg for the lease of sugar factory together with the specifed assets on Built,
Own, Operate and Transfer basis (BOOT) for a period of 25 years. Lease rentals of `560.57 Lakhs (2011: ` 912.51
Lakhs) in respect of the obligation under such lease agreement have been recognized in the Proft and Loss
Account.
Future obligations of lease rentals applicable to the above lease agreement aggregate to `14238.40 Lakhs
(2011: ` 14,798.97 Lakhs) are due:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 769.85 753.04
Later than one year and not later than fve years 3,317.37 3,244.91
Later than fve years 10,151.18 10,801.02
Total 14,238.40 14,798.97
ii. The Company has certain operating leases for ofce facilities and residential premises under a cancellable
operating lease agreement. Such agreements are generally with the option of renewal against increased rent
and premature termination of agreement. The charge on account of lease rentals under such agreements to the
Proft and Loss Account for the year is `22.58 Lakhs (2011: ` 57.41 Lakhs). The future obligations of lease rentals
applicable are as under:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 25.14 24.37
Parrys Sugar Industries Limited
82
33. Deferred Tax
The major components of the deferred tax assets and liabilities on account of timing diferences are as follows:
Deferred Tax Liability/
(Asset)
2011-12 2010-11
` in Lakhs ` in Lakhs
Deferred Tax Liability
Diference between the written down value of assets as per books of account
and Income Tax Act.
1,375.60 4,475.92
Deferred Tax Asset
Unabsorbed Depreciation (398.50) (3,070.46)
Business Loss (977.10) -
Others - (29.86)
Net Deferred Tax liability - 1,375.60
34. There are no suppliers falling under the Micro, Small and Medium Enterprise registered with the company.
35. With respect to receivables from Transmission Corporation of Andhra Pradesh Limited (APTRANSCO) included under
Sundry Debtors:
a) Amounts aggregating to `777.78 Lakhs [2011:` 715.87 Lakhs] relate to price diference matter in dispute
where the Company has appealed before the Apellate Tribunal for Electricity (ATE) against an order of the State
Commission. As the matters are pending before the ATE, the Company, as a matter of prudence, has postponed
the recognition of such amounts as income and a corresponding credit is retained as liability in the books of
account and adjusted against Sundry Debtors as at March 31, 2012.
b) Amounts aggregating to `526.06 Lakhs [2011: ` 582.64 Lakhs] relate to other matters in dispute where the
Company has appealed before the ATE against the orders of State Commission. As the matters are pending
before the ATE, no adjustment has been made in respect of such dues recognised as receivable as at March 31,
2012.
36. (a) The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the
Balance Sheet and Proft and Loss Account.
Particulars Gratuity (Funded)
2011-12 2010-11 2009-10 2008-09
` Lakhs ` Lakhs ` Lakhs ` Lakhs
Present Value of obligations at the beginning
of the year
94.54 104.65 84.09 62.03
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Benefts Settled (20.61) (21.60) (16.11) (2.59)
Actuarial loss/(gain) (0.35) (14.24) (0.03) (14.22)
Present Value of obligations at the end of the
period
97.67 94.54 104.65 84.09
Annual Report 2011-12
83
Particulars Gratuity (Funded)
2011-12 2010-11 2009-10 2008-09
` Lakhs ` Lakhs ` Lakhs ` Lakhs
Changes in the fair value of planned assets
Fair value of plan assets at beginning of year 136.55 67.38 76.97 41.44
Expected return on plan assets 8.05 8.76 5.51 4.42
Contributions - 79.75 - 30.12
Benefts Paid (20.61) (21.60) (16.11) (2.59)
Actuarial gain/(Loss) on plan assets (0.79) 2.26 1.01 3.58
Fair Value of plan assets at the end of the year 123.20 136.55 67.38 76.97
Amounts recognized in the Balance Sheet
Projected beneft obligation at the end of the period 97.67 94.54 104.65 84.09
Fair value of plan assets at end of the period 123.20 136.55 67.38 76.97
Funded status of the plans – asset/(Liability)
recognised in the balance sheet
25.53 42.01 (37.27) (7.12)
Cost for the period
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Expected return on plan assets (8.05) (8.76) (5.51) (4.42)
Net actuarial (gain)/loss recognised in the period (20.61) (11.98) (1.32) (17.81)
Net Cost (4.57) 4.99 29.87 16.64
Assumptions
Discount rate 8.50% 8% 8% 7%
Expected return on assets 8.50% 8% 8% 8%
Rate of Compensation increase 6.00% 6% 6% 6%
Attrition rate 5.00% 5% 5% 5%
Retirement expectancy (in years) 60 60 60 58
Expected average remaining service (in Years) 23.20 23.27 23.36 22.12
Mortality rates LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
Actual return on plan assets (` In Lakhs) 7.26 9.71 6.52 8.00
Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected
rate of return on fund assets has been arrived at. Assumed rate of return on assets is expected to vary from year
to year refecting the returns on matching government bonds.
The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken
on account of infation, seniority, promotion and other relevant factors such as supply and demand in the
employment market.
Parrys Sugar Industries Limited
84
As per the best estimate of the management, contribution of `5.00 lakhs is expected to be paid to the plan
during the year ending March 31, 2013.
(b) Provision made during the year for other long term employee benefts based on the actuarial valuation report
amounted to `NIL (2011: ` 41.54 Lakhs).
(c) During the period, the Company has recognised the following amounts in the Proft and Loss Account, which
are included in ‘Contribution to Provident and Other Funds’.
` in Lakhs
Particulars 2012 2011
Provident Fund and Employees’ Pension Scheme 98.84 96.40
37. Auditors’ Remuneration and Expenses:
` in Lakhs
2011-12 2010-11
(i) Audit Fees 13.83 14.00
(ii) Tax Audit - -
(iii) Company Law matters - -
(iv) Management Services - -
(v) Fees for other services - 6.00
(vi) Reimbursement of out of pocket expenses 0.12 -
Total 13.95 20.00
38. Value of Imports on C.I.F Basis
` in Lakhs
2011-12 2010-11
Capital Goods - 12.50
Spares 9.82 -
9.82 12.50
39. Expenditure in Foreign Currency
` in Lakhs
2011-12 2010-11
Travel 0.69 1.25
Professional Fee - 0.68
0.69 1.93
40. Earnings in Foreign Currency
` in Lakhs
2011-12 2010-11
Sale of Carbon Emission Reduction 70.13 -
70.13 -
41. The Closing Stock of Finished goods has been valued net of Excise duty payable amounting to `659.83 Lakhs.
42. Segment Reporting:
The Company has identifed three business segments viz. Sugar, Power and Distillery. Segments have been identifed
and reported taking into account the nature of the products, the difering risks and returns, the organizational
structure and internal business reporting system.
(a) Revenue and expenses have been identifed to a segment on the basis of relationship to operating activities of
the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment
on a reasonable basis have been disclosed as “Un-allocable”.
Annual Report 2011-12
85
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Parrys Sugar Industries Limited
86
(b) Segment Assets and Segment Liabilities represent assets and liabilities of respective segment. Investments, tax
related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have
been disclosed as “Un-allocable”.
(c) The Company generally accounts for inter segment sales/transfer as if the sales/transfers were to external
parties at prevailing average market price on the date of transfer.
43. Earnings per Share
The computation of earnings per share is set out below:
Particulars 2012 2011
Nominal Value of Equity Shares (`) 10 10
Net Proft/(Loss) after Tax (` Lakhs) (639.30) (9,467.41)
Less : Preference Dividend attributable to Preference Shares (including
corporate tax thereon)
660.49 1.64
Net Proft/(Loss) attributable to the Equity Shareholders (1,299.79) (9,469.05)
Shares:
Weighted average number of Equity Shares of ` 10 each outstanding during
the year
19,961,707 19,961,707
Basic and diluted Earnings/(Loss) – ` Per Share (6.51) (47.44)
44. Related Party Disclosures
i. Names of the related parties and description of relationship
Relationship Name of the Parties
Holding Company EID Parry (India) Limited
Subsidiary Company Alagawadi Bireshwar Sugars Private Limited (ABSPL)
Fellow Subsidiaries Coromandel International Ltd.
Parry Chemicals Ltd.
CFL Mauritius Limited
Coromandel Brasil Limitada – Partnership
Sabero Organics Gujarat Limited
Sabero Europe BV
Sabero Australia Pty. Ltd.
Sabero Organics America SA
Sabero Argentina SA
Sadashiva Sugars Ltd.
Parry America Inc.
Annual Report 2011-12
87
Relationship Name of the Parties
Fellow Subsidiaries Parrys Investments Limited
Parrys Sugar Limited
Parry Infrastructure Company Private Limited
Parry Phytoremedies Private Limited
US Nutraceuticals Inc.
Parry Agrochem Exports Limited
Valensa Europe AG
La Belle Botanics LLC
Key Management Personnel Mr. D. Kumaraswamy
ii. Summary of transactions with the above related parties are as follows:
Nature of the Transaction 2012 2011
Purchase of Machinery
i. Holding Company
EID Parry (India) Limited - 965.42
Purchase of Goods/Services
i. Holding Company
EID Parry (India) Limited 456.61 448.61
ii. Fellow Subsidiary
Coromandel International Limited 15.75 15.72
Sadashiva Sugars Limited 117.64 97.16
Interest on Unsecured Loan
i. Holding Company
EID Parry (India) Limited 908.45 1,029.87
ii. Fellow Subsidiary
Coromandel International Limited 16.38 2.17
Sadashiva Sugars Limited 37.17 -
Sale of Goods/service
i. Holding Company
EID Parry (India) Limited 332.89 12.79
ii. Fellow Subsidiary
Sadashiva Sugars Limited 264.02 255.26
Coromandel International Limited 55.75 40.20
Unsecured loans taken
i. Holding Company- EID Parry (India Limited) 3,000.00 23,997.16
Parrys Sugar Industries Limited
88
Nature of the Transaction 2012 2011
ii. Fellow Subsidiary- Coromandel International Limited 2,000.00 900.00
iii. Fellow Subsidiary- Sadashiva Sugars Limited 1,500.00 -
Issue of Preference Shares
i. Holding Company- EID Parry (India Limited) 2,500.00 7,500.00
Remuneration
Key Management Personnel
Mr D. Kumaraswamy 71.30 68.50
Balance Payable /(recoverable) at the end of the year:
i. Holding 15,859.61 15,802.97
ii. Fellow Subsidiaries (65.23) 43.12
iii. Individuals exercising control or signifcant infuence and their relatives - -
iv. Enterprises where Individuals exercising control or signifcant infuence
over the company have signifcant infuence
- -
45. Previous year’s fgures have been regrouped/reclassifed to conform to Current year’s classifcation.
46. Previous fnancial year was for a period of ffteen months, whereas 2011-12 is for a period of nine months and hence
fgures are not comparable.
For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
89
Consolidated Cash Flow Statement for the nine months period ended March 31, 2012
` In Lakhs
2012 2011
A. Cash Flow from Operating Activities
Net Proft/(Loss) before Taxation (2,014.90) (10,453.62)
Adjustments for:
Depreciation 2,349.96 3,665.80
Bad debts written of - -
Provision for doubtful advances - -
Interest received (5.75) (53.04)
Interest and fnance charges 5,178.17 7,823.24
Provisions no longer required written back (9.27) (24.44)
(Proft) / Loss on sale of fxed assets 2.71 7,515.82 2.25 11,413.81
Operating proft/(loss) before working capital changes 5,500.92 960.19
Adjustments for:
Trade and other receivables (4,142.52) (1,399.30)
Inventories (5,201.78) (3,599.93)
Trade and other payables 12,995.13 3,650.83 (2,539.20) (7,538.43)
Cash generated from/ (used in) operations 9,151.75 (6,578.24)
Interest paid (4,323.32) (6,809.91)
Income taxes paid - 331.42
Net cash from / (used in) operating activities 4,828.43 (13,056.73)
B. Cash from Investing Activities
Purchase of Fixed assets (5,805.49) (2,419.51)
Proceeds from sale of fxed assets 6.96 4.51
Investments in Equity shares of Subsidiaries - -
Proceeds from sale of investments - -
Proceeds from transfer of Aircraft business - -
Interest / dividends received 6.85 40.75
Net cash from / (used in) investing activities (5,791.68) (2,374.25)
C. Cash Flow from Financing Activities
Proceeds from issuance of Share Capital 2,500.00 7,500.00
Proceeds from Short Term loans 16,500.00 28,897.16
Repayments of Short Term loans (22,405.23) (8,400.00)
Proceeds from Long Term loans 5,500.00 59,865.19
Repayment of Long Term loans (671.09) (71,934.84)
Dividend Paid (10.29) (0.06)
Net cash from / (used in) fnancing activities 1,413.39 15,927.45
Net Change In Cash And Cash Equivalents 450.14 496.47
Cash And Cash Equivalents - Opening Balance 979.78 483.31
Cash and Cash Equivalents transferred pursuant to Sale of
Aircraft Division
- -
Cash And Cash Equivalents - Closing balance 1,429.92 979.78
[Refer Note 3 Below ]
Notes:
1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2012 and the
related Proft and Loss Account for the nine months period ended on that date.
2. The above Cash fow statement has been prepared under the “Indirect Method” as set out in Accounting Standard - 3 on
Cash fow Statements, as notifed under Section 211 (3C) of the Companies Act, 1956.
3. Cash and Cash Equivalents - closing balance include balances aggregating to `46.57 Lakhs [2011: `56.86 Lakhs] with
Scheduled banks in respect of unclaimed dividend, which are not available for use by the Company.
4. Previous year’s fgures have been regrouped wherever necessary in order to conform to this year’s presentation.
This is the Cash Flow Statement referred to in our report of even date For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Parrys Sugar Industries Limited
90
Statement pursuant to general exemption provided under
Section 212 (8) of the Companies Act, 1956 relating to
subsidiary company.
Name of the Subsidiary Company: M/s Alagawadi Bireshwar Sugar Pvt. Ltd.
(` in Lakhs)
Particulars 2011-12 ** 2010-11*
Share capital 102.22 102.22
Reserves & Surplus - -
Total Assets 1,429.93 1,414.88
Total Liabilities 1,429.93 1,414.88
Total Turnover - -
Proft/Loss) Before Tax (1.97) -
Provision for Tax - -
Proft/Loss After Tax (1.97) -
Proposed Dividend - -
Investments - -
* For the 15 months period ended June 30, 2011
** For the 9 months period ended March 31, 2012.
Parrys Sugar Industries Limited
Regd. Ofce: Venus Building, 3rd Floor, 1/2 Kalyanamantapa Road, Jakkasandra,
Koramangala, Bengaluru - 560034
ATTENDANCE SLIP
(Please complete this Attendance Slip and hand
it over at the entrance of the meeting hall)
Name & Address of the Member Registered Folio No. Client ID & DP ID No. No. of shares held
I hereby record my presence at the Annual General Meeting of the Company held on Thursday, the July 26, 2012.
SIGNATURE OF THE MEMBER OR PROXY ATTENDING THE MEETING
If member, please sign here If Proxy, please sign here
Note: Members are requested to bring their copy of the AGM Notice to the Meeting as the same will not be circulated at the Meeting.
Parrys Sugar Industries Limited
Regd. Ofce: Venus Building, 3rd Floor, 1/2 Kalyanamantapa Road, Jakkasandra,
Koramangala, Bengaluru - 560034
PROXY FORM
Folio No. ....................................... Client ID No. & DP ID No. ...................................................
I/We ..................................................................................................................... of ..........................................................................................................................
being a Member/Members of Parrys Sugar Industries Limited, hereby appoint .......................................................................................................... of
.............................................................................................................................. or failing him/her ................................................................................................
of .......................................................................................................................... as my/our Proxy to attend and vote for me/us on my/our behalf at the
Annual General Meeting of the Company to be held on Thursday, the July 26, 2012 at 10.30 A.M. and at any adjournment thereof.
Signed .........................................
Date ..............................................
Note: The Proxy form duly completed must be deposited at the Registered Ofce of the Company not less than 48 hours before the time
of holding the meeting. The Proxy need not be a Member of the Company.
Afx
Revenue
stamp
PARRYS SUGAR INDUSTRIES LTD.
ANNUAL REPORT 2011 - 2012
PARRYS SUGAR INDUSTRIES LTD.
Registered Office : 3
rd
Floor, 1/2 Kalayanamantapa Road,
Jakkasandra, Koramangala, Bengaluru - 560034
Ph : 080 4900 6666 Fax : 080 4900 6600.
doc_998450061.pdf
Sugar Industry is the second largest agro-based industry, next only to the textile industry and India is one of the largest producers and consumers of sugar in the world. The Indian Sugar Industry is playing a pivotal role in rural development, supporting over 50 million sugarcane farmers, their dependents and a large mass of agricultural labourers involved in sugarcane cultivation, harvesting, machine manufacturing etc. constituting about 7.5% of the rural population.
PARRYS SUGAR INDUSTRIES LTD.
ANNUAL REPORT 2011 - 2012
PARRYS SUGAR INDUSTRIES LTD.
Registered Office : 3
rd
Floor, 1/2 Kalayanamantapa Road,
Jakkasandra, Koramangala, Bengaluru - 560034
Ph : 080 4900 6666 Fax : 080 4900 6600.
Annual Report 2011-12
1
Contents
Corporate Information ........................................................................................................................................................... 2
Notice ......................................................................................................................................................................................... 3
Directors’ Report ...................................................................................................................................................................... 5
Management Discussion and Analysis ............................................................................................................................... 14
Report on Corporate Governance ...................................................................................................................................... 20
Auditors’ Report ...................................................................................................................................................................... 34
Balance Sheet ........................................................................................................................................................................... 38
Statement of Proft and Loss ................................................................................................................................................. 39
Notes to Accounts ................................................................................................................................................................... 40
Signifcant Accounting Policies and Notes on Accounts ............................................................................................... 50
Cash Flow Statement .............................................................................................................................................................. 62
Consolidated Accounts
Auditors’ Report ...................................................................................................................................................................... 63
Balance Sheet ........................................................................................................................................................................... 64
Statement of Proft and Loss ................................................................................................................................................. 65
Notes to Accounts ................................................................................................................................................................... 66
Signifcant Accounting Policies and Notes on Accounts ............................................................................................... 76
Cash Flow Statement .............................................................................................................................................................. 89
Statement pursuant to general exemption provided under Section 212 (8) of the Companies Act, 1956 ..... 90
Parrys Sugar Industries Limited
2
Corporate Information
Board of Directors S. Sandilya , Chairman
D. Kumaraswamy, Managing Director
K. Balasubramanian
K. Ramadoss
V. Ravichandran
N. Srinivasan
Company Secretary B. M. Rath
Registered Ofce Venus Building, 3rd Floor,
1/2 Kalyanamantapa Road
Jakkasandra, Koramangala
Bengaluru - 560 034
Auditors R.G.N Price & Co.
Bankers State Bank of India
Axis Bank Ltd.
ICICI Bank Ltd.
Investor Contacts
Registrar & Transfer Agents
Company
Karvy Computershare Pvt. Ltd.
Unit: Parrys Sugar Industries Limited
Plot No. 17 to 24, Vittal Rao Nagar
Madhapur, Hyderabad – 500081
Tel.: +91 40 44655000
Fax: +91 40 23420814
E-mail: [email protected]
B.M. Rath
General Manager (Legal) & Company Secretary
Tel: +91 80 49006666
Fax: +91 80 49006600
E-mail: [email protected]
Website: www.parrysugar.in
Annual Report 2011-12
3
Notice
Notice is hereby given that the twenty-sixth Annual General Meeting of Parrys Sugar Industries Limited will be
held on Thursday, July 26, 2012 at 10.30 A.M. at Khincha Hall, Bharatiya Vidya Bhavan, Race Course Road,
Bengaluru-560001, to transact the following businesses:
Ordinary Business:
1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2012, the Statement of Proft and Loss for the
period ended as on that date and the reports of the Directors and the Auditors thereon.
2. To appoint a Director in place of Mr. K. Ramadoss, who retires by rotation, and being eligible ofers himself for re-
appointment.
3. To appoint a Director in place of Mr. V. Ravichandran, who retires by rotation, and being eligible ofers himself for re-
appointment.
4. To appoint M/s. R.G.N Price & Co., Chartered Accountants as Auditors of the Company for the period commencing from
the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting and to fx their
remuneration.
To consider and if thought ft, to pass, with or without modifcation(s), the following resolution as an Ordinary Resolution:
“RESOLVED THAT M/s. R.G.N Price & Co., Chartered Accountants, bearing Registration No. 002785 S with the Institute of
Chartered Accountants of India, be and they are hereby appointed as Auditors of the Company to hold ofce from the
conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting on such remuneration
as may be determined by the Board of Directors of the Company”.
By Order of the Board of Directors
Chennai B. M. Rath
April 24, 2012 Company Secretary
Notes:
1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to
appoint a proxy to attend and vote, instead of himself / herself and such proxy need not be a member of
the Company. However, the duly flled in and signed proxy form(s) in order to be valid, shall be lodged
with the Company at its Registered Ofce not less than forty-eight hours before the commencement of
the Meeting.
2. Corporate Members are requested to send a duly certifed copy of the Board Resolution authorizing their representative(s)
to attend and vote on their behalf at the Meeting.
3. The Register of Members and the Share Transfer Books of the Company will remain closed from Wednesday, the 18th July,
2012 to Thursday, the 26th July, 2012, both days inclusive.
4. Members holding shares in electronic form are requested to intimate immediately any change in their address or bank
mandates to their Depository Participants with whom they are maintaining their demat accounts. Members holding
shares in physical form are requested to advise any change in their address immediately to the Company/Registrar and
Transfer Agent M/s Karvy Computershare Pvt. Ltd. (Karvy).
5. Members desiring any information as regards to the Accounts and operations of the Company are requested to send
their queries at least 7 days before the date of the meeting to the Company alongwith their email Id so that the desired
information may be made available at the Meeting or sent to the members after the meeting.
Parrys Sugar Industries Limited
4
6. Members who have not yet encashed their dividend warrant(s) for the fnancial year 2004-05, are requested to make
their claims without any delay to Karvy. It may be noted that the unclaimed/unpaid dividend for the fnancial year 2004-
05 declared on August 20, 2005 can be claimed by the Members by August 19, 2012. Members attention is particularly
drawn to the Corporate Governance section of the Annual Report in respect of unclaimed dividend.
7. As per the provisions of Section 109A of the Companies Act, 1956, nomination facility is available to the members in
respect of the equity shares held by them. Nomination forms are available and can be obtained from the RTA.
8. Detailed information regarding the Stock Exchanges where the equity shares of the Company are listed, along with their
address and the stock code given to the Company by the respective Stock Exchanges are indicated in the Corporate
Governance Report, forming part of the Directors’ Report.
9. Securities and Exchange Board of India has mandated the submission of Permanent Account Number (PAN) by every
participant in the securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN
to their Depository Participant with whom they are maintaining their demat accounts. Members holding shares in physical
form can submit their PAN details to the Company/Karvy.
10. Members holding shares in physical form are requested to consider converting their holding to dematerialised form
to eliminate all risks associated with physical shares and for ease in portfolio management. Members can contact the
Company or karvy for assistance in this regard.
11. The profle of the Directors seeking re-appointment is indicated in the Corporate Governance Report.
12. Members are requested to bring their copy of Annual Report together with the notice for the meeting. In order to enable
us to register your attendance at the venue of the Meeting, we request you to please bring your folio number/Client Id /
DP Id.
13. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled
to vote.
14. Members who hold shares in physical form in multiple folios in identical names or joint holding in the same order of
names are requested to send the share certifcates to Karvy for consolidation into a single folio.
15. The Ministry of Corporate Afairs (vide circular Nos. 17/2011 and 18/2011 dated April 21, 2011 and April 29, 2011
respectively), has undertaken a ‘Green Initiative in Corporate Governance’ and allowed companies to share documents
with its shareholders through electronic mode. A recent amendment to the Listing Agreement with the Stock Exchanges
permits companies to send soft copies of the Annual Report to all those shareholders who have registered their email
address to the said purpose. Members are requested to support this Green Initiative by registering/updating their email
addresses for receiving electronic communication.
By Order of the Board of Directors
Chennai B. M. Rath
April 24, 2012 Company Secretary
Annual Report 2011-12
5
Directors’ Report
Your Directors have pleasure in presenting their 26th Annual Report together with the audited fnancial statements for the
Financial Year (9 months) ended 31st March 2012.
The fnancials for the year 2011-2012 are summarized below.
(` in Lakhs)
2011-12
(9 months)
2010-11
(15 months)
Revenue from operations 46739.09 41784.06
Other Income 5.75 10.61
Total Income 46744.84 41794.67
Proft before Interest and Depreciation 5515.20 1035.42
Interest 5178.17 7823.24
Depreciation 2349.96 3665.80
(Loss) before taxation (2012.93) (10453.62)
Provision for tax:
– Current
– Deferred Tax
-
(1375.60)
(123.97)
(862.24)
(Loss) after Tax (637.33) (9467.41)
CHANGE IN FINANCIAL YEAR
The fnancial year 2010-11 of the Company was extended up to 30th June 2011. Consequently the current fnancial year of the
Company is for a period of 9 months ended on 31st March 2012 and hence not comparable with the results of the previous
fnancial year 2010-2011 which was for a 15 months period.
DIVIDEND
In view of the losses incurred, your Board is unable to recommend any dividend for the fnancial year ended 31st March 2012.
COMPANY PERFORMANCE
During the year under review, your Company’s total income was ` 46744.84 lakhs as against ` 41794.67 lakhs in the previous
year. The proft before interest and depreciation was ` 5515.20 lakhs vs. ` 1035.42 Lakhs of last year. The interest cost was
` 5178.17 Lakhs vs ` 7823.24 Lakhs last year. During the year the operations of the Company improved across all parameters.
The cane crushed was higher, the average recovery was higher, the Company could mobilise harvesting labour in time
leading to consistent and continuous operation at all the units. The capacity enhancement at Haliyal and Ramdurg and
debottlenecking of the facilities helped the Company to achieve sustained performance during the current sugar season.
The operations at Sankili was stabilized.
The sugar prices which showed an increasing trend till the start of season 2011-12 in October 2011 fell once new sugar started
coming to the market and remained sluggish till March 2012 due to anticipated higher sugar output during sugar year 2011-
12. With the close of season, prices have started showing some improvement. The sugar production in the Country witnessed
a 16% percent growth over the last two years driven mainly by improved cane acreage in response to higher cane prices. In
line with the industry in North Karnataka, the Company had to pay ` 200 per tonne of cane as additional cane price for the
cane supplied in Karnataka units during the previous sugar season. The continued increase of cane price year after year with
no signifcant and proportionate increase in sugar sales price is a challenge for the sugar industry in the long term to sustain
performance. The Government’s continued control over the sugar industry through release mechanism, cane price and other
restrictions afect the Industry.
Parrys Sugar Industries Limited
6
Sugar Division
In Karnataka, the unit at Haliyal performed signifcantly better with improved reliability of machinery and equipment. The unit
recorded a peak recovery of 13.3%, which is the highest in Karnataka and average recovery of 12.2%. The unit crushed a total
quantity of 5.52 lakhs MT of Cane vs. 3.48 Lakhs MT last year, an increase of 59%. The average cane crushed per day was 3248
MT with the crushing touching a maximum of 4835 MT in a particular day. The crushing of cane in the month of March 2012
was afected due to the limited availability of cane and drop in the cane yield.
The performance of the plant at Ramdurg was also signifcantly better than last year with a crushing of 5.39 Lakhs MT of
cane vs 3.95 Lakhs MT last year, an increase of 36%. The average annual recovery was at 12.10% and the crushing touched
a maximum of 4000 MT in a particular day. The Company has already placed order for the enhancement of its cogen unit at
Ramdurg to 13 MW and the enhanced capacity is expected to be operational before the next crushing season resulting in
higher earnings for the unit.
The performance of the plant at Sankili was also signifcantly better than last year with a crushing of 5.55 Lakhs MT of cane vs
3.67 Lakhs MT last year, an increase of 51%. The average annual recovery was at 9.88% and the crushing touched a maximum
of 4348 MT in a particular day.
During the year, the Company crushed a total 16.45 Lakhs MT of cane, produced 18.77 Lakhs qtls. of sugar as against 11.11
Lakhs MT of cane, 11.95 Lakhs qtls. of sugar during the previous year, an increase of 48% and 58% respectively. The average
recovery rate was 11.41% vs 10.76 % last year.
The major challenge for the Company for the future is to further improve operating efciencies and improve the quality of output.
Distillery Division
The distillery division produced 186 Lakh liters of industrial Alcohol /Ethanol/ENA as against 139 Lakh litres in the previous
year registering an increase of 34%. In value terms, the sale of industrial alcohol/Ethanol/ENA during the year was ` 51.22
Crores as against ` 41.88 Crores in the previous year registering an increase of 22%. Increase in production and sale was due
to higher cane crushing resulting in higher production of molasses. The sale of ENA/Ethanol produced at Distilleries fetches
better revenue and can act as a stabilizer to the threat of cyclicality of sugar business. The Company is availing the Certifed
Emission Reduction (CER) benefts for its distillery unit at Sankili, Andhra Pradesh under Clean Development Mechanism
(CDM) of United Nations Framework Convention on Climate Change (UNFCCC).
Power Division
The total power generated by our Co-generation plants were 1345 Lakhs units as against 1267 Lakhs units in the previous
year mainly due to availability of more bagasse from higher sugarcane crushing. The Company has not purchased any coal
during the year due to maximum availability of bagasse thereby substantially improving the performance and operations of
its cogen units. The sale of power was at ` 2842 Lakhs in the current year as against ` 2263 Lakhs recorded in the previous
year registering an increase of 26%. The revenue on power sales was better than last year due to higher export coupled with
higher rate on account of the sale through power exchange by the Haliyal unit which was earlier under the power purchase
agreement with the State Government Utility. The issuance of Order by the Government of Karnataka under Section 11 of the
Electricity Act, 2003 mandating to supply to the State Government utilities at a remunerative rate had also contributed to the
revenue. At Sankili the Company continues to reel under pressure due to the lower tarif ofered by the State Government
under the long term Power Purchase Agreement entered into by the Company. The dispute pertaining to the revision of power
tarif from the Year 2004 as pronounced by the State Commission is pending before the Appellate Tribunal for Electricity (ATE).
Any favourable Order by the ATE will be in the interest of the Cogen power producers in the state of Andhra Pradesh. Increase
in power generation capacity, both during the season and of season shall be the future thrust area for the Company.
The Government has launched the Renewable Energy Certifcate (REC) mechanism to mainstream the renewable energy
sources across the nation. Though REC is a market based instrument enabling the obligated entities to meet their Renewable
Purchase Obligation (RPO) and in the process enabling the renewable energy producers to get higher revenue through sale
of such Certifcates, the regulations framed by the State Electricity Commissions pose a hindrance to avail such beneft. Going
Annual Report 2011-12
7
forward it is expected that the various State Commissions will modify the regulations in due course to enable all renewable
energy producers to take advantage and beneft from the REC Mechanism.
CHANGE IN CAPITAL STRUCTURE
During the year, the Company allotted 250 Lakhs, 8% cumulative preference shares of ` 10/- each to the Holding Company,
E.I.D. - Parry (India) Ltd. aggregating to ` 25 Crores. Consequently, the paid up share capital of the Company has increased to
` 134.08 Crores w.e.f. 30th August, 2011.
SOCIAL RESPONSIBILITY
The Company in collaboration with Help Age India, have launched a project to run a Mobile Medicare Unit in and around
Rajam, Srikakulam District, Andhra Pradesh to provide basic and essential medicare, to the poor, needy and elderly population
of the society irrespective of caste, creed or religion. At Sankili, the Company is providing assistance to children of sugar cane
farmers for quality education by rembursing their school fees. The Company has taken measures to provide drinking water
facilities in the villages in and around its command area. During the year, medical facilities were provided and blankets were
distributed during the winter to the harvesting and transportation labourers working in the cane feld. The Company is in the
process of improving the infrastructure to provide better facilities to these migrant labourers and their children in the feld of
education and health care. The Company is also rembursing the collage fees, cost of books etc., for one child in the family of
those who have sold land to the company in Haliyal.
SUBSIDIARY COMPANY
The Company’s wholly owned subsidiary, Alagawadi Bireshwar Sugars Pvt. Ltd. (ABSPL), proposes to set up an integrated
sugar plant at Raibagh, Karnataka and the land acquisition process has been completed. The Company is in the process of
conversion of land and obtaining various other clearances/approvals.
SUBSIDIARY ACCOUNTS
In terms of the Circular No.: 2 /2011 dated 8th February 2011 issued by the Central Government u/s 212(8) of the Companies
Act, 1956, copies of the Balance Sheet, Proft & Loss Account, and Reports of the Board and the Auditors of the Company’s
wholly owned subsidiary, Alagawadi Bireshwar Sugars Pvt. Ltd. have not been attached to the Balance Sheet of the Company
as at 31st March 2012.
However, as directed by the Central Government, the fnancial data of the subsidiary has been separately furnished forming
part of this Annual Report. These documents will also be available for inspection at the Registered Ofce of the Company
and of the concerned subsidiary company during working hours up to the date of the Annual General Meeting. However,
the related detailed information of the Annual Accounts of the Subsidiary Company will be made available to the Holding
Company’s shareholders seeking such information at any point of time. The Annual Accounts of the Subsidiary Company will
also be kept for inspection by the investors at the Registered Ofce of the Company and that of the Subsidiary Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting
Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors’ Report thereon form
part of the Annual Report.
REPORT TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION
As the Members are aware, a meeting of the Members was convened on November 17, 2011 to consider the erosion in net
worth of the Company as on June 30, 2011 by more than 50% of the peak net worth during the immediately preceding
four fnancial years and to report the fact of such erosion to the Board for Industrial and Financial Reconstruction (“BIFR”)
as required under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985. Accordingly, the Company has
reported the fact of such erosion to the BIFR”.
CREDIT RATING
During the year, rating agency ICRA has reafrmed the Long term ratings at [ICRA] BBB+ (Pronounced as ICRA triple B Plus)
and Short term ratings at [ICRA] A2 (Pronounced as ICRA A two). The aforesaid ratings are valid till January 2, 2013.
Parrys Sugar Industries Limited
8
DIRECTORS
Mr. K. Ramadoss and Mr. V. Ravichandran, Directors retire by rotation in terms of Article 108 of the Articles of Association of the
Company and being eligible, ofers themselves for re-appointment. A brief resume, expertise and details of other directorships
of Mr. K. Ramadoss and Mr. V. Ravichandran are provided in the Corporate Governance Report.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 and on the basis of explanation given by the Executives of the
Company and also subject to disclosures in the Annual Accounts, your Directors to the best of their knowledge and belief
confrm as under:
i. that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with
proper explanations relating to material departures.
ii. that the Directors had 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 afairs of the Company at the
end of the fnancial year and of the loss of the Company for that period.
iii. that the Directors had taken proper and sufcient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
iv. that the Directors had prepared the annual accounts for the fnancial year ended 31st March 2012 on a going concern
basis.
FIXED DEPOSITS
During the year under review, your Company has neither invited nor accepted any fxed deposits from the public as per the
provisions of Section 58A of the Companies Act, 1956. As such, no amount of principal or interest was outstanding as on the
date of the Balance Sheet.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate
Governance Requirements as set out by SEBI and is in conformity with most of the requirements of the voluntary guidelines
on Corporate Governance issued by the Ministry of Corporate Afairs.
CEO/CFO CERTIFICATION
Mr. D. Kumaraswamy, Managing Director and Ms. G. Jalaja, Chief Financial Ofcer, have given a certifcate to the Board as
contemplated under Clause 49 of the Listing Agreement with the Stock Exchanges.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 205C of the Companies Act, 1956, an amount of ` 10.09 Lakhs being the unclaimed dividend was transferred
during the year to the Investor Education and Protection Fund established by the Central Government.
PERSONNEL RELATIONS
Your directors hereby place on record their appreciation for the dedication and competence of all the executives, staf and
workers of the Company. During the year under review, relations between the employees and the management continued to
remain cordial.
CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The information relating to conservation of energy, technical absorption and foreign exchange earnings and outgo pursuant
to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of
Annual Report 2011-12
9
Addendum to the Directors’ Report
The Board of Directors at their meeting held on April 25, 2012 have approved a Scheme of Arrangement (Demerger) between
the Company and the Holding Company, .E.I.D.-Parry (India) Ltd., (EID Parry) under Sections 391 to 394 of the Companies Act,
1956 for transfer and vesting of the Company’s manufacturing facilities located at Haliyal and Sankili, to and in EID Parry, w.e.f
1st April 2012 subject to approval of the shareholders and various other statutory and regulatory approvals.
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 25, 2012 Chairman
Directors) Rules, 1988 is given in the Annexure forming part of this Report.
AUDITORS
The Auditors, M/s. R.G.N Price & Co., retire at the conclusion of the ensuing Annual General Meeting. The Auditors have
confrmed their willingness to act as Auditors of the Company for the fnancial year 2012-13 and have confrmed that their
appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.
COST AUDITORS
M/s Narasimha Murthy & Co., Cost Accountants, were appointed as the Cost Auditors for conducting the cost audit of Sugar,
Distillery and Cogen divisions of the Company for the fnancial year 2011-12. M/s Narasimha Murthy & Co. have confrmed their
willingness to act as Cost Auditors of the Company for the fnancial year 2012-13 and have confrmed that their appointment,
if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 is given in Annexure forming part of this Report.
ACKNOWLEDGEMENT
Your directors acknowledge and express their grateful appreciation for the co-operation and assistance received from Banks,
Government Authorities, Customers, Farmers, Vendors and also the Members for the confdence reposed by them in the
management of the Company and for their continued support and co-operation. Your Directors also wish to place on record
their deep sense of appreciation for the committed services by the executives, staf and workers of the Company.
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 24, 2012 Chairman
Parrys Sugar Industries Limited
10
Information in accordance with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the
9 months period ended 31st March 2012
A. Conservation of Energy
a. Energy Conservation Measures Taken
Haliyal Plant
? Installed one VFD Zero Discharge System (ZDS), boiler Forced Draft
(FD) fan in Distillery for ease of operation and energy conservation
? Introduction of Dynamic juice heater for heating scalding juice with
third body vapour in place of second body vapour.
? Other steam saving measures such as condensate fash vapour
recovery system and introduction of heat recovery for super heat
wash water system.
Ramdurg Plant
? Installation of Dynamic juice heater for heating raw juice with third
body vapour in place of second body vapour.
? Installed Vapour line juice heater between ffth body & condenser.
? Installed Variable Frequency Drives (VFD) for Induced Draft (ID)
fans, clear juice, Sulpher juice & raw juice pumps.
? Installed VFD for bagasse extractor in both boilers
? Installed Planetary gear box for bagasse elevator, Main Bagasse
Carrier & Rake Type Inter Carrier.
Sankili Plant
? Installed Duplex Heater
? Installed VFD for molasses pump
? Installed NHEC Direct Current drives
b. Additional investments and proposals,
if any, being implemented for
reduction of consumption of energy
Nil
c. Impact of the measures at (a) and
(b) above for reduction of energy
consumption and consequent impact
on the cost of production of goods
Haliyal Plant
Better control over operating parameters. Better control over steam
consumption per ton of cane & power per ton of cane.
Ramdurg Plant
Better control over steam consumption per ton of cane & power per ton
of cane.
Sankili Plant
Better control over operating parameters. Better control over steam
consumption per ton of cane & power per ton of cane.
d. Total Energy Consumption and energy
consumption per unit of production
As per Form A attached.
B. Technology absorption
Eforts made in technology absorption As per Form B
Annual Report 2011-12
11
C. Foreign Exchange Earnings and Outgo: (` In Lakhs)
2011-12 2010-2011
a. Activities relating to exports; initiatives taken to increase exports; development
of new export markets for products and services; and export plans;
Nil Nil
b. Total foreign exchange used and earned.
Foreign Exchange used
a) Capital Items
b) Stores & Spares
c) Travel Expenses
d) Consultancy Fees
–
9.82
0.69
–
12.50
–
1.25
0.68
Foreign Exchange earned
Sale of CER 70.13 –
FORM A
Form for Disclosure of particulars with respect to Conservation of Energy
POWER AND FUEL CONSUMPTION 2011-12 2010-11
1. Electricity
(a) Purchased units 3,189,523 32,34,327
Amount (` in lakhs) 95.93 113.48
Rate/ Unit (`) 3.01 3.51
(b) Own Generation
(i) Through Diesel Generator
Units 255,789 2,12,219
Diesel Consumed (Ltrs.) 115,554 89,851
Cons. value of diesel (` in Lakhs) 53.60 37
Units per Litre of Diesel Oil 2.21 2.36
Cost / Unit (`) 20.95 17.63
(ii) Through Steam Turbine
Units generated 105,124,036 4,59,33,410
Cost / Unit (`) 2.03 5.23
2. Furnace Oil
Units (Litre) n.a. n.a.
Amount (`) n.a. n.a.
Cost / Unit (`) n.a. n.a.
3. HSD Oil
Units (Litre) 14,844.00 4,247.67
Amount (` in Lakhs) 6.80 17.86
Rate / Unit (`) 44.65 42.00
CONSUMPTION PER UNIT OF PRODUCTION/SUGAR (QTL.)
1. Electricity (Units) 75.76 89.44
2. Furnace Oil (Litre) – Nil
3. HSD Oil (Litre) – 0.1
Parrys Sugar Industries Limited
12
FORM B
(See Rule 2)
Form for disclosure of particulars with respect to technology absorption.
Research and development (R & D)
1. Specifc areas in which R & D carried out by the
company.
Trial done on wood chip in place of coal in distillery boiler
2. Benefts derived as a result of the above R & D Coal consumption per day to a level of 200 MT could be reduced.
Distillery condensate treatment system for handling liquid
efuent and recirculation.
3. Future plan of action
4. Expenditure on R & D :
(a) Capital
(b) Recurring
(c) Total Nil
(d) Total R & D expenditure as a percentage of total
turnover
Technology, absorption, adaptation and innovation
1. Eforts, in brief, made towards technology absorption,
adaptation and innovation.
Introduction of automation and instrumentation equipment
1. Cane difuser in sugar unit
2. Spent wash boiler in zero discharge system in distillery
2. Benefts derived as a result of the above eforts,
e.g., product improvement, cost reduction, product
development, import substitution, etc.
1. Cane difuser could give good improvement in sugar
recovery from a level of 10 – 11 % to 12 % and above
2. Productivity could be raised in distillery from 41 lac lit. to
86 lac lit.
3. In case of imported technology (imported during
the last 5 years reckoned from the beginning of the
fnancial year), the following information may be
furnished:
(a) Technology imported
(b) Year of import
(c) Has technology been fully absorbed?
(d) If not fully absorbed, areas where this has not
taken place, reasons therefor and future plans of
action.
Nil
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 24, 2012 Chairman
Annual Report 2011-12
13
Information as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 and forming part of
Director’s Report for the Financial Year (9 months) ended 31st March 2012.
Name/Age Designation
and Nature of
Employment
Remuneration
(` in Lacs)
Qualifcations/
Experience
Date of
Commencement
of employment
Previous
Employment
D. Kumaraswamy Managing
Director
71.30 Bachelor of Commerce, Chartered
Accountant & Company Secretary
35 years
28.08.2010 E.I.D.-Parry (India)
Ltd.
? The nature of appointment is contractual.
? Mr. D. Kumaraswamy is not related to any Directors of the Company.
? Neither Mr. D. Kumaraswamy nor his spouse or dependent children hold any shares of the Company.
? Remuneration as shown above includes salary, allowances, incentive, Company’s contribution to Provident Fund,
Superannuation Fund and Gratuity Fund, Medical facilities and perquisites valued in terms of actual expenditure incurred
by the Company in providing the benefts excepting in case of certain expenses where the actual amount of expenditure
cannot be ascertained with reasonable accuracy, and in such cases, notional amount as per Income-tax Rules has been
adopted.
For and on behalf of the Board of Directors
Chennai S. Sandilya
April 24, 2012 Chairman
Parrys Sugar Industries Limited
14
Management Discussion and Analysis
INDUSTRY STRUCTURE AND DEVELOPMENT
Sugar Industry is the second largest agro-based industry, next only to the textile industry and India is one of the largest
producers and consumers of sugar in the world. The Indian Sugar Industry is playing a pivotal role in rural development,
supporting over 50 million sugarcane farmers, their dependents and a large mass of agricultural labourers involved in
sugarcane cultivation, harvesting, machine manufacturing etc. constituting about 7.5% of the rural population. In addition,
about 0.5 million skilled and semiskilled workers, mostly from the rural areas are engaged in the sugar industry. Thus, the sugar
industry has been a focal point for socio-economic development in the rural areas by mobilizing rural resources, generating
employment & higher income, besides giving a fllip to transport and communication facilities. The sugar industry in India is
highly fragmented. Since sugarcane is the primary raw material from which sugar is manufactured in India, sugar mills are
set up in cane growing states such as Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and Gujarat. These
six states together account for around 85-90 percent of the sugarcane production in the country. Hence, sugar capacities and
production are concentrated in these states.
The sugarcane crop grows for 8-14 months, depending on the climate and the seeds used. Factors that determine the yield
and quality of sugarcane are temperature, rainfall and soil. Sugarcane is usually grown in a frost-free, warm and humid
climate. In India, around 90 per cent of the sugarcane cultivation happens in irrigated land. In a year of surplus sugarcane
production, sugarcane crushing continues beyond April and extends up to June/July, when sugar recovery declines and
molasses formation increases signifcantly.
In most parts of the world, sugarcane is handled manually and involves extensive labour. However, this trend has been changing
with the increasing need to mechanize the operations to improve the recovery rate. Given the nature of regulations in the
sugar industry, there are no foreign sugar producers in India. Industrial consumers and households in the country determine
the growth of the domestic sugar consumption. Population growth and relative prices of sugar vis-a-vis substitutes such as
gur/khandsari determine the direct demand for either of the sweeteners. Indirect (industrial) consumption of sugar can be
broadly classifed into bakeries, confectioneries & chocolates, soft & fruit drinks, sweetmeats, tea & cofee and other segments
like ice-creams, jams, alcoholic beverages etc. Growth in production volumes of these various segments coupled with I/O
norms (input-output) of sugar content in each of these end-use products is used to forecast growth for sugar consumption
from the industrial user segment.
The sugar supply in India also depends on various government controls on the distribution of sugar. The government controls
the sale of sugar in the open market through its regulated release mechanism. In addition to the above factors, the import and
export of sugar determine the fnal supply in the market. Sugar prices, as a result, depend on the demand-supply situation
during the year.
The sugar sector in India, hence, goes through a phase of cyclicality, primarily on account of situations of high cane pricing,
which impacts the proftability of the sugar mills as a result of which payment arrears to farmers increase. The farmers, hence,
shift from the production of cane to other competing crops, thereby impacting the sugarcane output. A typical Indian sugar
cycle goes through a phase of 1-2 years of up cycle followed by 3 years of down cycle. The Indian sugar sector currently has
500 operational mills, including a mix of private and co-operative mills. The area under sugarcane has been closely linked to
the Indian sugar cycle, though the area has registered a CAGR of 1.7% since 1950-51 to 2010-11. Sugar production, on the
other hand, has recorded a CAGR of 2.9%, primarily led by gains in productivity and irrigation facilities.
BY PRODUCTS
Molasses is a thick syrup by-product which arises from the processing of the sugarcane into sugar. In sugar factories, sugar is
crystallised from a concentrated juice in three separate stages wherein each stage results in the production of a crystallised
sugar fraction and a non-crystalline fraction or molasses fraction called molasses.
Fermentation of molasses at distilleries yields extra neutral alcohol, rectifed spirit and ethanol. Ethanol, or anhydrous alcohol,
is produced from the fermentation of molasses. It is 99.5 per cent pure alcohol. Ethanol can also be produced directly from
sugarcane, instead of through the molasses route. In India, ethanol is mostly manufactured from the ‘C’ molasses obtained
Annual Report 2011-12
15
during the process of crushing sugarcane. In Brazil, ethanol is produced directly from sugarcane. In September 2008, the
government announced a National Policy on bio-fuels which targets 20 per cent ethanol-blending by 2017. However, the
ethanol blending programme, which calls for 5 per cent blending of ethanol with petrol, has not taken of so far due to limited
feedstock availability, unattractiveness of manufacturing ethanol directly from sugarcane or C molasses, issues related to
pricing, tendering and taxation issues at the State level.
COGENERATION OF POWER
Globally, most sugar factories use bagasse to meet their electricity and steam requirements. Bagasse is burnt in boilers
which releases large amounts of heat for boiling water and generating high-pressure steam. The steam is used to drive a
turbine, which generates electricity. The residual low-pressure steam is used in the sugar making process. Cogenerated power
has environmental benefts in terms of replacing fossil fuels, and is also renewable in nature. For a sugar mill, opting for
cogeneration of power has the advantages of getting an additional stream of revenue. The mill can also partly protect itself
from the cyclical nature of sugar business. The Indian sugar industry went through a phase of backward integration in early
2000, wherein most of the large mill owners had setup co-generation capacities along with alcohol manufacturing facilities.
The renewable power capacity within India is pegged at 32% (2010) out of which, renewable other than hydro accounts for
9.88% or 16,786 MW. The sugar sector contributes 900 MW capacity out of the total of 16,786 MW with a potential to reach
21,000 MW. The Indian sugar industry over the years has tried to diversify its revenue mix from sugar to a mix of power,
sugar and alcohol. In India, the government is ofering a number of incentives to encourage investment in the bagasse-based
cogeneration projects in terms of lower fnancing rates and capital subsidies to cooperatives or public sector sugar mills.
Other benefts like accelerated depreciation, income tax holidays, reduced customs duty, central excise exemption and sales
tax exemption are also given in some States. However, the potential for bagasse-based cogeneration of power is yet to be
realised fully. Cogeneration sector growth is expected further by various regulatory measures including the renewable energy
portfolio obligation fxed under the National Action Plan for Climate Control (NAPCC) of Government of India, generic tarif
norms announced for co-generation projects; norms and pricing framework for Renewable Energy Certifcates (RECs); and
amendment of the provisions of the grid code to ensure smoother of take and transmission of power by utilities. However,
the major bottlenecks in harnessing the co-generation potential has been lack of management focus; weak fnancial position
of many sugar mills, especially smaller units including those run by the co-operative sector; and relatively unattractive tarifs.
SUGAR SCENARIO
The Indian sugar sector is highly cyclical in nature primarily on account of (i) government policy intervention and (ii) weather
conditions. The Indian sugar sector remains regulated, as far as government control is concerned, primarily on account of
following factors:
? Government intervened sugarcane pricing: The Central Government each year releases a country-wide Minimum Support
Price (MSP) for cane, which is known as Fair and Remunerative Pricing (FRP), while State Governments decided their own
MSP known as State Advisory Price (SAP). The sugar mills are expected to pay based on the SAP, wherever applicable
and FRP is for States where the state government does not declare its own prices. Given that a large proportion of rural
farmers in the key cane growing states are dependent on the sugarcane sector, the SAP is largely politicised.
? Restriction in open market sales: Sale of sugar in the open market is also restricted based on a monthly release quota system
which is fxed by the Government at mill level. Further, the government has also prescribed holding limits for industrial
users to regulate the supply in the system. Recently the Govt. has started releasing quarterly quota instead of monthly
quota.
? Levy sugar pricing: On the pricing front, the government currently has imposed a 10% levy sugar quota, wherein the mills
are supposed to sell 10% of their production to the government for distribution under the PDS system.
? Import and export restrictions: On the trading side, the import and export of sugar is regulated by the Government, wherein
Government permits are required for either importing or exporting sugar into and from the country. However, companies
are free to import sugar for re-export, whereby they convert raw sugar into white and re-export the same out of the
country without any sugar actually coming into the country.
The Indian sugar production in the past couple of years has gone through a volatile phase, primarily on account of bad
Parrys Sugar Industries Limited
16
weather conditions in 2008-09 and 2009-10. Sugar production in India fell from 28.63 Mn tonnes in 2007-08 to a low of 15.95
Mn tonnes in 2008- 09, though, it has recorded gains in subsequent years and was at 26 Mn tonnes in 2011-12.
Industry sources say that the Sugar output in India, will drop for the frst time in four years in the next season as dry weather in
some regions spur farmers to plant other crops. The harvest may total 25 million metric tons in the season beginning October
1 from as much as 26 million tons this year. The nation may continue exports for a third year as supplies from the new crop and
inventories will exceed domestic demand by about 6.5 million tons. It is expected that the surplus in 2012-2013 would not be
as large as in 2011-2012, but it will defnitely be big enough to keep world prices under pressure. Both the Thai and the Indian
crop are expected to be large in 2012-2013.
Recently, the Government of India has been actively considering partial or total de-control of the sugar industry. The Govt.
has constituted a committee headed by Economic Advisory Council Chairman, Mr. C. Rangarajan to examine issues related
to deregulating the sugar industry. The Industry has made a number of representations to the Committee for deregulation
in the area of levy mechanism, release order, packing of sugar, export of sugar, cane price fxation and remunerative prices
for co-generation and ethanol. It is expected that the de-control of the sugar sector could be in a phased manner starting
from removal of the levy price mechanism, monthly release quotas, linking of ethanol prices to petrol prices and export/
import restrictions. The decontrol of cane pricing may not come in a hurry, however, a phased manner of de-control would act
sentimentally positive for the sector.
The world sugar market continues to experience considerable price volatility. The world indicator price for raw sugar witnessed
a succession of peaks and downward corrections in 2010 before soaring to a 30-year high of USD 36.08 cts/lb (USD 795.4/t)
in February 2011. Market fundamentals driving volatile prices were large global sugar defcits in the previous two seasons
and adverse weather in a number of countries that reduced the size of the expected rebound in production to higher prices.
World sugar stocks, which had already been drawn down, fell to their lowest level in 20 years in 2010-11, supporting higher as
well as more volatile market prices. International sugar prices are expected to ease back over the remainder of 2011 and into
2011/12, as production responds around the world to recent high prices and the global balance moves into a larger surplus
that allows the start of stock rebuilding.
REVIEW OF COMPANY’S BUSINESS
The Company has three Sugar Plants located at:
(i) Sankili in Andhra Pradesh having a cane crushing capacity of 5000 tonnes per day, Co-generation capacity of 16
Megawatt (MW) and a Distillery unit capacity of 40 Kilo litres per day (KLPD). This unit commenced commercial operation
in December 1997.
(ii) Haliyal in Karnataka having a cane crushing capacity of 4000 tonnes per day (TCD) expandable to 5000 TCD, Co-generation
capacity of 24 Megawatt (MW) and a Distillery unit capacity of 45 Kilo litres per day (KLPD). This unit commenced
commercial operation in December 2008.
(iii) Ramdurg in Karnataka taken on lease from Shri Dhanalakshmi Sahakari Sakkare Karkhane Niyamat (DSSKN) having a
cane crushing capacity of 3500 TCD and Co-generation capacity of 6 MW expandable to 13 MW. This unit commenced
commercial operation in December 2008.
All the company’s sugar plants are integrated with co-generation and distillery facility except Ramdurg plant which has
6MW cogen. The Company is enhancing the cogen capacity to 13 MW at Ramdurg. The Company is continuously working
on improving operational efciencies and production techniques, benchmarking with the best in the industry. The Company
converts bagasse into electricity in its Co-generation units and processes molasses into various types of alcohol, thus
completing the value chain.
CANE AND SUPPORT TO FARMERS
Majority of the sugar facilities of the Company are located in North Karnataka, ofering the company a geographical advantage
of being in the highest sugar recovery zone in India, good soil conditions and availability of abundant water coupled with
sugarcane recovery being highest across India. North Karnataka usually gets good rainfall from June onwards during south
Annual Report 2011-12
17
west monsoon and the cane plantation starts from October to March, peak during December to February. Growers grows more
than 80% of high sugarcane verities like coc 671, co 86032 and gets average yield of 30 Mts per acre. Though the Factories
have ofcially demarcated cane command area, practically it is not enforced. Crushing starts from October and ends before
March end and during the period of excess cane, crushing lasts till April and May depending upon the available cane volume
for that particular sugar season. Most of the mills in North Karnataka, fxes cane price on their own and if the growers feel that
cane price is less, representation is made through the Government and the cane price is decided by mutual negotiations. In
Karnataka, normally the cane price is paid as frst advance immediately after harvest and the fnal cane price is paid after the
crushing is over. There has been continued increase of cane price year after year with successive governments treating this as
a populist measure with no proportionate improvement in sugar sales price which is a challenge for the sugar industry.
Cane harvest and transport arrangements lies with sugar mills and more than 60-70% of cane harvest and transport gangs
are arranged from south Maharashtra districts every year. Mills have to engage dedicated cane team for this arrangement.
This is one of the major areas where the Company has to devote substantial eforts so that harvesting is done smoothly.
Holding these gangs and to make continuous crushing operation at optimum capacity is a great challenge. Most of the mills
do not focus much on cane development since they get good recovery because of conducive climate, good soil condition and
improved varieties of cane. The growers manage their own and grow the sugarcane without much difculty. The Company
arranges inputs like fertilizer and micro nutrients through its own depots and through agencies with help of “Mana Gromor”.
Because of climatic condition there are not much pest and diseases problems in cane cultivation in North Karnataka. During
summer, the cultivation faces early shoot borer attack. There are also micro nutrients like Zinc and iron defciencies seen in
some pockets particularly in ratoon crops. In the Company’s command area, the growers are good, hardworking and harvest
their cane in time. In the state of Andhra Pradesh unlike Karnataka, well-disciplined cane command area prevails. In Andhra
Pradesh planting starts from December and closes by February. Like Karnataka the practice of harvest labourers also prevails
and more than 50-60 % is arranged from nearby pockets. In AP, cane price fxed as factory gate price. Growers pay cane
harvest and transport charges and also provide some portion of cane transport charges as subsidy like other Mills. Growers
are marginal, holdings are small and there is scope for further improving the cane area. For cane development, the growers
need infrastructures like wells, bore wells, micro irrigation and pump sets through medium term loan. There is a possibility of
increasing the average yield also by way of arranging inputs and working capital in time.
The Company has developed a multipronged plan through infrastructure development, quality seed nursery programme,
inputs arrangements, mechanization and technical infrastructure support to increase the availability of cane which is the
basic raw material for the manufacture of sugar and life line of any Sugar Company.
MARKETING
With increasing production in Karnataka, the Company is targeting other sugar markets besides local trade. These include
sales to institutions, retail and to sugar defcit regions primarily in and around West Bengal and Orissa. With the production
of M30 grade sugar the Company is expanding its customer base. Besides the ability to sell the higher volumes of production,
sales to these markets also has the advantage of a premium price as compared to local trade. The target markets for Extra
Neutral Alcohol (ENA) will continue to be primarily IMFLs, while Ethanol sales will be to OMCs for petrol blending and to the
Pharma Sector.
RISK MANAGEMENT
The Company has adopted a system based approach for risk management, with the clear objectives of identifcation,
evaluation, monitoring and minimization of the identifable risks. The Company has a Risk Management Committee for
assessment and evaluation of the risks associated with the business through its risk document. The management periodically
reviews the risk management framework to identify the major business risks as applicable to the Company and works out
their mitigation strategy.
The major risks faced by Sugar business are the availability of cane, regulatory risks, price of sugar and that of sugarcane.
Sugarcane is the key raw material for sugar and any difculty in getting cane at right time will have impact on the business.
Parrys Sugar Industries Limited
18
The key factors that infuence cane availability are climatic condition, availability of cane harvesting labour and farmers opting
competitive crops.
Availability of sugarcane is ensured by fostering good relationship with the cane growers. This is done by undertaking various
measures in supporting them in cultivating cane besides making payment for their supplies in time. These are in the form
of providing assistance in drip irrigation, mechanical harvesting and improved cane varieties. The company also extends
subsidies on good quality seeds, fertilisers and manure, ensures timely cane payment to farmers, timely distribution of
indents, proper surveys and incentivizing the farmers to cultivate higher volumes of cane in the Company’s command area
through various means.
The sugar industry is regulated by the Central and State Governments. Sugarcane price, known as FRP, is fxed by the Central
Government well before the advent of the season while the state government fxes the State Advised Price (SAP), always
signifcantly higher than FRP. The State Government controls the sugarcane command area while the Central Government
regulates exports and imports. The Company is in close association with the Indian Sugar Mills Association (ISMA) and The
South Indian Sugar Mills Association (SISMA), who are in the process of developing a common strategy to place appropriate
policies in for the sugar sector.
FINANCIAL PERFORMANCE
The current fnancial year is for a period of 9 months i.e. from 1st July 2011 to 31st March 2012. During the year 2011-12, the
Company has reported a proft before interest and depreciation of ` 5515.20 Lakhs. The segment-wise performance of the
Company is as under:
Product/Services 2011-12 2010-11
Sales PBIT Sales PBIT
Quantity Value (` in Lakhs) (` in Lakhs) Quantity Value (` in Lakhs) (` in Lakhs)
Sugar (Quintals) 1,589,519 40,013.30 1,341.10 12,41,396 32,768.23 (2,536.27)
Cogen (Units) 79,408,742 2,343.24 1,433.02 9,01,72,760 3,179.31 (549.46)
Distillery (Ltrs) 12,416,700 3,773.93 728.23 18,413,950 5,591.36 617.46
Finance charges
The Company had term loans and working capital borrowings aggregating to `60724.16 Laksh as on 31st March 2012. The
Company incurred fnance charges of ` 5,178.17 Lakhs during the year 2011-12 as compared to ` 7,823.24 Lakhs for the year
2010-11.
Loss after tax
The loss after tax stood at ` 6.37 Crores as against ` 94.67 Crores in the previous year.
INTERNAL CONTROL AND SYSTEMS
The Company believes that internal control is a necessary part of the principle of governance and that freedom of management
should be exercised within a framework of appropriate checks and balances. The Company remains committed in its endeavour
to ensure an efective internal control environment that provides assurance on the efciency and efectiveness of operations,
reliability of fnancial reporting, statutory compliance and security of assets. The Company has a well-established and robust
internal systems and processes in place to ensure smooth functioning of the operations. An efective internal control system,
supported by an Enterprise Resource Planning platform for all business processes, ensures that all transaction controls are
continually reviewed and adequately addressed. The control mechanism involves well documented policies, authorisation
guidelines commensurate with the level of responsibility and standard operating procedures specifc to the respective
businesses. The Company has an Internal Audit department that monitors and makes continuous assessments of the adequacy
and efectiveness of the internal controls and systems across the Company. The status of compliance with operating systems,
internal policies and regulatory requirements are also monitored. The Board, Audit Committee and the Management review
the fndings and recommendations of the Internal Audit department and take corrective actions wherever necessary.
Annual Report 2011-12
19
HUMAN RESOURCES
The company recognizes people as the primary source of its competitiveness and continues to focus on people capabilities by
leveraging technology and creating a learning environment. The Company had a total employee strength of 607 as on March
31, 2012. The Human Resources function is proactively focused to meet the vision – “To build Credible, Reliable & Capable
Human Capital to deliver superior Individual and Business performance”. In order to achieve this vision, the Company has
evolved focused HR Strategy of “Attracting, engaging, developing and retaining of people to enable the fulfllment of business
aspirations and competitive success of Parrys Sugar” and endeavor to shape its employees as a vital strategic asset and thus
has initiated on a priority basis various HR initiatives. There is a major thrust on realigning, integrating and strengthening of
people processes to cater turn-around and debottlenecking plans in Karnataka & Andhra Pradesh.
Talent Management
A thrust is given to addressing critical position talent gaps and strengthens Plant leadership (HODs) with right capabilities
through focused talent acquisition. The Company has identifed and established partnership with VSI, NSI Agri & Management
Institutions for sourcing of young & fresh talents.
Foster Employee Engagement
Employee Engagement is a critical driver of retention, employee productivity and business performance. The Company
has initiated Rationale Engagement process like, PPMM, Cane & Manufacturing meets (Exerg & Canect), timely & periodical
communication to all segments, Parrys Quality Day, etc. and Emotional Engagement process like, rewarding exceptional
performance & recognizing exemplary behavior, employee get-togethers, etc.
Enhance People Capability
Building and enhancing people capabilities is central to strategy execution. The Company endeavor to build the right skills &
capabilities for current and future needs. During the year 2011-12, the Company has identifed and established partnership
with technical training institutions like NTTF (for engineering skills), VSI & NSI (for sugar process skills) and conducted
customized skills training to improve the skill levels of employees.
Enable Performance Culture & Being Cost Advantaged to propel performance
The Company has implemented a performance and reward architecture that is aligned to its strategy. This initiative was aimed
at inculcating a performance & achievement orientation driven culture which is focused on achievement of annual business
results and goals that go beyond a year.
Safety
The Company has placed a strong emphasis on the need to have safe healthy work environment and culture of Zero tolerance
on safety violations. An integrated Quality, Health, Safety & Environment Policy was evolved to reinforce and reafrm the
untiring commitment of leadership towards Safety.
Employee Wellbeing
To reiterate the Company’s commitment to the culture of care, concern & wellbeing for the employees, welfare amenities were
established by introducing subsidized employee residential quarters, canteen facilities and occupational health centre.
CAUTIONARY STATEMENT
The management discussion and analysis report containing your Company’s objectives, projections, estimates and expectation
may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. Actual
results may difer materially from those expressed or implied in the statement. Your Company’s operation may inter-alia be
afected by the supply and demand situations, input price and the availability, changes in the government regulations, tax
laws and other factors. The Company cannot guarantee the accuracy of the assumptions and perceived performance of the
Company in future. The investors should bear the above in mind.
Parrys Sugar Industries Limited
20
Report on Corporate Governance
Company’s Philosophy on Corporate Governance
Parrys Sugar Industries Limited, a member of Murugappa Group of Companies, adheres to good corporate practices and is
constantly striving to improve them and adopt the best practices. Adherence to business ethics and commitment to corporate
social responsibility are the enablers for a company to maximising value for all its stakeholders. Parrys Sugar Industries Limited
is committed to the spirit of Murugappa Group by upholding the core values of integrity, passion, responsibility, quality and
respect in dealing with all stakeholders of the Company.
1. Board of Directors
A. Composition
? As on March 31, 2012, the Company had six Directors including a Non-Executive Chairman and a Managing Director.
Of the six Directors, Five are Non-Executive and three are Independent Directors. The Composition of the Board is in
conformity with Clause 49 of the Listing Agreements with the Stock Exchanges.
? The day-to-day management of the Company rests with the Managing Director.
? None of the Directors on the Board are Members of more than ten Committees or Chairman of more than fve
committees across all the companies in which they are Directors.
? The independent directors have confrmed that they satisfy the ‘criteria of independence’ as stipulated in clause 49
of the listing agreement.
The names and categories of the Directors on the Board, their attendance at Board Meetings held during the period July 1,
2011 to March 31, 2012 and the number of Directorships and Committee Chairmanships/Memberships held by them in other
companies as on March 31, 2012 are given below:
Name of the Director Category Number of Board
Meetings during
the year 2011-12
Whether attended
last AGM held on
September 28, 2011
No. of Directorships in
other public limited
companies #
No. of Committee
positions in other public
limited companies $
Held Attended Chairman of
the Board
Member
of the
Board
Chairman
of the
Committee
Member
of the
Committee
Mr. S. Sandilya
Chairman
DIN: 00037542
Independent and
Non-Executive
5 5 Yes 1 4 2 6
Mr. K. Balasubramanian
Director
DIN: 00009132
Independent and
Non-Executive
5 2 No - 7 2 3
Mr. K. Ramadoss
Director
DIN: 03230018
Independent and
Non-Executive
5 4* Yes - - - -
Mr. V. Ravichandran
Director
DIN: 00110086
Non-Independent
and Non- Executive
5 4 Yes - 4 - 3
Mr. N. Srinivasan
Director
DIN: 00123338
Non-Independent
and Non- Executive
5 4 Yes - 6 - 4
Annual Report 2011-12
21
Name of the Director Category Number of Board
Meetings during
the year 2011-12
Whether attended
last AGM held on
September 28, 2011
No. of Directorships in
other public limited
companies #
No. of Committee
positions in other public
limited companies $
Held Attended Chairman of
the Board
Member
of the
Board
Chairman
of the
Committee
Member
of the
Committee
Mr. D. Kumaraswamy
Managing Director
DIN: 00149344
Non-Independent
and Executive
5 4 Yes - 1 - 1
There are no inter-se relationships between our Board members.
* In addition to attending four meetings, Mr. Ramdoss participated in one meeting over teleconference.
# Excludes Directorships / Committee Positions in Private Limited Companies which are not subsidiaries of Public Limited
Companies, Foreign Companies and Companies under Section 25 of the Companies Act,1956.
$ Figures include Directorships / Committee Positions in Audit Committee and Shareholders / Investors Grievance
Committees only.
None of the above Directors hold any shares in the Company as on March 31, 2012.
B. Board Meetings
The Board meets atleast once in a quarter to review the fnancial results and other items on the agenda, which are
distributed to the Directors in advance. Five Board meetings were held during the period ended March 31, 2012. These
were held on July 25, 2011, September 28, 2011, October 21, 2011, January 25, 2012 and March 28, 2012 and the
maximum gap between the two Board Meetings did not exceed four months.
None of the Non-Executive Directors have any material pecuniary relationship or transaction with the Company.
C. Changes in the composition of Directors during the fnancial year 2011-12 (9-months period).
There was no change in composition of the Board.
D. Code of Conduct
The Company has adopted the code of conduct for all Board members and Senior Management as required under Clause
49 of the Listing Agreement. The Code is posted on the Company’s website: www.parrysugar.in. All Board members and
Senior Management personnel have afrmed compliance with the Code on an annual basis and a declaration to this
efect by Mr. D. Kumaraswamy, Managing Director is attached to this Report.
E. Profle of Directors retiring by rotation and seeking re-appointment in pursuance of Clause 49
of the Listing Agreement.
Name of the Director Mr. K. Ramadoss Mr. V. Ravichandran
Date of Birth 26/04/1950 09/06/1956
Date of Appointment 27/08/2010 27/08/2010
Qualifcations B.Sc, C.A.I.I.B Engineering Graduate and holds a Post Graduate Diploma
in Management from IIM, Ahmedabad besides being a
Cost Accountant and a Company Secretary.
Expertise in specifc
functional area
Banking Operations, Business
Development, Policy matters,
Credit Management with special
emphasis on stressed assets.
Finance, Marketing and General Management
Parrys Sugar Industries Limited
22
Chairman/Director of
other Companies
Nil Director of other Companies
? Coromandel International Ltd.
? E.I.D.-Parry (India) Ltd.
? Silkroad Sugars Pvt. Ltd.
? CFL Mauritius Ltd.
? Parry America Inc.
? US Neutraceuticals LLC
? Foskor (Pty) Ltd.
? Sabero Organics Gujarat Ltd.
? Murugappa Holdings Ltd.
Chairman/Member of
the Committees(*) of
the Boards of which
he is a Director
Nil Audit Committee-Member
? E.I.D.- Parry (India) Ltd.
Share Transfers & Investors Grievance Committee -
Member
? Coromandel International Ltd.
? E.I.D.- Parry (India) Ltd.
Compensation & Nomination Committee - Member
E.I.D.-Parry (India) Ltd.
No. of shares held in
the Company
Nil Nil
(*) includes Audit, Remuneration/nomination/compensation and Shareholders/Investors Grievance Committees of other
Companies.
2. Audit Committee
A. Composition of the Audit Committee:
The Audit Committee of the Board comprises four members viz., Mr. S. Sandilya, Mr. K. Balasubramanian, Mr. K.
Ramadoss and Mr. N. Srinivasan. Mr. S. Sandilya is the Chairman of the Audit Committee. He is an Independent
Director. The Audit Committee comprises of three Independent Directors and the requirements of Section 292A
of the Companies Act, 1956 and Clause 49 of the Listing Agreements have been complied with. Mr. B. M. Rath,
Company Secretary acts as the Secretary of the Committee.
Chief Financial Ofcer and the Managing Director are permanent invitees to the Audit Committee Meetings. Besides
the Statutory Auditors and Internal Auditors, Cost Auditor and other members of the senior management also attend
when invited to the meetings.
B. Meetings and Attendance during the year
During the period ended March 31, 2012, the Audit Committee met three times on July 25, 2011, October 21, 2011
and January 25, 2012 and the maximum gap between the two Audit Committee Meetings did not exceed four
months. The composition of the Audit Committee and particulars of meetings attended by the members of the
Audit Committee are given below:
SL. No. Name of the Member No. of Meetings
Held Attended
1. Mr. K. Balasubramanian 3 2
2. Mr. S. Sandilya 3 3
3. Mr. N. Srinivasan 3 3
4. Mr. K. Ramadoss 3 2*
(*) in addition to attending two meetings, Mr. Ramdoss participated in one meeting over teleconference.
Necessary quorum was present at all the meetings.
Annual Report 2011-12
23
Mr. S. Sandilya, the Chairman of the Audit Committee was present at the Annual General Meeting held on September
28, 2011.
C. The Terms of reference of Audit Committee:
1. Oversight of the company’s fnancial reporting process and the disclosure of its fnancial information to ensure
that the fnancial statement is correct, sufcient and credible.
2. Recommend to the Board, the appointment, re-appointment and, if required, the replacement or removal of
the statutory auditor and the fxation of audit fees and approval of payment to statutory auditors for any other
services rendered by the statutory auditors.
3. Review with the management, the annual fnancial statements before submission to the board for approval,
with particular reference to:
a. Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s
report in terms of clause (2AA) of Section 217 of the Companies Act, 1956
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Signifcant adjustments made in the fnancial statements arising out of audit fndings
e. Compliance with listing and other legal requirements relating to fnancial statements
f. Disclosure of any related party transactions
g. Qualifcations in the draft audit report.
4. Review with the management, the quarterly fnancial statements before submission to the Board for approval.
5. Review with the management, the statement of uses / application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated
in the ofer document/prospectus/notice and the report submitted by the monitoring agency monitoring the
utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to
take up steps in this matter.
6. Review with the management, performance of statutory and internal auditors, adequacy of the internal control
systems.
7. Review the adequacy of internal audit function, including the structure of the internal audit department,
stafng and seniority of the ofcial heading the department, reporting structure coverage and frequency of
internal audit.
8. Discuss with internal auditors any signifcant fndings and follow up thereon.
9. Review the fndings of any internal investigations by the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the
Board.
10. Discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower mechanism.
The scope of Audit Committee includes matters which are set out in Clause 49 of the Listing Agreement with
Stock Exchanges as amended from time to time read with Section 292A of the Companies Act, 1956.
3. Remuneration Committee
A. Composition of the Remuneration Committee
The Remuneration Committee comprises four members viz, Mr. S. Sandilya, Mr. K. Balasubramanian, Mr. V.
Ravichandran and Mr. K. Ramadoss. Mr. S. Sandilya, an Independent Director, is the Chairman of the Remuneration
Parrys Sugar Industries Limited
24
Committee. Mr.B. M. Rath, Company Secretary acts as Secretary to the Remuneration Committee. Mr. S. Sandilya, the
Chairman of the Remuneration Committee was present at the Annual General Meeting held on September 28, 2011.
B. Terms of Reference
? Determine and recommend to the Board, the remuneration payable including any revision in remuneration
payable to Managing Director / Executive Directors / Non-Executive Directors.
? Take into consideration and ensure compliance of the provisions under Schedule XIII of the Companies Act,
while determining the remuneration.
? Consider such other matters as the Board may advise the Committee.
C. Remuneration Committee Meetings
The Remuneration Committee Meetings are held whenever matters pertaining to the remuneration payable
including any revision in remuneration to Managing Directors/Executive Directors/Non Executive Directors, are
considered.
During the period ended March 31, 2012 the Committee met once on July 25, 2011.
D. Attendance of Remuneration Committee Members during period ended March 31, 2012
Sl. No. Name of the Member No. of Committee Meetings
Held Attended
1. Mr. S. Sandilya 1 1
2. Mr. K. Balasubramanian 1 1
3. Mr. V. Ravichandran 1 1
4. Mr. K. Ramadoss 1 1*
(*) Mr. K. Ramadoss participated over teleconference.
E. Remuneration Policy
i) Remuneration to Executive Directors
Remuneration to the Executive Directors comprises Salary, Allowances & Perquisites and performance incentive.
While determining the remuneration, the Committee takes into account the fnancial position of the Company,
prevailing trend in the industry, qualifcation, experience and past performance of the person. The performance
incentive is determined based on performance parameters as per the Company’s Policy and also based on
certain pre-agreed performance parameters. The Company does not have any Employees Stock Option Scheme.
Details of remuneration paid during the fnancial year 2011-12 (9 months) are furnished hereunder:
(` in Lakhs)
Name of the Director Salary Allowances &
Perquisites
Incentive Total (*)
Mr. D. Kumaraswamy
Managing Director
18.59 38.53 8.26 65.37
(*) Contribution to provident fund and other benefts are excluded.
Note: In view of the inadequacy of proft during the fnancial year 2011-12, the Company had obtained approval
of the Central Government for payment of remuneration in excess of the limits specifed in Schedule XIII of the
Companies Act, 1956.
Annual Report 2011-12
25
ii) Remuneration to Non-Executive Directors
Non-Executive Directors are paid sitting fees at ` 15,000/- for each Board and Audit Committee Meetings and `
10,000/- each for other Committee Meetings. The Company also reimburses the out of pocket expenses incurred
by the Directors for attending the Meeting. The details of sitting fees paid to the Non-Executive Directors for the
fnancial year 2011-12 (9 months) are as under:
Name of the Director Sitting Fees
(` in Lakhs)
Mr. S. Sandilya 1.30
Mr. K. Balasubramanian 0.90
Mr. V. Ravichandran 0.70
Mr. N. Srinivasan 1.15
Mr. K. Ramadoss 1.30
Total 5.35
4. Shareholders / Investors Grievance Committee
A. Composition of the Committee:
The Shareholders/Investors Grievance Committee comprises Mr. K. Balasubramanian, Mr. D. Kumaraswamy and
Mr. K. Ramadoss. Mr. K. Balasubramanian, Non-Executive Independent Director, is the Chairman of the Committee.
The composition of the Committee meets the requirements of Clause 49 of the Listing Agreement. Mr. B. M. Rath,
Company Secretary & Compliance Ofcer acts as the Secretary of the Committee.
The functions of the committee include (i) dealing with the investors complaints like delay in transfers of shares,
non-receipt of balance sheet, non-receipt of declared dividends/share certifcates, dematerialization of shares,
replacement of lost/stolen/ mutilated share certifcates, etc, (ii) investigate into investors complaints and take
necessary steps for redressal thereof (iii) to perform all functions relating to the interest of shareholders/investors
of the Company as may be required by the provisions of the Companies Act, 1956, Listing Agreements and the
guidelines issued by SEBI or any other regulatory authority.
Name and designation of Compliance Ofcer:
Mr. B. M. Rath, General Manager (Legal) & Company Secretary
B. Meetings of the Shareholders/Investors Grievance Committee
During the fnancial year 2011-12 (9 months), the Committee met three times on July 25, 2011, October 21, 2011 and
January 25, 2012.
C. Attendance of Shareholders/Investors Grievance Committee Members are as under:
SL. No. Name of the Member No. of Meetings
Held Attended
1. Mr. K. Balasubramanian 3 2
3. Mr. D. Kumaraswamy 3 2
4. Mr. K. Ramadoss 3 2*
(*) In addition to attending two meetings Mr. K. Ramadoss participated in one meeting over teleconference.
D. The details of complaints received during the fnancial year 2011-12 (9 months) and status
of the same are given below:
SL. No. Particulars No. of complaints
Received Resolved Pending
1. Non-receipt of dividend warrants 3 3 -
2. Non-receipt of securities 4 4 -
3. Non-receipt of Annual Report 2 2 -
Total 9 9 -
Parrys Sugar Industries Limited
26
5. General Body Meetings
(a) Annual General Meetings
The venue, date and time of the Annual General Meetings held during the preceding three years and the Special
Resolution passed thereat are as under:
Year Date & Time
of Meeting
Venue Special resolutions passed
2010-11 September 28,
2011 at 11.00
A.M.
Khincha Hall, Bharatiya
Vidya Bhavan, Race Course
Road, Bengaluru-560001
-
2009-10 August 4, 2010
at 11.00 A.M.
Khincha Hall, Bharatiya
Vidya Bhavan, Race Course
Road, Bengaluru-560001
-
2008-09 September 17,
2009 at 10.30
A.M.
Khincha Hall, Bharatiya
Vidya Bhavan, Race Course
Road, Bengaluru-560001
1) Payment of remuneration to the Managing Director in
excess of the limits as per Sub Clause C of Section II of
Part II of Schedule XIII of the Companies Act, 1956.
2) Payment of remuneration to the Director – Technical in
excess of the limits as per Sub Clause B of Section II of
Part II of Schedule XIII of the Companies Act, 1956.
3) Payment of remuneration to the erstwhile Managing
Director in excess of the limits as per Sub Clause B of
Section II of Part II of Schedule XIII of the Companies Act,
1956.
(b) Extraordinary General Meetings
The venue, date and time of the Extraordinary General Meeting held during the preceding three years and the
Special Resolution passed thereat are as under:
Year Date & Time
of Meeting
Venue Special resolutions passed
2011-12 November 17,
2011 at 11.30
A.M.
Khincha Hall, Bharatiya
Vidya Bhavan,
Race Course Road,
Bengaluru-560001
-
2010-11 June 28, 2011 at
11.00 A.M.
Khincha Hall, Bharatiya
Vidya Bhavan,
Race Course Road,
Bengaluru-560001
Issue of Preference shares of ` 10/- each aggregating to a
nominal amount not exceeding ` 100 Crores.
(c) Postal Ballot
There were no Special Resolutions passed through postal ballot during the Financial year 2011-12.
6. Disclosures
(i) Disclosure on materially signifcant related party transactions that may have potential confict with
the interests of company at large:
There are no transactions which may have potential conficts with the interests of the Company at large. Transactions
with related parties are disclosed in Note No. 47 of the Signifciant Accounting Policies and Notes on Account.
Disclosures from Senior Management relating to all material fnancial and commercial transactions, where they had
or were deemed to have had personal interest, that might have had a potential confict with the interest of the
Company at large were placed before the Board.
Annual Report 2011-12
27
(ii) Disclosure of Accounting Treatment
The Company has followed the Guidelines of Accounting Standards laid down by the Institute of Chartered
Accountants of India (ICAI) in preparation of its fnancial statements.
(iii) Details of non-compliance by the company, penalties, strictures imposed on the Company by Stock
Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last
three years.
There has been no instance of non-compliance by the Company on any matter related to capital markets during
the last three years. No penalties or strictures have been imposed by the stock exchanges or SEBI or any statutory
authority.
(iv) Whistle blower policy and afrmation that no personnel have been denied access to the Audit
Committee.
With a view to maintain high level of legal, ethical and moral standards and to provide a platform for the employees
to voice their concern on any malpractices, impropriety, abuse or wrongdoing, the Company has formulated a whistle
blower policy which is applicable to the company. The employees can raise his/her concern to the designated person and
necessary action will be taken.
(v) Details of compliance with mandatory requirements and adoption of the non-mandatory
requirements of this clause.
The Company has complied with all the mandatory requirements on Corporate Governance as specifed in Clause 49
of the Listing Agreement with the Stock Exchanges. Compliance reports in the prescribed format has been submitted
to the Stock Exchanges for all the quarters.
As regards the non-mandatory requirements, the following have been adopted:
1. Remuneration Committee
As detailed in the earlier paragraphs, the Company has constituted a Remuneration Committee. The Chairman
of the Remuneration Committee was present at the last Annual General Meeting held on 28th September, 2011.
2. Risk Management Committee
The Board has constituted a “Risk Management Committee” under the Chairmanship of Mr. K. Ramadoss,
Independent Director and the Managing Director as member. The other business heads, departmental heads
are invited to the Committee meetings as and when required. The details of risk assessments and the mitigation
plans appear under the Management Discussion and Analysis Report forming part of the Annual Report.
3. Whistle Blower Policy
The Company has adopted a Whistle Blower Policy with the objective to provide employees, customers and
vendors an avenue to raise concerns, in line with Parrys Sugar Industries Ltd.’s commitment to the highest
possible standards of ethical, moral and legal business conduct and its commitment to open communication
and to provide necessary safeguards for protection of employees from reprisals or victimisation, for whistle
blowing in good faith. The Audit Committee periodically reviews the functioning of the Whistle Blower
Mechanism. The Whistle Blower Policy has also been posted on the Company’s website www.parrysugar.in
4. Shareholder Rights
The quarterly fnancial results are published in leading fnancial newspapers and uploaded on the Company’s
website besides being sent to the Stock Exchanges. The Company has therefore not been sending the half
yearly fnancial results to the shareholders.
5. Other non-mandatory requirements have not been adopted by the Company.
(vi) Corporate Identity Number (CIN)
The Corporate Identity Number of the Company allotted by the Ministry of Corporate Afairs, Government of India is:
L28100KA1986PLC049077.
Parrys Sugar Industries Limited
28
(vii) Compliance certifcate
Certifcate from a Practicing Company Secretary, M/s. V. Sreedharan & Associates confrming compliance with the
conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this
Report.
(viii) Share Capital Audit
A qualifed practicing Company Secretary carried out secretarial audit to reconcile the total admitted capital with
National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Limited (CDSL) and the total
issued and listed capital. The Share Capital audit report confrms that the total issued/paid up capital is in agreement
with the total number of shares in physical form and the total number of dematerialised shares held with NSDL and
CDSL. The audit is carried out every quarter and report thereon is submitted to the Stock Exchanges and is placed
before the Board of Directors.
(ix) Compliance
The Board reviews periodically compliance reports of all laws applicable to the Company, prepared by the Company
as well as steps taken by the Company to rectify instances of non-compliances, if any.
(x) Subsidiary Company
The Company does not have any material non listed Indian Subsidiary Company. The Audit Committee reviews the
fnancial statements of the unlisted subsidiary company. The minutes of the Board meetings as well as the fnancial
statements of the unlisted subsidiary company are placed before the Board of Directors of the Company for their
review.
(xi) Equity shares in the Suspense Account
As per Clause 5A of the Listing Agreement with Stock Exchanges, 141091 equity shares held in physical form which
remain unclaimed has been transferred to the Unclaimed Suspense Account. All corporate benefts that accrue on
these shares shall also be credited to the said suspense account and the voting rights on such shares shall remain
frozen till the rightful owner claims the shares.
(xii) Transfer of Unpaid/Unclaimed amounts to Investor Education and Protection Fund
Pursuant to the provisions of Sections 205A(5) and 205C of the Companies Act, 1956, the Company has transferred
the unpaid or unclaimed dividend for the fnancial year 2003-04 to the Investor Education and Protection Fund
(IEPF) established by the Central Government. No claim shall lie against the Company or IEPF for the amounts so
transferred nor shall any payment be made in respect of such claims.
The information relating to outstanding unclaimed dividend accounts and the dates by which they can be claimed
by the members are given below:
Financial year Date of Declaration Date of Payment Last date for claiming
unpaid dividend
2004-05 August 20, 2005 September 16, 2005 August 19, 2012
2005-06 September 28, 2006 October 27, 2006 September 27, 2013
2006-07 September 25, 2007 October 22, 2007 September 24, 2014
2007-08 September 25, 2008 October 3, 2008 September 25, 2015
The Members are requested to claim their unpaid/unclaimed dividends for the fnancial years 2004-05; 2005-06;
2006-07 and 2007-08 at the earliest. Once the above amounts are transferred to IEPF, no claim of the shareholder
shall lie against the Company or the IEPF.
7. Means of Communication
The Annual Reports, notices and other communications have been sent to each shareholder through post, e-mail. As
per the statutory requirements under Clause 41 of the Listing Agreement with the Stock Exchanges, the quarterly/
annual (consolidated) fnancial results and the segment-wise reports are generally published in “Business Standard”
Annual Report 2011-12
29
and “Samyukta Karnataka” (a regional daily in Kannada language). The fnancial results, shareholding pattern and other
updates on the working of the Company have been posted on the Company’s website: www.parrysugar.in. Besides the
above, the Company also submits, inter-alia, to the Stock Exchanges, the full version of the Annual Report; information
on corporate governance; quarterly/half yearly/yearly fnancial results; quarterly shareholding pattern; details of
appointment/resignation of Directors and Company Secretary and such other reports as may be specifed. In terms of
clause 52 of the Listing Agreement with the Stock Exchanges, the Company also submits the statements, information and
reports on the Corporate Filing and Dissemination System (CFDS) which are available at www.corpfling.co.in
8. General Shareholder Information
I. AGM: Date: July 26, 2012
Time: 10.30 A.M.
Venue: Khincha Hall, Bharatiya Vidya Bhavan, Race Course Road, Bengaluru – 560 001.
II. Financial Calendar Financial year: April to March
The fnancial results are proposed to be declared as per the following tentative schedule:
Particulars Tentative schedule
Financial reporting for the quarter ending June 30, 2012 Before August 14, 2012
Financial reporting for the quarter/half year ending September
30, 2012
Before November 14, 2012
Financial reporting for the quarter/nine months ending
December 31, 2012
Before February 14, 2013
Financial reporting for the quarter/year ending March 31, 2013. In April/May 2013
Annual General Meeting for the year ending March 31, 2013. July/August, 2013
III. Date of Book Closure Wednesday, the July 18, 2012 to Thursday, the July 26, 2012, both days inclusive
IV. Dividend payment date Not Applicable
V. Listing on Stock
Exchanges
Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001.
Tel Nos: (022) 22721233/34 Fax: (022) 22723121
Stock Code: 500162
National Stock Exchange of India Limited
Exchange Plaza, 5th Floor, Plot No. C/1, G. Block
Bandra - Kurla Complex, Bandra (E), Mumbai – 400 051
Tel Nos. (022) 26598100-8114 Fax: (022) 26598237/38
Stock Code: PARRYSUGAR
The Company has paid listing fees for the fnancial year 2012-13 to each of the Stock
Exchanges.
VI. Market Price Data: Monthly, High, Low and trading volume for equity shares
Month
NSE BSE
High Low Volume High Low Volume
` P ` P No. of
shares
` P ` P No. of
shares
July, 2011 142.00 104.15 12,825 139.85 105.00 6,993
August, 2011 106.80 95.00 4,478 108.00 92.20 2,025
September, 2011 102.00 84.30 9,769 101.00 85.00 2,760
October, 2011 89.00 69.50 6,188 95.70 71.05 1,975
November, 2011 106.50 80.00 16,758 99.90 76.55 3,197
December, 2011 115.50 82.00 6,779 112.90 82.70 2,555
January, 2012 110.00 82.05 4,577 111.30 86.00 7,810
February, 2012 95.95 79.00 4,481 101.00 79.80 4,768
March, 2012 85.90 62.50 2,07,463 85.00 65.00 2,02,514
Parrys Sugar Industries Limited
30
VII. Share price performance compared with broad-based indices
Company’s share price performance in comparison with BSE Sensex
Company’s Share Price Sensex
0
20
40
60
80
100
120
Mar-12 Feb-12 Jan-12 Dec-11 Nov-11 Oct-11 Sep-11 Aug-11 Jul-11
15000
15500
16000
16500
17000
17500
18000
18500
VIII. Registrar & Transfer Agents
Main Ofce
Karvy Computershare Pvt. Ltd.
Unit: Parrys Sugar Industries Limited
Plot No.17 to 24, Vittal Rao Nagar
Madhapur, Hyderabad – 500 081
Phone: (040) 23420819 to 24
Fax: (040) 23420814
Email ID: [email protected]
Branch Ofce
Karvy Computershare Pvt. Ltd.
Unit: Parrys Sugar Industries Limited
No.51/2, TKN Complex, Vani Vilas Road
Opp: National College, Basavanagudi
Bengaluru - 560 004
Phone: (080) 41204350
Fax: (080) 26621169
Email Id: [email protected]
IX. Share Transfer System
96.28% of the shares of the Company are in electronic form. Transfer of these shares is done through the depositories
with no involvement of the Company. Regarding transfer of shares held in physical form, the transfer documents
can be lodged with Karvy Computershare Pvt. Ltd. at any of the above mentioned addresses or at the Registered
Ofce of the Company. The share transfers received in physical form are processed within a period of 30 days from
the date of receipt subject to the documents being valid and complete in all respects. The Board of Directors of the
Company has delegated the powers of approving transfers, transmission, issue of duplicate share certifcates etc.,
to the Managing Director, Chief Financial Ofcer and Company Secretary. The quarterly details of shares transferred,
transmitted, dematerialised etc., are placed before the Board. The Company obtains half yearly certifcate from a
Company Secretary in practice in compliance regarding share transfer formalities and submits a copy thereof to the
Stock Exchanges in terms of Clause 47(c) of the Listing Agreement.
Annual Report 2011-12
31
X. Distribution of shareholding of equity shares as on March 31, 2012
Sl. No. Distribution of Holdings No. of Shareholders % of Shareholders Total Shares
1. 1 - 5000 15,764 97.43% 1,337,583
2. 5001 - 10000 292 1.80% 206,132
3. 10001 - 20000 77 0.48% 103,069
4. 20001 - 30000 18 0.11% 44,531
5. 30001 - 40000 10 0.06% 33,708
6. 40001 - 50000 3 0.02% 14,571
7. 50001 - 100000 8 0.05% 57,221
8. 100001 & Above 7 0.04% 18,164,892
Total 16,179 100% 19,961,707
XI. Shareholding Pattern as on March 31, 2012
Sl. No. Description No. of cases Total shares % Equity
1. Promoters 1 12,975,110 65.00
2. Financial Institutions / Banks 3 387,690 1.94
3. Clearing Members 14 393,194 1.97
4. Foreign Institutional Investors 1 2,651 0.01
5. H U F 139 28,845 0.14
6. Bodies Corporate 220 4,477,448 22.43
7. Mutual Funds/UTI 3 868 0.00
8. Non Resident Indians 131 75,940 0.38
9. Overseas Bodies Corporate 1 248 0.00
10. Individuals 15,666 1,619,713 8.12
TOTAL 16,179 19,961,707 100.00
Promoters
Financial Institutions / Banks
Clearing Members
Foreign Institutional Investors
H U F
Bodies Corporate
Non Resident Indians
Individuals
XII. Distribution and Shareholding Pattern of Preference Shareholders as on March 31, 2012.
The entire Preference Shares of the Company are held by M/s E.I.D.-Parry (India) Limited, the Company’s holding
Company, as detailed below:
1,28,31,880, 8% Non-Cumulative Redeemable Preference shares of the face value of ` 11/- each.
10,00,00,000, 8% Cumulative Redeemable Preference shares of the face value of ` 10/- each.
Parrys Sugar Industries Limited
32
XIII. Dematerialisation of shares and liquidity
The process of conversion of shares from physical form to electronic form is known as dematerialisation. For
dematerialising the shares, the Shareholder has to open a demat account with a Depository Participant (DP). The
Shareholder is required to fll in a Demat Request Form and submit the same along with the Share Certifcate (s) to the
DP. The DP allocates a demat request number and forwards the request physically and electronically, through NSDL/
CDSL, to the R&T Agent. On receipt of the demat request both physically and electronically and after verifcation, the
Shares are dematerialised and an electronic credit of shares is given in the account of the shareholder.
The Company’s shares are compulsorily traded in dematerialised form and are available for trading on both the
Depositories in India viz., National Securities Depository Ltd. and Central Depository Services (India) Limited (CDSL).
The Company’s shares are regularly traded on the National Stock Exchange of India Limited and the Bombay Stock
Exchange Ltd. in electronic form.
Mode of Equity Shares held
The Company has registered itself with NSDL and CDSL and the ISIN pertaining to the equity shares of the Company
is: INE353B01021. The modes of holding of the Company’s equity shares as on March 31, 2012 is as under:
Description No. of Shareholders No. of Shares % Equity
Physical 7,006 7,43,874 3.73
NSDL 6,855 1,89,84,787 95.11
CDSL 2,318 2,33,046 1.17
Total: 16,179 1,99,61,707 100.00%
XIV. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely
impact on equity
The Company does not have any outstanding GDRs/ADRs/Warrants or any Convertible instruments.
XV. Prevention of Insider Trading
In accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations 1992, the Company has
instituted a comprehensive Code of Conduct for Prohibition of Insider Trading in the Company’s shares. This code
is applicable to all Directors/ofcers (including Statutory Auditors) / designated employees. The Code ensures
prevention of dealing in Company’s shares by persons having access to unpublished price sensitive information.
XVI. Plant Locations
(i) Sugar Complex- Sugar, Co-generation power, Distillery & Bio-fertilizers Unit at Sankili Village, Regidi
Amadalavalasa Mandal, Srikakulam District 532 440, Andhra Pradesh
(ii) Sugar complex – Sugar, Co-generation Power & Distillery Units at Hullatti Village, Haliyal Mandal, Uttara Kannada
District, Karnataka
(iii) Sugar complex – Sugar & Co-generation Power (leased unit) at Khanpet Village, PO Toragall, Ramdurg Taluk,
Belgaum District, Karnataka.
XVII. Address for Correspondence
Registered ofce Address: Registrar & Share Transfer Agents:
Parrys Sugar Industries Limited Karvy Computershare Pvt. Ltd.
Venus Building, 3rd Floor, (Unit: Parrys Sugar Industries Limited)
1/2 Kalyanamantapa Road Plot Nos.17 to 24, Vittal Rao Nagar
Jakkasandra, Koramangala, Madhapur, Hyderabad – 500 081
Bengaluru – 560 034 Phone: +91 40 44655000
Phone: 080-49006666 Fax: +91 40 23420814
Fax: 080-49006600 Email: [email protected]
XVIII. Corporate Governance Voluntary Guidelines 2009
The Company, in line with its stated policy of being committed to the principles and practices of good corporate
governance, is in compliance with many of these guidelines, as reported in the earlier paragraphs. As regards the
remaining guidelines, the Company is in the process of evaluating the feasibility for implementation progressively.
XIX. Management Discussion and Analysis
The Management Discussion and Analysis forms part of the Annual Report.
Annual Report 2011-12
33
Corporate Governance Compliance Certifcate
Corporate Identity No: L28100KA1986PLC049077
Nominal Capital : ` 175 Crores
To the Members of Parrys Sugar Industries Limited
We have examined all the relevant records of Parrys Sugar Industries Limited for the purpose of certifying compliance of the
conditions of the Corporate Governance under Clause 49 of the Listing Agreement with the Stock Exchanges for the 9 (Nine)
months period from July 1, 2011 to March 31, 2012. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of certifcation.
The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was limited
to the procedure and implementation process adopted by the Company for ensuring the compliance of the conditions of the
corporate governance.
This certifcate is neither an assurance as to the future viability of the Company nor of the efcacy or efectiveness with which
the management has conducted the afairs of the Company.
On the basis of our examination of the records produced and the explanations and information furnished, we certify that the
Company has complied with:
(a) All the mandatory conditions of the said Clause 49 of the Listing Agreement
(b) The following non-mandatory requirements of the said Clause 49:
(i) Clause 2 relating to Remuneration Committee
(ii) Clause 7 relating to Whistle Blower Policy
For V. Sreedharan & Associates
Company Secretaries
V. SREEDHARAN
Bengaluru Partner
April 17, 2012 FCS 2347; CP No. 833
Declaration regarding compliance by Board Members and
Senior Management with the Company’s Code of Conduct
This is to confrm that the Board has laid down a Code of Conduct for all Board Members and Senior Management of the
Company. The Code of Conduct has also been posted on the website of the Company.
It is further confrmed that all Directors and Senior Management personnel of the Company have afrmed compliance with
the Code of Conduct of the Company for the fnancial year (9-months) ended March 31, 2012 as envisaged in Clause 49 of the
Listing Agreement with the Stock Exchanges.
D.Kumaraswamy
Chennai Managing Director
April 24, 2012
Parrys Sugar Industries Limited
34
Auditors’ Report
To the Members of Parrys Sugar Industries Limited
1. We have audited the attached Balance Sheet of Parrys Sugar Industries Limited as at 31st March 2012, the Statement of Proft
and Loss and also the Cash Flow Statement for the nine months period ended on that date annexed thereto. These fnancial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these fnancial
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 fnancial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates
made by the management, as well as evaluating the overall fnancial 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 (as amended) issued by the Central Government in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters
specifed in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that:
a. We have obtained all the information and explanations which to the best 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 been kept by the Company in so far as it appears,
from our examination of those books.
c. The Balance Sheet and the Proft and Loss Account and Cash Flow Statement dealt with by this report, are in
agreement with the books of accounts of this Company;
d. In our opinion, the Balance Sheet, Proft and Loss Account and Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956.
e. On the basis of written representations received from the Directors as on 31st March, 2012 and taken on record by
the Board of Directors, none of the Directors is disqualifed from being appointed as Director in terms of clause (g)
of sub-section (1) of Section 274 of the Act.
f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts
read together with the Signifcant Accounting Policies and the Notes forming part of accounts 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:
i) In the case of the Balance Sheet, of the State of Afairs of the Company as at 31st March, 2012,
ii) In the case of the Statement of Proft and Loss, of the Loss of the Company, for the nine months period
ended on that date.
iii) In the case of Cash Flow Statement, of the Cash Flow for the nine months period ended on that date.
For R.G.N Price & Co.,
Chartered Accountants
Firm Regn. No.: 002785S
H. S. Venkatesh
Chennai Partner
April 24, 2012 Membership No. 026666
Annual Report 2011-12
35
Annexure to the Auditors’ Report
Annexure referred to in Para 3 of our report of even date on the Accounts of
Parrys Sugar Industries Limited, for the nine months period ended 31st March 2012
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation
of fxed assets.
(b) As explained to us, the management has generally carried out the physical verifcation of a portion of the fxed
assets in accordance with their phased programme of physical verifcation, which is considered reasonable having
regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on
such verifcation during the nine months period.
(c) During the nine months period, the Company has not disposed of substantial portion of the fxed assets.
(ii) (a) The Raw material, Stores and Spare Parts, Tools, Work in Progress inventory with the Company have been physically
verifed during the period by the management. In our opinion, the frequency of verifcation is reasonable. In case
of fnished goods, stock verifcation was done at the nine months period end.
(b) The procedures of physical verifcation of Raw material, Stores and Spare Parts, Tools, Work in Progress inventory
and Finished goods followed by the management are generally reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verifcation between the
physical stocks and the book records were not material and have been appropriately dealt in the books.
(iii) The Company has not granted / taken any loans to / from parties covered in the register maintained under Section 301
of the Companies Act, 1956 and hence, Clause No. 4 (iii) of Companies Audit Report Order, 2003, as amended in 2004, is
not applicable.
(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems
commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fxed
assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control system.
(v) According to the information and explanations given to us, we are of the opinion that there are no transactions that need
to be entered in register maintained under Section 301 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58 A and 58 AA of the
Companies Act, 1956 and rules framed thereunder.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to
the Rules made by the Central Government of India, maintenance of cost records has been prescribed under clause (d)
of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records
have been made and maintained. We have not , however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax (VAT),
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income
Tax, Service Tax, Sales Tax(VAT), Customs Duty, Excise Duty and Cess were in arrears, as at 31st March 2012 for a
period of more than six months from the date they became payable.
Parrys Sugar Industries Limited
36
(c) According to the information and explanations given to us, there are no dues of Income Tax, Service Tax, Sales
Tax(VAT), Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute except as
follows:
Sl. No. Statute Nature of Dues Forum where the
dispute is pending
Amount
(` In Lakhs)
Period to which
the matter
pertains
1. Central Excise Act,
1944
Central Excise
Duty
The Additional
Commissioner of Central
Excise and Customs
16.74 2011-12
CENVAT Credit The Additional
Commissioner of Central
Excise & Service Tax
3.42 2008-09
166.10 2011-12
0.96 2008-09
3.86 2009-10
The Assistant
Commissioner of Central
Excise and Customs
0.45 2007-08
6.16 2011-12
The Commissioner of
Central Excise
39.69 2007-08
The Superintendent
of Central Excise and
Customs
0.25 2010-11
Goods cleared
without excise
invoice
The Additional
Commissioner of Central
Excise and Customs
1.50 2008-09
2. Finance Act, 1994
(Service Tax)
GTA on Outward
Freight
Commissioner of Central
Excise & Customs
60.48 2011-12
The Additional
Commissioner of Central
Excise and Customs
1.68 2008-09
The Assistant
Commissioner of Central
Excise and Customs
4.63 2011-12
Non-payment of
Service Tax
The Assistant
Commissioner of Central
Excise and Customs
3.11 2008-09
3. Karnataka Tax on
Entry of Goods Act,
1979
Levy of Entry Tax Deputy Commissioner
of Commercial Taxes
(Audit-1)
18.95 2010-11
4.
Andhra Pradesh
General Sales Tax
Act, 1956
Excess ITC claimed Appellate Deputy
Commissioner
3.27 2010-11
Asst. Commissioner (CT)
LTU
1.85 2010-11
Sales Tax High Court of Andhra
Pradesh
37.01 2004-05
5. Andhra Pradesh
Electricity Duty
Act, 1939
Electricity Duty Government of Andhra
Pradesh – Electrical
Inspectorate
314.63 2004-05 to 2011-12
Annual Report 2011-12
37
(x) The Company has accumulated losses amounting to ` 66.35 crores as at March 31, 2012 and the same has exceeded
50% of net worth. The Company has not incurred cash losses during the nine months period. However the Company has
incurred Cash losses of ` 67.88 Crores in the immediately preceding fnancial period. During the period, the Company
has informed BIFR under Section 23 (1) (a) of Sick Industrial Companies (Special Provisions) Act, 1985 since accumulated
losses exceeded 50% of networth as on 30th June 2011.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in
repayment of dues to bank and fnancial institutions at the Balance Sheet date.
(xii) According to the information furnished, the Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.
(xv) The Company has not given any guarantee for loans taken by others from banks or fnancial institutions during the
period except for Agricultural loans availed by Sugarcane suppliers from Banks, the repayment of which is out of Cane
price payable and in our opinion the terms and conditions of which, are not prima facie prejudicial to the Company.
(xvi) In our opinion, based on our examination of books on an overall basis, the term loans have been applied for the purposes
for which they were obtained.
(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short term basis have been used for long term investment.
(xviii) The Company has not made preferential allotment of shares to parties covered in the register maintained under Section
301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised money by Public Issues and hence Clause 4 (xx) of CARO 2003 is not applicable to the
Company.
(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, and according to the information and explanations given to us, we have
neither come across any instance of fraud on or by the Company noticed or reported during the period nor have we been
informed of any such case by the management, that causes the fnancial statements to be materially misstated.
For R.G.N Price & Co.,
Chartered Accountants
Firm Regn. No.: 002785S
H. S. Venkatesh
Chennai Partner
April 24, 2012 Membership No. 026666
Parrys Sugar Industries Limited
38
Balance Sheet as at March 31, 2012
` in Lakhs
Sl.
No.
Particulars Note
No.
As at
March 31,
2012
As at
June 30, 2011
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital 1 13,407.68 10,907.68
(b) Reserves and Surplus 2 (6,637.46) (6,000.13)
(c) Money received against share warrants - -
2. Share Application Money Pending Allotment - -
3. Non-Current Liabilities
(a) Long Term Borrowings 3 41,922.51 38,128.87
(b) Deferred Tax Liability (Net) 33 - 1,375.60
(c) Other Long Term Liabilities 4 852.96 555.42
(d) Long Term Provisions 5 - -
4. Current Liabilities
(a) Short Term Borrowings 6 18,239.50 23,144.74
(b) Trade Payables 7 9,130.89 2,246.68
(c) Other Current Liabilities 8 9,903.12 3,201.96
(d) Short Term Provisions 9 52.92 68.64
TOTAL 86,872.12 73,629.46
II. Assets
1. Non-Current Assets
(a) Fixed Assets 10
(i) Tangible Assets 51,174.14 48,645.12
(ii) Intangible Assets 247.32 330.63
(iii) Capital Work in Progress 1,123.96 139.81
(iv) Intangible assets under development - -
(b) Non Current Investments 11 1,362.94 1,362.94
(c) Deferred Tax Asset (Net) - -
(d) Long Term Loans & Advances 12 2,928.43 2,311.14
(e) Other Non-Current Assets 13 526.06 582.64
2. Current Assets
(a) Current Investments 14 5.00 5.00
(b) Inventories 15 17,661.09 12,459.31
(c) Trade Receivables 16 4,601.45 1,393.87
(d) Cash and Cash Equivalents 17 1,329.20 875.00
(e) Short Term Loans & Advances 18 5,905.59 5,521.65
(f ) Other Current Assets 19 6.94 2.35
TOTAL 86,872.12 73,629.46
See accompanying notes to the fnancial statements 26-49
The notes referred to above form an integral part of the Balance Sheet
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
39
Statement of Proft and Loss for the period ended March 31, 2012
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
` in Lakhs
Sl.
No.
Particulars Note
No.
9 months
ended
March 31, 2012
15 months
ended
June 30, 2011
I. Revenue from Operations 20 46,739.09 41,784.06
II. Other Income 21 5.75 10.61
III. Total Revenue (I + II) 46,744.84 41,794.67
IV. Expenses:
Cost of materials consumed 37,800.90 34,882.44
Purchases of Stock-in-Trade - -
Changes in Inventories 22 (4,819.32) (3,308.61)
Employee beneft expenses 23 1,961.64 1,974.10
Finance costs 24 5,178.17 7,823.24
Depreciation and amortisation expenses 2,349.96 3,665.80
Other expenses 25 6,286.42 7,211.32
Total Expenses 48,757.77 52,248.29
V. Proft / (Loss) before exceptional and extraordinary items and tax
(III - IV)
(2,012.93) (10,453.62)
VI. Exceptional items - -
VII. Proft / (Loss) before extraordinary items and tax (V - VI) (2,012.93) (10,453.62)
VIII. Extraordinary items - -
IX. Proft / (Loss) before tax (2,012.93) (10,453.62)
X. Tax Expenses:
(1) Current Income Tax - (123.97)
(2) Deferred Income Tax 33 (1,375.60) (862.24)
(3) Total (1,375.60) (986.21)
XI. Proft / (Loss) for the period (IX - X) (637.33) (9,467.41)
XII. Earning Per Equity Share 46
(1) Basic (6.50) (47.44)
(2) Diluted - -
See accompanying notes to the fnancial statements 26-49
The notes referred to above form an integral part of the Statement of Proft and Loss.
Parrys Sugar Industries Limited
40
Notes forming part of the Accounts
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 1
SHARE CAPITAL
AUTHORISED :
5,19,00,000 (2011: 5,19,00,000) Equity Shares of face value of ` 10/- each 5,190.00 5,190.00
2,10,00,000 (2011: 2,10,00,000 ) (8%) Redeemable Non Cumulative Preference Shares
of face value of ` 11/- each
2,310.00 2,310.00
10,00,00,000 (2011: 10,00,00,000 ) (8%) Redeemable Cumulative Preference Shares of
face value of ` 10/- each 10,000.00 10,000.00
17,500.00 17,500.00
ISSUED, SUBSCRIBED AND PAID-UP:
19,961,707 [2011: 19,961,707] Equity Shares of ` 10/- each fully paid up 1,996.17 1,996.17
Of the above:
[13,963,002 Equity shares of ` 10 each per share were issued as fully paid up to
the shareholders’ of erstwhile M/s Varalakshmi Sugars Limited and M/s Varalakshmi
International Limited on their respective amalgamation with the Company, for
consideration otherwise than in cash.]
[12,975,110 Shares [2011: 12,975,110 ] of `10/- each are held by the Holding Company
M/s E.I.D.-Parry (India) Ltd.]
Preference Shares
(i) 12,831,880 8% Redeemable Non Cumulative Preference shares of ` 11/- each 1,411.51 1,411.51
[The above Non Cumulative Preference shares are held by E.I.D.-Parry (India) Ltd.
and were transferred from GMR Holdings Pvt. Ltd. pursuant to the Share Purchase
Agreement dated 25.04.2010. These shares were earlier issued as fully paid up
to M/s. GMR Holdings Private Limited and other shareholders’ of erstwhile M/s.
Varalakshmi International Limited on its amalgamation with the Company, for
consideration otherwise than in cash.]
[The Preference shares are redeemable not later than 8 years from the date of
issue i.e. August 14, 2004 with a call option to the shareholders for redemption
after three years from the date of issue.]
(ii) 100,000,000 8% Redeemable Cumulative Preference shares of ` 10/- each 10,000.00 7,500.00
[The Preference shares are redeemable not later than 8 years from the date of
issue, i.e. June 30, 2011 for 75,000,000 shares and August 30, 2011 for 25,000,000
shares, with a call option to the shareholders for redemption after three years
from the date of issue.]
13,407.68 10,907.68
Annual Report 2011-12
41
Notes forming part of the Accounts
(i) Details of shareholders holding more than 5 percent of equity shares in the company are as follows:
Name of the Shareholder No. of Shares held
As at March 31, 2012 As at June 30, 2011
Nos. % Nos. %
E.I.D.- Parry (India) Limited 12,975,110 65 12,975,110 65
GMR Holdings Private Limited 4,397,295 22 4,397,295 22
(ii) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at June 30, 2011
Nos. ` in Lakhs Nos. ` in Lakhs
Equity Shares
At the beginning of the period 19,961,707 1,996.17 19,961,707 1,996.17
Issued during the period - - - -
Outstanding at the end of the period 19,961,707 1,996.17 19,961,707 1,996.17
Preference Shares
At the beginning of the period 87,831,880 8,911.51 12,831,880 1,411.51
Issued during the period 25,000,000 2,500.00 75,000,000 7,500
Outstanding at the end of the period 112,831,880 11,411.51 87,831,880 8,911.51
NOTE 2
RESERVES AND SURPLUS
As at
July 1, 2011
Additions Deductions As at
March 31, 2012
Capital Reserves
Capital Redemption Reserve 1,175.00 - - 1,175.00
Securities Premium 991.97 - - 991.97
2,166.97 - - 2,166.97
Revenue Reserves
General Reserve 1,570.73 - - 1,570.73
1,570.73 - - 1,570.73
3,737.70 - - 3,737.70
As at
March 2012
As at
June 2011
Proft and Loss Account Balance (9,737.83) (270.42)
Add: Proft (Loss) for the period (637.33) (9,467.41)
(10,375.16) (9,737.83)
Less:
Interim Dividend on Equity Shares -` Nil per share (2011 : ` Nil per share) - -
Proposed Dividend on Equity Shares -Nil (2011 : ` Nil per share) - -
Dividend Distribution Tax - -
Transfer to Debenture Redemption Reserve - -
Transfer to General Reserve - -
(10,375.16) (9,737.83)
Total Reserves and Surplus (6,637.46) (6,000.13)
Parrys Sugar Industries Limited
42
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 3
LONG TERM BORROWINGS (Also Refer Note 28 )
(a) Secured Term Loans from:
- Banks - Rupee Loan 25,950.00 20,500.00
- Government of India - Sugar Development Fund 2,475.35 3,131.71
28,425.35 23,631.71
(b) Unsecured Term Loans from:
- Inter Corporate Loan 13,497.16 14,497.16
41,922.51 38,128.87
NOTE 4
OTHER LONG TERM LIABILITIES
Trade payables 852.96 555.42
852.96 555.42
NOTE 5
LONG-TERM PROVISIONS
Provision for employee benefts - -
- -
NOTE 6
SHORT TERM BORROWINGS
(a) Loans repayable on demand
- Cash Credit from Bank 2,072.83 7,144.74
- Secured Short Term loan from Banks - Rupee loan 4,166.67 10,000.00
- Unsecured Short Term loan from Banks - Rupee loan 10,000.00 4,000.00
- Inter Corporate Loans 2,000.00 2,000.00
18,239.50 23,144.74
(b) Deposits
- Secured Deposits - -
- Unsecured Deposits - From Customers - -
-
18,239.50 23,144.74
Notes forming part of the Accounts
Annual Report 2011-12
43
Note 6 (a)
Details of Loans and terms of repayment
Lender Name Refer Note As at
March 31,
2012
As at
June 30, 2011
Terms of Repayment
(as at March 31, 2012)
SBI Term Loan 27 (i) 3,000.00 - Repayable during next
7 years
Axis Bank Loan 27 (ii) 20,500.00 20,500.00 Repayable during next
7 years
ICICI Bank Loan 27 (iii) 2,500.00 - Repayable during next
6 years
AB Central Excise Loan - 191.02 Not Applicable
SBM Central Excise Loan - 93.07 Not Applicable
SDF Term Loan I - Sankili Unit - 76.61 Not Applicable
SDF Term Loan II - Sankili Unit 27 (iv) 926.86 1,158.57 Repayable during next
4 years
Cane Development Loan - Sankili Unit 27 (iv) 112.50 112.50 Repayable during next
2 years
SDF - Cogen Loan - Haliyal Unit 27 (v) 1,783.14 1,854.32 Repayable during next
5 years
SDF - Raw Sugar Processing Loan - Haliyal Unit 27 (v) 15.00 22.50 Repayable during next
2 years
SDF Cane Development Loan - Haliyal Unit 27 (v) 75.00 75.00 Repayable during next
2 years
SDF Cane Development Loan - Ramdurg Unit 27 (vi) 75.00 75.00 Repayable during next
2 years
Andhra Bank Short Term Loan - 2,500.00 Not Applicable
Bank of India Short Term Loan 27 (vii) 4,166.67 5,000.00 Repayable during next
5 months
Axis Bank Short Term Loan - 2,500.00 Not Applicable
SBI Cash Credit 27 (viii) 2,072.83 7,144.74 On Demand
Indian Bank Short Term Loan - 4,000.00 Not Applicable
L&T Finance Ltd. Short Term Loan 28 (i) 2,000.00 2000.00 Repayable during next
3 months
Dena Bank Short Term Loan 28 (ii) 5,000.00 - Repayable during next
9 months
Axis Bank Short Term Loan 28 (iii) 5,000.00 - Repayable during next
6 months
EID Parry (India) Ltd. Loans 28 (iv) 13,497.16 14,497.16 Repayable during next
6 months
Total 60,724.16 61,800.47
Notes forming part of the Accounts
Parrys Sugar Industries Limited
44
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 7
TRADE PAYABLES
(a) Dues to Micro Enterprises and Medium Enterprises - -
(Refer Note 34)
(b) Other Trade Payables 9,130.89 2,246.68
9,130.89 2,246.68
NOTE 8
OTHER CURRENT LIABILITIES
(a) Current maturities of long-term debt (Also Refer Note 28 )
- Banks - Rupee Loan 50.00 284.08
- Government of India - Sugar Development Fund 512.15 242.79
- Financial Institutions - -
(b) Interest accrued but not due on borrowings 1,970.44 1,115.59
(c) Unpaid dividends 46.57 56.86
(d) Other payables
- Other Misc Liabilities 6,401.28 891.74
- Advances and Deposits from Customers/Others 922.68 610.90
- Due to Directors - -
9,903.12 3,201.96
NOTE 9
SHORT-TERM PROVISIONS
Provision for employee benefts 52.92 68.64
52.92 68.64
NOTE 10
FIXED ASSETS ` in Lakhs
GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK
Cost/Value
As at 01-07-2011
Additions Deletions Cost/Value
As at 31-03-2012
As at
01-07-2011
For
the year
Deletions As at
31-03-2012
As at
31-03-2012
As at
30-06-2011
Tangible Assets
Land 2,440.43 31.84 - 2,472.27 - - - - 2,472.27 2,440.43
Buildings 9,779.62 381.79 - 10,161.41 1,176.92 220.16 - 1,397.08 8,764.33 8,602.70
Plant and Equipment 46,560.11 4,309.10 - 50,869.21 10,586.34 1,987.81 - 12,574.15 38,295.06 35,973.77
Furniture and Fixtures 2,355.76 17.41 - 2,373.17 966.19 25.48 - 991.67 1,381.50 1,389.57
Vehicles 414.70 65.23 15.34 464.59 176.05 33.23 5.67 203.61 260.98 238.65
61,550.62 4,805.37 15.34 66,340.65 12,905.50 2,266.68 5.67 15,166.51 51,174.14 48,645.12
Intangible Assets
SAP & CMS Project 666.49 - - 666.49 335.86 83.31 - 419.17 247.32 330.63
62,217.11 4,805.37 15.34 67,007.14 13,241.36 2,349.99 5.67 15,585.68 51,421.46 48,975.75
Previous Year 59,115.65 3,159.44 57.98 62,217.11 9,626.79 3,665.80 51.23 13,241.36
Capital Work-in-Progress 1,123.96 139.81
Intangible assets under development - -
52,545.42 49,115.56
Notes forming part of the Accounts
Annual Report 2011-12
45
NOTE 11
NON-CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at July 1,
2011
Acquisitions Sales As at March
31, 2012
As at July
1, 2011
Acquisitions Sales As at March
31, 2012
I. Quoted Investments
Total Quoted Investments - - - - - - - - -
Market Value of Quoted Investments - - - - - - - - -
II. Unquoted Investments
(a) Trade Investments
- Investments in Equity Instruments
Subsidiary Company
Alagawadi Bireshwar Sugars Private Limited 100 102,222 - - 102,222 1,362.94 - - 1,362.94
Total Unquoted Investments 1,362.94 - - 1,362.94
Total Non-Current Investments 1,362.94 - - 1,362.94
Aggregate provision for diminution in value
of investments - - - -
Total Non-Current Investments 1,362.94 - - 1,362.94
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 12
LONG-TERM LOANS AND ADVANCES
Unsecured and considered good unless otherwise stated :
(a) Capital Advances 775.88 -
(b) Security Deposits 585.57 606.19
(c) Loans and advances to related parties 1,322.99 1,312.65
(d) Other loans and advances
- Advance Tax less Provision for Tax 70.20 68.68
- Balance with Customs and Central Excise Authorities - -
- MAT Credit Entitlement 125.35 125.35
- Advance recoverable in cash or in kind or for value to be received
? Unsecured and Considered Good 48.44 198.27
? Considered Doubtful - -
2,928.43 2,311.14
NOTE 13
OTHER NON-CURRENT ASSETS
(a) Long Term Trade Receivables - -
- Secured, considered good - -
- Unsecured considered good 526.06 582.64
- Doubtful - -
(b) Others - -
526.06 582.64
Notes forming part of the Accounts
Parrys Sugar Industries Limited
46
NOTE 14
CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at July 1,
2011
Acquisitions Sales As at March
31, 2012
As at July 1,
2011
Acquisitions Sales As at March
31, 2012
I. Quoted Investments
Other Investments
Metkore Alloys & Industries Ltd.
(formerly Cronimet Alloys India
Ltd .)
2 250,000 - - 250,000 5.00 - - 5.00
Total Quoted Investments 5.00 - - 5.00
Market Value of Quoted
Investments 62.13 - - 38.00
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 15
INVENTORIES
(a) Raw materials 129.87 101.82
(b) Work-in-progress 739.26 149.58
(c) Finished goods 14,783.17 10,658.23
(d) Finished goods in Transit 6.63 15.32
(e) By Products 690.34 576.95
(f ) Stock-in-trade (in respect of goods acquired for trading) - -
(g) Stores and spares 1,311.82 957.41
17,661.09 12,459.31
NOTE 16
TRADE RECEIVABLES (UNSECURED)
Debts outstanding for a period exceeding six months:
(a) Considered good 2,878.58 529.19
(b) Considered doubtful - -
2,878.58 529.19
Other Debts:
Considered good 1,722.87 864.68
4,601.45 1,393.87
Notes forming part of the Accounts
Annual Report 2011-12
47
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 17
CASH AND CASH EQUIVALENTS
(a) Balances with banks
In Current account 259.07 795.30
In Dividend account 46.57 56.86
In Margin Money accounts towards Bank Guarantee 18.68 18.68
In Deposit account
? More than 12 months of maturity - -
? Others 1,000.00 -
(b) Cheques, drafts on hand - -
(c) Cash on hand 4.88 4.16
1,329.20 875.00
NOTE 18
SHORT-TERM LOANS AND ADVANCES
(a) Capital Advances - -
(b) Security Deposits 29.79 -
(c) Loans and advances to related parties - -
(d) Other loans and advances
- Balance with Customs and Central Excise Authorities 2,452.19 2,580.81
- Advance recoverable in cash or in kind or for value to be received
? Unsecured and Considered Good 3,423.61 2,940.84
? Considered Doubtful 622.36 32.44
? Less: Provision for Doubtful Advances (622.36) (32.44)
5,905.59 5,521.65
NOTE 19
OTHER CURRENT ASSETS
Income Accrued on Deposits etc. 6.94 2.35
6.94 2.35
Notes forming part of the Accounts
Parrys Sugar Industries Limited
48
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 20
REVENUE FROM OPERATIONS
(a) Sales of Products 47,153.66 42,984.90
Less : Excise Duty 1,701.08 1,603.60
45,452.58 41,381.30
(b) Sale of services
(c) Other operating revenues - -
- Liabilities/ Provisions no longer required written back 9.27 24.44
- Other income from Power - 60.30
- Insurance Claims Received 353.25 16.55
- Scrap Sales 200.97 61.04
- Sundry Income 723.02 240.43
46,739.09 41,784.06
NOTE 21
OTHER INCOME
Proft on sale of Fixed Assets - -
Proft on sale of Investments - -
Dividend Income - -
Interest on Deposits, etc. 5.75 10.61
5.75 10.61
NOTE 22
CHANGES IN INVENTORIES
(Increase)/Decrease in Stocks
Opening Stock:
Work-in-process 149.58 235.77
Finished Goods 11,250.50 7,855.70
11,400.08 8,091.47
Closing Stock:
Work-in-process 739.26 149.58
Finished Goods 15,480.14 11,250.50
16,219.40 11,400.08
(4,819.32) (3,308.61)
NOTE 23
EMPLOYEE BENEFIT EXPENSES (Refer Note 36)
Salaries, Wages and Bonus 1,446.03 1,589.53
Deputed Employee Cost 271.10 166.45
Contribution to Provident and Other Funds 98.84 106.82
Expenses on Employee Stock Option Scheme (ESOP) - -
Workmen and Staf Welfare Expenses 145.67 111.30
1,961.64 1,974.10
Notes forming part of the Accounts
Annual Report 2011-12
49
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 24
FINANCE COST
(a) Interest expense;
- Debentures - -
- Other Fixed Loans 4351.71 6,168.64
- Others 580.30 997.50
(b) Other borrowing costs 246.16 657.10
(c) Net gain/loss on foreign currency transactions and translation - -
5,178.17 7,823.24
NOTE 25
OTHER EXPENSES
(a) Consumption of Stores, Spares and Consumables 1,312.03 1,373.07
(b) Power and Fuel 475.15 662.29
(c) Rent 22.58 57.41
(d) Repairs and Maintenance
- Buildings 50.12 60.99
- Plant and Machinery 1,258.30 1,231.81
- Others 170.22 390.57
1,478.64 1,683.37
(e) Insurance 95.81 116.90
(f ) Rates and Taxes 74.93 167.87
(g) License Fee 64.14 220.57
(h) Material Handling Expenses 311.37 312.16
(i) Other Manpower Cost 257.67 629.64
(j) Distribution Expenses 15.45 15.16
(k) Travelling and Conveyance 186.10 304.54
(l) Communication Expenses 40.31 64.99
(m) Operation Lease Rentals 560.57 912.51
Printing and Stationery 22.46 24.46(o) Auditors’ Remuneration 12.62 20.00
(p) Directors’ Remuneration 71.30 126.74
(q) Directors’ Fees and Commission 5.35 7.95
(r) Sales Promotion and Publicity - -
(s) Fixed Assets scrapped 2.71 2.25
(t) Professional Charges 99.54 101.76
(u) Provision for Doubtful Debts and Advances 589.92 -
(v) Bad Debts/Advances written of - -
(w) General Manufacturing, Selling and Administration Expenses 587.77 407.68
6,286.42 7,211.32
Notes forming part of the Accounts
Parrys Sugar Industries Limited
50
26. Signifcant Accounting Policies and Notes on Accounts
26.1 Basis of preparation of fnancial statements
The fnancial statements of the Company are prepared to comply in all material aspects with the applicable accounting
principles in India, the Accounting Standards notifed under Sub-section (3C) of Section 211 of the Companies Act,
1956 (hereinafter referred as “the Act”) and other relevant provisions of the Act.
26.2 Use of Estimates
The preparation of fnancial statements requires the management to make estimates and assumptions that afect
the reported balances of assets and liabilities on the date of the fnancial statements and reported amounts of
income and expenses during the reporting period. Management believes that the estimates used in the preparation
of fnancial statements are prudent and reasonable. Actual results could difer from these estimates. Any revision to
accounting estimates is recognized prospectively in the current and future periods.
26.3 Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent improvements thereto including taxes, duties, freight
and other incidental expenses for bringing the asset concerned to its working condition for its intended use,
less accumulated depreciation and impairment loss. Interest on borrowings attributable to qualifying assets are
capitalised and included in the cost of fxed assets as appropriate. Intangible assets are stated at the consideration
paid for acquisition less accumulated amortisation.
26.4 Leases
Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are
classifed as fnance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or the
present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental
paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
Assets acquired as leases, where a signifcant portion of the risk and rewards of ownership are retained by the lessor,
are classifed as operating leases. Lease rentals are charged to the Proft and Loss Account on accrual basis as per
terms of the lease.
26.5 Borrowing costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are charged to revenue.
26.6 Depreciation and Amortisation
Depreciation is provided on straight line method, pro rata to the period of use, at the rates specifed in Schedule XIV
of the Act or the rates based on the useful lives of the assets as estimated by the management, whichever is higher.
The rates based on the useful lives of the assets in the following categories are estimated to be higher than those
specifed in Schedule XIV of the Act:
Electrical Equipment 5.38%
Telephone Equipment 6.33%
Computer Software 16.67%
Leasehold assets are amortized at rate based on the remaining period of lease or the rate specifed in Schedule XIV
of the Act, whichever is higher.
Annual Report 2011-12
51
All individual assets costing ` 5,000/- or less are fully depreciated in the year of purchase.
26.7 Investments
Long term investments are valued at cost. Provision is made to recognize a decline, other than temporary, in the
value of long term investments. Current Investments are stated at lower of cost or market value.
26.8 Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realizable Value. The costs are, in general, determined
on Weighted Average Basis.
b. Finished goods and Work-in-process: Finished goods are valued at lower of cost or Net Realizable Value. Cost
includes direct materials, Labour and a proportion of manufacturing overheads based on normal operating
capacity.
Work In process is valued at lower of cost or Net Realizable Value. The cost is determined up to the estimated
stage of process and includes direct materials, Labour and a proportion of manufacturing overheads based on
normal operating parameters.
c. By Products: At estimated realizable value.
d. Stores and Spares: At lower of cost or Net Realizable Value. The costs are, in general, determined on weighted
average basis.
26.9 Revenue Recognition
Revenue is recognized when the signifcant risks and rewards of ownership of goods have been passed on to the
buyer. Sale of goods is exclusive of sales tax and captive consumption of Molasses, Power and Baggasse. Dividend
Income is recognized in the year in which the right to receive the payment is established.
Income from investments is recognized in the year in which it is accrued and stated at gross of tax deducted at
source.
26.10 Foreign Currency Transactions
All foreign currency transactions are accounted for at the exchange rates prevailing on the date of such transactions.
Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles:
Exchange diferences arising on reporting of long term foreign currency monetary items at rates diferent from those
at which they were initially recorded during the period or reported in previous fnancial statements, are accounted
as below:
(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of
the asset and are depreciated over the balance life of the asset; and
(b) In other cases, the said exchange diferences are accumulated in a ‘Foreign Currency Monetary Items Translation
Diference Account’ and amortized over the balance period of such long term asset/liability but not beyond
March 31, 2020.
All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the
year end and all exchange gains/losses arising there from are adjusted to the Proft and Loss Account, except those
covered by forward contracted rates where the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of the contract.
Exchange diferences on forward contracts are recognised in the Proft and Loss Account in the reporting period in
which the exchange rates change. Any proft or loss arising on cancellation or renewal of such forward contracts is
recognised as income or expense for the year.
Parrys Sugar Industries Limited
52
For forward exchange contracts and other derivatives that are not covered by Accounting Standard (AS) -11 ‘The
Efects of Changes in Foreign Exchange Rates’, the Company follows the guidance in the announcement of the
Institute of Chartered Accountants of India (ICAI) dated March 29, 2008, whereby for each category of derivatives,
the Company records any net mark-to-market losses. Net mark-to-market gains are not recorded for such derivatives.
26.11 Employee Benefts
a. Short Term Employee Benefts
Undiscounted amount of short term employee benefts expected to be paid in exchange for the services
rendered by employees is recognised during the period when the employee renders the services. These benefts
include compensated absences such as paid annual leave and performance incentives.
b. Defned Contribution Plans
These comprise of contributions to employees’ provident fund with the government and certain state plans
like Employees’ State Insurance and Employees’ Pension Scheme. The Company’s payments to the defned
contribution plans are recognized as an expense during the period in which the employees perform the services
that the payment covers.
c. Defned Beneft Plans
Gratuity for employees is covered under a scheme of Life Insurance Corporation of India and contributions in
respect of such scheme are recognized in the Proft and Loss Account. The liability as at the Balance Sheet date is
provided for based on the actuarial valuation, based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the
efect of changes in the actuarial assumptions and are recognised immediately in the Proft and Loss Account
as income or expense.
d. Other Long Term Employee Benefts
Other Long term employee benefts comprise of Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee renders the related services are recognised
as a liability at the present value of the defned beneft obligation at the balance sheet date based on actuarial
valuation carried out at each balance sheet date.
26.12 Earnings per Share
The earnings considered in ascertaining the Company’s Earnings Per Share (EPS) comprise of the net proft after tax
less dividend (including dividend distribution tax) on preference shares. The number of shares used for computing
the basic EPS is the weighted average number of shares outstanding during the year.
26.13 Taxes on Income
Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax
payable in respect of taxable income for the period.
Deferred tax is recognised on timing diferences between the accounting income and the taxable income for the
year and quantifed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/virtual certainty that
sufcient future taxable income will be available against which such deferred tax asset can be realised.
26.14 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable
that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
Annual Report 2011-12
53
made. Provisions, other than employee benefts, are not discounted to their present value and are determined based
on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current management estimates.
26.15 Contingencies
Obligations which are material and whose future outcome cannot be ascertained with reasonable certainty are
treated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts.
26.16 Impairment of Assets
Impairment loss is provided to the extent carrying amount of assets exceeds their recoverable amount. Recoverable
amount is higher of asset’s selling price and its value in use. Value in use is the present value of estimated future cash
fows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable,
willing parties, less the costs of disposal.
26.17 Expenditure
Expenses are net of taxes recoverable, where applicable.
27. Secured Loans
(i) Term Loan & Short Term (Bridge) Loan extended by State Bank of India is primarily secured by Pari-passu frst
charge on fxed Assets of the Company and collaterally secured by second charge on the current assets of the
Company.
(ii) Term Loan extended by Axis Bank Ltd. is primarily secured by Pari-passu frst charge on fxed Assets of the
Haliyal & Sankili Units.
(iii) Term Loan extended by ICICI Bank Ltd. is secured by Pari-passu second charge on fxed Assets of the Company.
The process of charge creation in favour of ICICI Bank Ltd. is pending.
(iv) Loans extended by Sugar Development Fund, Government of India (SDF) for Modernisation/Expansion/Cane
Development at the Sankili Unit is secured by Pari-passu frst charge on movable & immovable properties of
Sankili Unit.
(v) Loans extended by SDF for Congeneration Project/Raw-sugar processing/Cane development at the Haliyal Unit
are secured by Pari-passu frst charge on the movable & immovable properties of Haliyal Unit.
(vi) Loans extended by SDF for Cane development at the Ramdurg Unit is secured by Bank Guarantee.
(vii) Short term Loan extended by Bank of India is secured by Pari-passu frst charge on fxed Assets of the Haliyal
Unit.
(viii) Cash Credit facility extended by State Bank of India is secured by way of hypothecation of entire current assets
of the Company and further secured by second charge on Company’s fxed assets.
The above loans extended by SDF & Banks carry interest rates ranging from 4.00% p.a. to 13.50% p.a. The loans
extended by banks are linked to their Base Rate.
28. Unsecured Loans
(i) Loan extended by L & T Finance Ltd. is unsecured in nature.
(ii) Loan extended by Dena Bank is unsecured in nature
(iii) Loan extended by Axis Bank Ltd. is unsecured in nature.
Parrys Sugar Industries Limited
54
(iv) Loans extended by the Holding Company, EID Parry (India) Ltd. are unsecured in nature.
These loans cannot be withdrawn during the tenancy of the loans extended by SBI, Axis Bank Ltd. & ICICI Bank
Ltd. and hence Classifed as Long Term Borrowings.
The above loans extended by EID Parry (India) Ltd. & Banks carries interest rates ranging from 9.50% p.a. to 13.50%
p.a. The loans extended by banks are linked to their Base Rate.
29. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
of ` 1819.03 Lakhs (2011: ` 1,587.95 Lakhs).
30. Contingent Liabilities not provided for on account of :
` in Lakhs
Particulars 2012 2011
a) Bank Guarantees 254.00 247.42
b) Letter of Credit - -
c) Corporate Guarantees given by the Company to banks in respect of crop
loans to farmers and H&T loan
4599.07 1291.70
d) Arrears of fxed cumulative dividends of Preference shares 1.64 -
e) Claims made by Government Departments against the Company not
acknowledged as debts:
i. Excise claims under appeal 309.04 263.79
ii. Sales tax & Commercial taxes appeal under various states 61.08 79.76
iii. Other claims - -
f ) Preference Dividend attributable to Cumulative Preference Shares 568.31 1.64
31. a) The Ministry of Corporate Afairs, Government of India has vide its Notifcation No. GSR 225(E) dated March
31, 2009 has announced Companies Accounting Standards (Amendment) Rules 2009 prescribing changes to
Accounting Standard 11 on ‘The Efects of Changes in Foreign Exchange Rates’ extended till 31-03-2020.
The Company has, pursuant to the adoption of such principles of Companies (Accounting Standards)
Amendment Rules 2009, exercised the option of recognizing the exchange diferences arising on reporting
of foreign currency monetary items at rates diferent from those at which they were recorded earlier, in the
original cost of such depreciable fxed assets in so far such exchange diferences arose on foreign currency
monetary items relating to the acquisition of a depreciable asset.
Exchange diferences aggregating to ` NIL arising during the year ended March 31, 2012 (2011: ` 0.54 Lakhs)
have been adjusted to the cost of the depreciable assets.
b)
Particulars 2012 2011
Borrowing Cost Capitalised on fxed assets/CWIP 294.34 113.08
32. Operating Leases
i. The Company has entered in to a non-cancellable operating lease agreement with Shri Dhanalakshmi Sahakari
Sakkare Karkhane Niyamit, Ramdurg for the lease of sugar factory together with the specifed assets on Built,
Own, Operate and Transfer basis (BOOT) for a period of 25 years. Lease rentals of ` 560.57 Lakhs (2011: ` 912.51
Lakhs) in respect of the obligation under such lease agreement have been recognized in the Proft and Loss
Account.
Annual Report 2011-12
55
Future obligations of lease rentals applicable to the above lease agreement aggregate to `14,238.40 Lakhs (2011:
` 14,798.97 Lakhs) and are due:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 769.85 753.04
Later than one year and not later than fve years 3,317.37 3,244.91
Later than fve years 10,151.18 10,801.02
Total 14,238.40 14,798.97
ii. The Company has certain operating leases for ofce facilities and residential premises under a cancellable
operating lease agreement. Such agreements are generally with the option of renewal against increased rent
and premature termination of agreement. The charge on account of lease rentals under such agreements to the
Proft and Loss Account for the year is `22.58 Lakhs (2011: ` 57.41 Lakhs). The future obligations of lease rentals
applicable are as under:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 25.14 24.37
33. Deferred Tax (` In Lakhs)
The major components of the deferred tax assets and liabilities on account of timing diferences are as follows:
Deferred Tax Liability/(Asset)
2011-12 2010-11
Deferred Tax Liability
Diference between the written down value of assets as per books of account and
Income Tax Act.
1,375.60 4,475.92
Deferred Tax Asset
Unabsorbed Depreciation (398.50) (3070.46)
Business Loss (977.10) -
Others - (29.86)
Net Deferred Tax Liability – 1,375.60
34. There are no suppliers falling under the Micro, Small and Medium Enterprise registered with the company.
35. With respect to receivables from Transmission Corporation of Andhra Pradesh Limited (APTRANSCO) included under
Sundry Debtors:
a) Amounts aggregating to `777.78 Lakhs [2011:` 715.87 Lakhs] relate to price diference matter in dispute
where the Company has appealed before the Apellate Tribunal for Electricity (ATE) against an order of State
Commission. As the matters are pending before the ATE, the Company, as a matter of prudence, has postponed
the recognition of such amounts as income and a corresponding credit is retained as liability in the books of
account and adjusted against Sundry Debtors as at March 31, 2012.
b) Amounts aggregating to `526.06 Lakhs [2011: ` 582.64 Lakhs] relate to other matters in dispute where the
Company has appealed before the ATE against the orders of State Commission. As the matters are pending
before the ATE, no adjustment has been made in respect of such dues recognised as receivable as at March 31,
2012.
Parrys Sugar Industries Limited
56
36. (a) The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the
Balance Sheet and Proft and Loss Account.
(` in Lakhs)
Particulars Gratuity (Funded)
2011-12 2010-11 2009-10 2008-09
Present Value of obligations at the beginning of
the year
94.54 104.65 84.09 62.03
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Benefts Settled (20.61) (21.60) (16.11) (2.59)
Actuarial loss/(gain) (0.35) (14.24) (0.03) (14.22)
Present Value of obligations at the end of
the period
97.67 94.54 104.65 84.09
Changes in the fair value of planned assets
Fair value of plan assets at beginning of year 136.55 67.38 76.97 41.44
Expected return on plan assets 8.05 8.76 5.51 4.42
Contributions - 79.75 - 30.12
Benefts Paid (20.61) (21.60) (16.11) (2.59)
Actuarial gain/(Loss) on plan assets (0.79) 2.26 1.01 3.58
Fair Value of plan assets at the end of the
year
123.20 136.55 67.38 76.97
Amounts recognized in the Balance Sheet
Projected beneft obligation at the end of the
period
97.67 94.54 104.65 84.09
Fair value of plan assets at end of the period 123.20 136.55 67.38 76.97
Funded status of the plans – asset/(Liability)
recognised in the balance sheet
25.53 42.01 (37.27) (7.12)
Cost for the period
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Expected return on plan assets (8.05) (8.76) (5.51) (4.42)
Net actuarial (gain)/loss recognised in the period (20.61) (11.98) (1.32) (17.81)
Net Cost (4.57) 4.99 29.87 16.64
Assumptions
Discount rate 8.50% 8% 8% 7%
Expected return on assets 8.50% 8% 8% 8%
Rate of Compensation increase 6% 6% 6% 6%
Attrition rate 5% 5% 5% 5%
Retirement expectancy (in years) 60 60 60 58
Expected average remaining service (in Years) 23.20 23.27 23.36 22.12
Mortality rates LIC 1994-
96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
Actual return on plan assets (` In Lakhs) 7.26 9.71 6.52 8.00
Annual Report 2011-12
57
Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected
rate of return on fund assets has been arrived at. Assumed rate of return on assets is expected to vary from year
to year refecting the returns on matching government bonds.
The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken
on account of infation, seniority, promotion and other relevant factors such as supply and demand in the
employment market.
As per the best estimate of the management, contribution of `5.00 lakhs is expected to be paid to the plan
during the year ending March 31, 2013.
(b) Provision made during the year for other long term employee benefts based on the actuarial valuation report
amounted to `NIL (2011: ` 41.54 Lakhs).
(c) During the period, the Company has recognised the following amounts in the Proft and Loss Account, which
are included in Contribution to Provident and Other Funds.
(` in Lakhs)
Particulars 2012 2011
Provident Fund and Employees’ Pension Scheme 98.84 96.40
37. Auditors’ Remuneration and Expenses:
(` in Lakhs)
2011-12 2010-11
(i) Audit Fees 12.50 14.00
(ii) Tax Audit - -
(iii) Company Law matters - -
(iv) Management Services - -
(v) Fees for other services - 6.00
(vi) Reimbursement of out of pocket expenses 0.12 -
Total 12.62 20.00
38. Particulars in respect of Finished Goods Stock
Classes of
Goods
Unit Opening Stock Closing Stock
2011-12 2010-11 2011-12 2010-11
Qty. Value
` Lakhs
Qty. Value
` Lakhs
Qty. Value
` Lakhs
Qty. Value
` Lakhs
Sugar Quintals 437,855 10,096.61 281,732 6,248.63 620,550 13,995.69 437,855 10,096.61
Molasses MT 19,347 560.95 22,010 1,070.61 20,828 545.26 19,347 560.95
Work-in-process Quintals 7,713 173.77 10,008 226.69 34,214 728.00 7,713 173.77
WIP-Molasses MT 30 0.80 19 9.08 1,628 33.34 30 0.80
Bagasse/Bio-mass MT 2,239 16.00 2,393 15.55 26,260 184.83 2,239 16.00
Distillery:
Rectifed Spirit Litres 414,723 98.81 708,860 198.72 393,092 90.71 414,723 98.81
Impure Spirit Litres 32,630 38.10 264,978 55.78 349,450 62.90 32,630 38.10
ENA Litres 1,107,172 275.34 242,941 85.49 1,850,467 427.16 1,107,172 275.34
Ethanol Litres 594,093 125.97 535,344 180.92 750,353 151.51 594,093 125.97
Work in progress Litres - - - - - - - -
11,386.35 8,091.47 16,219.40 11,386.35
Parrys Sugar Industries Limited
58
39. Particulars in respect of Finished Goods – Sales
Classes of Goods Unit Sales (including Excise Duty)
2011-12 2010-11
Qty. Value ` Lakhs Qty. Value ` Lakhs
Sugar Quintals 1,589,519 40,013.30 1,241,396 32,768.23
Molasses* MT 57,220 698.50 65,876 1,298.94
Cogeneration - Power# Units 79,408,742 2,343.24 90,172,760 3,179.31
Distillery **
Rectifed Spirit Litres 3,628,100 1,073.95 3,731,100 859.27
ENA Litres 4,703,000 1,564.59 7,800,000 2,467.27
Impure Spirit Litres 548,600 38.46 539,250 108.07
Ethanol Litres 3,537,000 1,096.93 6,343,600 2,156.75
Others 324.69 147.06
47,153.66 42,984.90
* Includes inter division transfers of 40,833 MT (2011: 31,571 MT) at Nil value.
# Net of captive consumption
** Excludes quantities used in the processing of other distillery products mentioned above.
40. Analysis of Raw Materials Consumed
Description Unit 2011-12 2010-11
Qty. Value ` Lakhs Qty. Value ` Lakhs
Sugarcane MT 1,460,989 37,280.37 1,295,502 30,871.88
Coal MT 1,146 47.98 55,095 2,046.51
Others 472.55 1,964.05
37,800.90 34,882.44
(` In Lakhs)
2011-12 2010-11
41. Value of Imports on C.I.F Basis
Capital Goods - 12.50
Spares 9.82 -
9.82 12.50
42. Expenditure in Foreign Currency
Travel 0.69 1.25
Professional Fee - 0.68
0.69 1.93
43. Earnings in Foreign Currency
Sale of Carbon Credit Emission Reduction 70.13 -
70.13 -
44. The Closing Stock of Finished goods has been valued net of Excise duty payable amounting to `659.83 Lakhs.
Annual Report 2011-12
59
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Parrys Sugar Industries Limited
60
46. Earnings per Share
The computation of earnings per share is set out below:
Particulars 2012 2011
Nominal Value of Equity Shares (`) 10 10
Net Proft/(Loss) after Tax (` Lakhs) (637.33) (9,467.41)
Less : Preference Dividend attributable to Preference Shares (including
corporate tax thereon) (` Lakhs)
660.49 1.64
Net Proft/(Loss) attributable to the Equity Shareholders (` Lakhs) (1,297.82) (9,469.05)
Shares:
Weighted average number of Equity Shares of ` 10 each outstanding during the year 19,961,707 19,961,707
Basic and diluted Earnings/(Loss) – ` Per Share (6.50) (47.44)
47. Related Party Disclosures
i. Names of the related parties and description of relationship.
Relationship Name of the Parties
Holding Company EID Parry (India) Limited
Subsidiary Company Alagawadi Bireshwar Sugars Private Limited (ABSPL)
Fellow Subsidiaries Coromandel International Ltd.
Parry Chemicals Ltd.
CFL Mauritius Limited
Coromandel Brasil Limitada – Partnership.
Sabero Organics Gujarat Limited
Sabero Europe BV
Sabero Australia Pty. Ltd.
Sabero Organics America SA
Sabero Argentina SA
Sadashiva Sugars Ltd.
Parry America Inc.
Parrys Investments Limited
Parrys Sugar Limited
Parry Infrastructure Company Private Limited
Parry Phytoremedies Private Limited
US Nutraceuticals Inc.
Parry Agrochem Exports Limited
Valensa Europe AG
La Belle Botanics LLC
Key Management Personnel Mr. D. Kumaraswamy
Annual Report 2011-12
61
ii. Summary of transactions with the above related parties are as follows:
Nature of the Transaction 2012 2011
Purchase of Machinery
i. Holding Company
EID Parry (India) Limited - 965.42
Purchase of Goods/Services
i. Holding Company
EID Parry (India) Limited 456.61 448.61
ii. Fellow Subsidiary
Coromandel International Limited 15.75 15.72
Sadashiva Sugars Limited 117.64 97.16
Interest on Unsecured Loan
i. Holding Company
EID Parry (India) Limited 908.45 1,029.87
ii. Fellow Subsidiary
Coromandel International Limited 16.38 2.17
Sadashiva Sugars Limited 37.17 -
Sale of Goods/Service
i. Holding Company
EID Parry (India) Limited 332.89 12.79
ii. Fellow Subsidiary
Sadashiva Sugars Limited 264.02 255.26
Coromandel International Limited 55.75 40.20
Investment in Equity Shares
Subsidiary ABSPL - -
Unsecured loans given
Subsidiary – ABSPL 10.34 13.65
Unsecured loans taken
i. Holding Company - EID Parry (India) Limited 3,000.00 23,997.16
ii. Fellow Subsidiary - Coromandel International Limited 2,000.00 900.00
iii. Fellow Subsidiary - Sadashiva Sugars Limited 1,500.00 -
Issue of Preference Shares
i. Holding Company - EID Parry (India) Limited 2,500.00 7,500.00
Remuneration
Key Management Personnel
Mr D. Kumaraswamy 71.30 68.50
Balance Payable /(recoverable) at the end of the year:
i. Holding 15,859.61 15,802.97
ii. Subsidiary (1,322.99) (1,312.65)
iii. Fellow Subsidiaries (65.23) 43.12
iv. Individuals exercising control or signifcant infuence and their relatives - -
v. Enterprises where Individuals exercising control or signifcant infuence
over the company have signifcant infuence
- -
48. Previous year’s fgures have been regrouped/reclassifed to conform to Current year’s classifcation.
49. Previous fnancial year was for a period of ffteen months, whereas 2011-12 is for a period of nine months and hence
fgures are not comparable.
For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Parrys Sugar Industries Limited
62
Cash Flow Statement for the nine months period ended March 31, 2012
` in Lakhs
2012 2011
A. Cash fow from Operating Activities
Net Proft/(Loss) before Taxation (2,012.93) (10,453.62)
Adjustments for:
Depreciation 2,349.96 3,665.80
Bad debts written of - -
Provision for doubtful advances - -
Interest received (5.75) (53.04)
Interest and fnance charges 5,178.17 7,823.24
Provisions no longer required written back (9.27) (24.44)
(Proft) / Loss on sale of fxed assets 2.71 7,515.82 2.25 11,413.81
Operating proft/(loss) before working capital changes 5,502.89 960.19
Adjustments for:
Trade and other receivables (4,150.71) (1,627.97)
Inventories (5,201.78) (3,599.93)
Trade and other payables 12,995.10 3,642.61 (2,309.89) (7,537.79)
Cash generated from/ (used in) operations 9,145.50 (6,577.60)
Interest paid (4,323.32) (6,809.91)
Income taxes paid - 332.20
Net cash from / (used in) operating activities 4,822.18 (13,055.31)
B. Cash from Investing Activities
Purchase of Fixed assets (5,789.52) (2,365.22)
Proceeds from sale of fxed assets 6.99 4.50
Investments in Equity shares of Subsidiaries - -
Proceeds from sale of investments - -
Proceeds from transfer of Aircraft business - -
Interest / dividends received 1.16 51.52
Net cash from / (used in) investing activities (5,781.37) (2,309.20)
C. Cash Flow from Financing Activities
Proceeds from issuance of Share Capital 2,500.00 7,500.00
Proceeds from Short Term loans 16,500.00 28,897.16
Repayments of Short Term loans (22,405.23) (8,400.00)
Proceeds from Long Term loans 5,500.00 59,865.19
Repayment of Long Term loans (671.09) (71,934.84)
Dividend Paid (10.29) (0.06)
Net cash from / (used in) fnancing activities 1,413.39 15,927.45
Net Change In Cash And Cash Equivalents 454.20 562.94
Cash And Cash Equivalents -Opening Balance 875.00 312.06
Cash And Cash Equivalents - Closing Balance 1,329.20 875.00
[Refer Note 3 Below ]
Notes:
1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2012 and the
related Proft and Loss Account for the nine months period ended on that date.
2. The above Cash fow statement has been prepared under the “Indirect Method” as set out in Accounting Standard - 3 on
Cash fow Statements, as notifed under Section 211 (3C) of the Companies Act, 1956.
3. Cash and Cash Equivalents - closing balance include balances aggregating to `46.57 Lakhs [2011: `56.86 Lakhs] with
Scheduled banks in respect of unclaimed dividend, which are not available for use by the Company.
4. Previous year’s fgures have been regrouped wherever necessary in order to conform to this year’s presentation.
This is the Cash Flow Statement referred to in our report of even date For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
63
Auditors’ Report on Consolidated Financial Statements
To the Board of Directors,
Parrys Sugar Industries Limited,
We have audited the attached Consolidated Balance Sheet of Parrys Sugar Industries Limited as at 31st March 2012 and the
Consolidated Statement of Proft and Loss and also the Consolidated Cash Flow Statement for the nine months period ended
on that date annexed thereto. These fnancial statements are the responsibility of the Management. Our responsibility is to
express an opinion on these fnancial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in India. These standards require that we
plan and perform the audit to obtain reasonable assurance whether the fnancial statements are prepared, in all material
respects, in accordance with an identifed fnancial reporting framework and are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in fnancial statements. An audit also
includes assessing the accounting principles used and signifcant estimates made by Management, as well as evaluating the
overall fnancial statements. We believe that our audit provides a reasonable basis of our opinion.
We did not audit the fnancial statements of the Subsidiary M/s. Alagawadi Bireshwar Sugars Private Limited whose fnancial
statements refect total assets and Liabilities of ` 14.29 Crores as at 31st March 2012, total revenues of ` Nil Crores and Cash
Out Flows amounting to ` 0.04 Crores for the period ended 31st March, 2012, whose fnancial statements were audited by
other auditors. These fnancial statements and other fnancial information have been audited by other Auditors whose report
has been furnished to us and opinion on the consolidated fnancial statements to the extent they have been derived from
such fnancial statement is based solely on the report of such other Auditor.
We report that the Consolidated Financial Statements have been prepared by the Company’s Management in accordance
with the requirements of Accounting Standard -21- Consolidated Financial Statements issued by the Institute of Chartered
Accountants of India to the extent they are applicable.
Based on our audit and on consideration of the reports of other auditors on separate fnancial statements, in our opinion and
to the best of our information and according to the explanations given to us, the attached Consolidated Financial Statements
give a true and fair view in conformity with the accounting principle generally accepted in India:
a) In the case of the Consolidated Balance Sheet, of the state of afairs of the Group as at 31st March 2012;
b) In the case of the Consolidated Statement of Proft and Loss, of the loss for nine months period ended on that date; and
c) In the case of the Consolidated Cash Flow Statement, of the cash fows for the nine months period ended on that date.
For R.G.N Price & Co.
Chartered Accountants
Firm Regn. No.: 002785 S
H. S. Venkatesh
Partner
Chennai Membership No. 026666
April 24, 2012
Parrys Sugar Industries Limited
64
` in Lakhs
S.
No.
Particulars Note
No.
As at
March 31, 2012
As at
June 30, 2011
I. EQUITY AND LIABILITIES
Shareholders’ Funds
(a) Share Capital 1 13,407.68 10,907.68
(b) Reserves and Surplus 2 (6,639.43) (6,000.13)
(c) Money received against share warrants - -
2. Share Application Money Pending Allotment - -
3. Non-Current Liabilities
(a) Long Term Borrowings 3 41,922.51 38,128.87
(b) Deferred Tax Liability (Net) 33 - 1,375.60
(c) Other long Term Liabilities 4 852.96 555.42
(d) Long Term Provisions 5 - -
4. Current Liabilities
(a) Short Term Borrowings 6 18,239.50 23,144.74
(b) Trade Payables 7 9,130.89 2,258.39
(c) Other Current Liabilities 8 9,913.79 3,201.96
(d) Short Term Provisions 9 52.92 69.09
TOTAL 86,880.82 73,641.62
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets 10
(i) Tangible Assets 52,338.94 49,809.92
(ii) Intangible Assets 247.32 330.63
(iii) Capital Work in Progress 1,279.38 279.23
(iv) Intangible assets under development - -
(b) Goodwill on Consolidation 1,264.73 1,264.73
(c) Non Current Investments 11 - -
(d) Deferred Tax Asset (Net) - -
(e) Long Term Loans & Advances 12 1,609.37 1,001.79
(f ) Other Non-Current Assets 13 526.06 582.64
2. Current Assets
(a) Current Investments 14 5.00 5.00
(b) Inventories 15 17,661.09 12,459.31
(c) Trade Receivables 16 4,601.45 1,393.87
(d) Cash and bank equivalents 17 1,429.92 979.78
(e) Short Term Loans & Advances 18 5,905.55 5,521.61
(f ) Other current assets 19 12.01 13.11
TOTAL 86,880.82 73,641.62
See accompanying notes to the fnancial statements 26-46
The notes referred to above form an integral part of the Balance Sheet
Consolidated Balance Sheet as at March 31, 2012
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
65
Consolidated Statement of Proft and Loss for the period ended March 31, 2012
` in Lakhs
S.
No.
Particulars Note
No.
9 months
ended March
31, 2012
15 months
ended
June 30, 2011
I Revenue from Operations 20 46,739.09 41,784.06
II Other Income 21 5.75 10.61
III Total Revenue (I + II) 46,744.84 41,794.67
IV Expenses:
Cost of materials consumed 37,800.90 34,882.44
Purchases of Stock-in-Trade - -
Changes in Inventories 22 (4,819.32) (3,308.61)
Employee beneft expenses 23 1,961.64 1,974.10
Finance costs 24 5,178.17 7,823.24
Depreciation and amortisation expenses - 2,349.96 3,665.80
Other expenses 25 6,288.39 7,211.32
Total Expenses 48,759.74 52,248.29
V Proft / (Loss) before exceptional and extraordinary items and tax
(III - IV)
(2,014.90) (10,453.62)
VI Exceptional items - -
VII Proft / (Loss) before extraordinary items and tax (V - VI) (2,014.90) (10,453.62)
VIII Extraordinary items -
IX Proft / (Loss) before tax (2,014.90) (10,453.62)
X Tax Expenses:
(1) Current Income Tax - (123.97)
(2) Deferred Income Tax 33 (1,375.60) (862.24)
(3) Total (1,375.60) (986.21)
XI Proft / (Loss) for the period (IX - X) (639.30) (9,467.41)
XII Earning Per Equity Share 43
(1) Basic (6.51) (47.44)
(2) Diluted - -
See accompanying notes to the fnancial statements 26-46
The notes referred to above form an integral part of the Statement of Proft and Loss
In terms of our report of even date attached For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Parrys Sugar Industries Limited
66
Notes forming part of the Consolidated Accounts
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 1
SHARE CAPITAL
AUTHORISED :
Preference Shares:
5,19,00,000 (2011: 5,19,00,000) Equity Shares of face value of ` 10/- each 5,190.00 5,190.00
2,10,00,000 (2011: 2,10,00,000 ) (8%) Redeemable Non Cumulative Preference Shares
of face value of ` 11/- each 2,310.00 2,310.00
10,00,00,000 (2011: 10,00,00,000 ) (8%) Redeemable Cumulative Preference Shares of
face value of ` 10/- each 10,000.00 10,000.00
17,500.00 17,500.00
ISSUED, SUBSCRIBED AND PAID-UP
19,961,707 [2011: 19,961,707] Equity Shares of ` 10/- each fully paid up 1,996.17 1,996.17
Of the above:
[13,963,002 Equity Shares of ` 10 each per share were issued as fully paid up to
the shareholders’ of erstwhile M/s Varalakshmi Sugars Limited and M/s Varalakshmi
International Limited on their respective amalgamation with the Company, for
consideration otherwise than in cash.]
[12,975,110 Shares [2011: Nil] of `10/- each are held by the Holding Company M/s
E.I.D.-Parry (India) Ltd.]
Preference Shares
(i) 12,831,880 8% Redeemable Non-Cumulative Preference shares of ` 11/- each 1,411.51 1,411.51
[The above Non-Cumulative Preference shares are held by E.I.D.-Parry (India) Ltd.
and were transferred from GMR Holdings Pvt. Ltd. pursuant to the Share Purchase
Agreement dated 25.04.2010. These shares were earlier issued as fully paid up
to M/s. GMR Holdings Private Limited and other shareholders’ of erstwhile M/s.
Varalakshmi International Limited on its amalgamation with the Company, for
consideration otherwise than in cash.]
[The Preference shares are redeemable not later than 8 years from the date of
issue i.e. August 14, 2004 with a call option to the shareholders for redemption
after three years from the date of issue.]
(ii) 100,000,000 8% Redeemable Cumulative Preference shares of ` 10/- each 10,000.00 7,500.00
[The Preference shares are redeemable not later than 8 years from the date of
issue, i.e. June 30, 2011 for 75,000,000 shares and August 30, 2011 for 25,000,000
shares, with a call option to the shareholders for redemption after three years
from the date of issue.]
13,407.68 10,907.68
Annual Report 2011-12
67
Notes forming part of the Consolidated Accounts
(i) Details of shareholders holding more than 5 percent of equity shares in the company are as follows:
Name of the Shareholder No. of shares held
As at March 31, 2012 As at June 30, 2011
Nos. % Nos. %
E.I.D.- Parry (India) Limited 12,975,110 65 12,975,110 65
GMR Holdings Private Limited 4,397,295 22 4,397,295 22
(ii) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at June 30, 2011
Nos. ` in Lakhs Nos. ` in Lakhs
Equity Shares
At the beginning of the period 19,961,707 1,996.17 19,961,707 1,996.17
Issued during the period - - - -
Outstanding at the end of the period 19,961,707 1,996.17 19,961,707 1,996.17
Preference Shares
At the beginning of the period 87,831,880 8,911.51 12,831,880 1,411.51
Issued during the period 25,000,000 2,500.00 75,000,000.00 7,500.00
Outstanding at the end of the period 112,831,880 11,411.51 87,831,880 8,911.51
NOTE 2
RESERVES AND SURPLUS
As at
July 1, 2011
Additions Elimination
March 31, 2012
As at
March 31, 2012
Capital Reserves
Capital Redemption Reserve 1,175.00 - - 1,175.00
Securities Premium 991.97 - - 991.97
2,166.97 - 2,166.97
Revenue Reserves
General Reserve 1,570.73 - - 1,570.73
1,570.73 - - 1,570.73
3,737.70 - - 3,737.70
As at
March 2012
As at
June 2011
Proft and Loss Account Balance (9,737.83) (270.42)
Add: Proft (Loss) for the period (639.30) (9,467.41)
(10,377.13) (9,737.83)
Less:
Interim Dividend on Equity Shares - ` Nil per share (2011 : ` Nil per share) - -
Proposed Dividend on Equity Shares - ` Nil (2011 : ` Nil per share) - -
Dividend Distribution Tax - -
Transfer to Debenture Redemption Reserve - -
Transfer to General Reserve - -
(10,377.13) (9,737.83)
Total Reserves and Surplus (6,639.43) (6,000.13)
Parrys Sugar Industries Limited
68
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 3
LONG TERM BORROWINGS (Also Refer Note 28)
(a) Secured Term Loans from:
- Banks - Rupee Loan 25,950.00 20,500.00
- Government of India - Sugar Development Fund 2,475.35 3,131.71
28,425.35 23,631.71
(b) Unsecured Loans from:
- Inter corporate Loan 13,497.16 14,497.16
41,922.51 38,128.87
NOTE 4
OTHER LONG TERM LIABILITIES
Trade payables 852.96 555.42
852.96 555.42
NOTE 5
LONG-TERM PROVISIONS
Provision for employee benefts - -
- -
NOTE 6
SHORT TERM BORROWINGS
(a) Loans repayable on demand
- Cash Credit from Bank 2,072.83 7,144.74
- Secured Short Term loan from Banks - Rupee loan 4,166.67 10,000.00
- Unsecured Short Term loan from Banks - Rupee loan 10,000.00 4,000.00
- Inter corporate Loans 2,000.00 2,000.00
18,239.50 23,144.74
(b) Deposits
- Secured Deposits - -
- Unsecured Deposits - From Customers - -
-
18,239.50 23,144.74
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
69
Note 6 (a)
Details of Loans and terms of repayment
Lender Name Refer Note. As at
March 31, 2012
As at
June 30, 2011
Terms of Repayment
(as at March 31, 2012)
SBI Term Loan 27 (i) 3,000.00 - Repayable during next
7 years
Axis Bank Loan 27 (ii) 20,500.00 20,500.00 Repayable during next 7
years
ICICI Bank Loan 27 (iii) 2,500.00 - Repayable during next 6
years
AB Central Excise Loan - 191.02 Not Applicable
SBM Central Excise Loan - 93.07 Not Applicable
SDF Term Loan I - Sankili Unit - 76.61 Not Applicable
SDF Term Loan II - Sankili Unit 27 (iv) 926.86 1,158.57 Repayable during next
4 years
Cane Development Loan - Sankili Unit 27 (iv) 112.50 112.50 Repayable during next
2 years
SDF - Cogen Loan - Haliyal Unit 27 (v) 1,783.14 1,854.32 Repayable during next
5 years
SDF - Raw Sugar Processing Loan - Haliyal
Unit
27 (v) 15.00 22.50 Repayable during next
2 years
SDF Cane Development Loan - Haliyal Unit 27 (v) 75.00 75.00 Repayable during next
2 years
SDF Cane Development Loan - Ramdurg
Unit
27 (vi) 75.00 75.00 Repayable during next
2 years
Andhra Bank Short Term Loan - 2,500.00 Not Applicable
Bank of India Short Term Loan 27 (vii) 4,166.67 5,000.00 Repayable during next
5 months
Axis Bank Short Term Loan - 2,500.00 Not Applicable
SBI Cash Credit 27 (viii) 2,072.83 7,144.74 On Demand
Indian Bank Short Term Loan - 4,000.00 Not Applicable
L&T Finance Ltd. Short Term Loan 28 (i) 2,000.00 2000.00 Repayable during next
3 months
Dena Bank Short Term Loan 28 (ii) 5,000.00 - Repayable during next
9 months
Axis Bank Short Term Loan 28 (iii) 5,000.00 - Repayable during next
6 months
EID Parry (India) Ltd. Loans 28 (iv) 13,497.16 14,497.16 Repayable during next
6 months
Total 60,724.16 61,800.47
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
70
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 7
TRADE PAYABLES
(a) Dues to Micro Enterprises and Medium Enterprises - -
(Refer Note 34)
(b) Other Trade Payables 9,130.89 2,258.39
9,130.89 2,258.39
NOTE 8
OTHER CURRENT LIABILITIES
(a) Current maturities of long-term debt (Also Refer Note 28 )
- Banks - Rupee Loan 50.00 284.08
- Government of India - Sugar Development Fund 512.15 242.79
- Financial Institutions - -
(b) Interest accrued but not due on borrowings 1,970.44 1,115.59
(c) Unpaid dividends 46.57 56.86
(d) Other payables
- Other Misc. Liabilities 6,411.95 891.74
- Advances and Deposits from Customers/Others 922.68 610.90
- Due to Directors - -
9,913.79 3,201.96
NOTE 9
SHORT-TERM PROVISIONS
Provision for employee benefts 52.92 69.09
52.92 69.09
NOTE 10
FIXED ASSETS ` in Lakhs
GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK
Cost/Value
As at 01-07-2011
Additions Deletions Cost/Value
As at 31-03-2012
As at
01-07-2011
For
the year
Deletions As at
31-03-2012
As at
31-03-2012
As at
30-06-2011
Tangible Assets
Land 3,605.23 31.84 - 3,637.07 - - - - 3,637.07 3,605.23
Buildings 9,779.62 381.79 - 10,161.41 1,176.92 220.16 - 1,397.08 8,764.33 8,602.70
Plant and Equipment 46,560.11 4,309.10 - 50,869.21 10,586.34 1,987.81 - 12,574.15 38,295.06 35,973.77
Furniture and Fixtures 2,355.76 17.41 - 2,373.17 966.19 25.48 - 991.67 1,381.50 1,389.57
Vehicles 414.70 65.23 15.34 464.59 176.05 33.23 5.67 203.61 260.98 238.65
62,715.42 4,805.37 15.34 67,505.45 12,905.50 2,266.68 5.67 15,166.51 52,338.94 49,809.92
Intangible Assets
SAP & CMS Project 666.49 - - 666.49 335.86 83.31 - 419.17 247.32 330.63
63,381.91 4,805.37 15.34 68,171.94 13,241.36 2,349.99 5.67 15,585.68 52,586.26 50,140.55
Previous Year 60,280.45 3,159.44 57.98 63,381.91 9,626.79 3,665.80 51.23 13,241.36
Capital Work-in-Progress 1,279.38 279.23
Intangible assets under development - -
53,865.64 50,419.78
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
71
NOTE 11
NON-CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at
July 1, 2011
Acquisitions Sales As at
March 31, 2012
As at
July 1, 2011
Acquisitions Sales As at
March 31, 2012
I. Quoted Investments - - - - - - - -
II. Unquoted Investments - - - - - - - -
` in Lakhs
As at
March 31,
2012
As at
June 30, 2011
NOTE 12
LONG-TERM LOANS AND ADVANCES
Unsecured and considered good unless otherwise stated :
(a) Capital Advances 775.88 -
(b) Security Deposits 585.57 606.19
(c) Loans and advances to related parties - -
(d) Other loans and advances
- Advance Tax less Provision for Tax 74.13 71.98
- Balance with Customs and Central Excise Authorities - -
- MAT Credit Entitlement 125.35 125.35
- Advance recoverable in cash or in kind or for value to be received
? Unsecured and Considered Good 48.44 198.27
? Considered Doubtful - -
1,609.37 1,001.79
NOTE 13
OTHER NON-CURRENT ASSETS
(a) Long Term Trade Receivables
- Secured, considered good - -
- Unsecured considered good 526.06 582.64
- Doubtful -
(b) Others - -
526.06 582.64
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
72
NOTE 14
CURRENT INVESTMENTS
Nominal
Value
Nos. Amount (` In Lakhs)
` As at
July 1, 2011
Acquisitions Sales
As at
March 31, 2012
As at
July 1, 2011
Acquisitions Sales
As at
March 31, 2012
I. Quoted Investments
Other Investments
Metkore Alloys & Industries Ltd.
(formerly Cronimet Alloys India Ltd. )
2 250,000 - - 250,000 5.00 - - 5.00
II. Government Securities
National Savings Certifcate
Total Quoted Investments 5.00 - - 5.00
Market Value of Quoted
Investments 62.13 - - 38.00
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 15
INVENTORIES
(a) Raw materials 129.87 101.82
(b) Work-in-progress 739.26 149.58
(c) Finished goods 14,783.17 10,658.23
(d) Finished goods in Transit 6.63 15.32
(e) By Products 690.34 576.95
(f ) Stock-in-trade (in respect of goods acquired for trading) - -
(g) Stores and spares 1,311.82 957.41
17,661.09 12,459.31
NOTE 16
TRADE RECEIVABLES (UNSECURED)
Debts outstanding for a period exceeding six months:
(a) Considered good 2,878.58 529.19
(b) Considered doubtful - -
2,878.58 529.19
Other Debts:
Considered good 1,722.87 864.68
4,601.45 1,393.87
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
73
` in Lakhs
As at
March 31, 2012
As at
June 30, 2011
NOTE 17
CASH AND CASH EQUIVALENTS
(a) Balances with banks
In Current account 259.08 799.37
In Dividend account 46.57 56.86
In Margin Money accounts towards Bank Guarantee 118.68 18.68
In Deposit account
? More than 12 months of maturity - 100.00
? Others 1,000.00 -
(b) Cheques, drafts on hand - -
(c) Cash on hand 5.59 4.87
1,429.92 979.78
NOTE 18
SHORT-TERM LOANS AND ADVANCES
(a) Capital Advances - -
(b) Security Deposits 29.79 -
(c) Loans and advances to related parties - -
(d) Other loans and advances
- Balance with Customs and Central Excise Authorities 2,452.19 2,580.81
- Advance recoverable in cash or in kind or for value to be received - -
? Unsecured and Considered Good 3,423.57 2,940.80
? Considered Doubtful 622.36 32.44
? Less: Provision for Doubtful Advances (622.36) (32.44)
5,905.55 5,521.61
NOTE 19
OTHER CURRENT ASSETS
Income Accrued on Deposits etc. 12.01 13.11
12.01 13.11
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
74
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 20
REVENUE FROM OPERATIONS
(a) Sales of Products 47,153.66 42,984.90
Less : Excise Duty 1,701.08 1,603.60
45,452.58 41,381.30
(b) Sale of services - -
(c) Other operating revenues
- Liabilities/Provisions no longer required written back 9.27 24.44
- Other income from Power - 60.30
- Insurance Claims Received 353.25 16.55
- Scrap Sales 200.97 61.04
- Sundry Income 723.02 240.43
46,739.09 41,784.06
NOTE 21
OTHER INCOME
Proft on sale of Fixed Assets -
Proft on sale of Investments -
Dividend Income
Interest on Deposits, etc. 5.75 10.61
5.75 10.61
NOTE 22
CHANGES IN INVENTORIES
(Increase)/Decrease in Stocks
Opening Stock:
Work-in-process 149.58 235.77
Finished Goods 11,250.50 7,855.70
11,400.08 8,091.47
Closing Stock:
Work-in-process 739.26 149.58
Finished Goods 15,480.14 11,250.50
16,219.40 11,400.08
(4,819.32) (3,308.61)
NOTE 23
EMPLOYEE BENEFIT EXPENSES (Refer Note 36)
Salaries, Wages and Bonus 1,446.03 1,589.53
Deputed Employee Cost 271.10 166.45
Contribution to Provident and Other Funds 98.84 106.82
Expenses on Employee Stock Option Scheme (ESOP) - -
Workmen and Staf Welfare Expenses 145.67 111.30
1,961.64 1,974.10
Notes forming part of the Consolidated Accounts
Annual Report 2011-12
75
` in Lakhs
9 months ended
March 31, 2012
15 months ended
June 30, 2011
NOTE 24
FINANCE COST
(a) Interest expense
- Debentures - -
- Other Fixed Loans 4,351.71 6,168.64
- Others 580.30 997.50
(b) Other borrowing costs 246.16 657.10
(c) Net gain/loss on foreign currency transactions and translation - -
5,178.17 7,823.24
NOTE 25
OTHER EXPENSES
(a) Consumption of Stores, Spares and Consumables 1,312.03 1,373.07
(b) Power and Fuel 475.15 662.29
(c) Rent 22.58 57.41
(d) Repairs and Maintenance
- Buildings 50.12 60.99
- Plant and Machinery 1,258.30 1,231.81
- Others 170.22 390.57
1,478.64 1,683.37
(e) Insurance 95.81 116.90
(f ) Rates and Taxes 75.57 167.87
(g) License Fee 64.14 220.57
(h) Material Handling Expenses 311.37 312.16
(i) Other Manpower Cost 257.67 629.64
(j) Distribution Expenses 15.45 15.16
(k) Travelling and Conveyance 186.10 304.54
(l) Communication Expenses 40.31 64.99
(m) Operation Lease Rentals 560.57 912.51
Printing and Stationery 22.46 24.46(o) Auditors’ Remuneration 13.95 20.00
(p) Directors’ Remuneration 71.30 126.74
(q) Directors’ Fees and Commission 5.35 7.95
(r) Sales Promotion and Publicity - -
(s) Fixed Assets scrapped 2.71 2.25
(t) Professional Charges 99.54 101.76
(u) Provision for Doubtful Debts and Advances 589.92 -
(v) Bad Debts/Advances written of - -
(w) General Manufacturing, Selling and Administration Expenses 587.77 407.68
6,288.39 7,211.32
Notes forming part of the Consolidated Accounts
Parrys Sugar Industries Limited
76
26. Signifcant Accounting Policies and Notes on Consolidated Accounts
26.1 (a) Principles of Consolidation
The consolidated fnancial statements include fnancial statements of the Company and its subsidiary
companies. Subsidiary companies are those companies in which Parrys Sugar Industries Limited, either directly
or indirectly, has interest of more than one half of voting power or otherwise has power to exercise control over
operations. Subsidiaries are consolidated from the date on which efective control is transferred to the group till
the date such control exists. The consolidated fnancial statements are prepared in accordance with Accounting
Standard (AS) 21 on Consolidated Financial Statements as specifed in the Companies (Accounting Standard)
Rules, 2006, and the relevant provisions of the Companies Act, 1956.
All intra group transactions, balances and unrealised profts and losses on transactions between the group
companies are eliminated.
Minority interest represents the amount of equity attributable to minority shareholders/partners at the date on
which investment in subsidiary is made and its share of movements in equity.
The details of the subsidiary considered in the consolidated fnancial statements for the year ended March 31,
2012, along with the shareholding, is listed below:
Name of the Company Relationship % of Shareholding as at
March 31,
2012
June 30, 2011
Alagawadi Bireshwar Sugars Private Limited Subsidiary 100% 100%
(b) Basis of preparation of fnancial statements
The fnancial statements are prepared to comply in all material aspects with the applicable accounting principles
in India, the Accounting Standards notifed under Sub-section (3C) of Section 211 of the Companies Act, 1956
(hereinafter referred as “the Act”) and other relevant provisions of the Act.
26.2 Use of Estimates
The preparation of fnancial statements requires the management to make estimates and assumptions that afect
the reported balances of assets and liabilities on the date of the fnancial statements and reported amounts of
income and expenses during the reporting period. Management believes that the estimates used in the preparation
of fnancial statements are prudent and reasonable. Actual results could difer from these estimates. Any revision to
accounting estimates is recognized prospectively in the current and future periods.
26.3 Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent improvements thereto including taxes, duties, freight
and other incidental expenses for bringing the asset concerned to its working condition for its intended use,
less accumulated depreciation and impairment loss. Interest on borrowings attributable to qualifying assets are
capitalised and included in the cost of fxed assets as appropriate. Intangible assets are stated at the consideration
paid for acquisition less accumulated amortisation.
26.4 Leases
Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are
classifed as fnance leases. Such leases are capitalised at the inception of the lease at lower of the fair value or the
present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental
paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the
Annual Report 2011-12
77
outstanding liability for each period. Assets acquired as leases, where a signifcant portion of the risk and rewards
of ownership are retained by the lessor, are classifed as operating leases. Lease rentals are charged to the Proft and
Loss Account on accrual basis as per terms of the lease.
26.5 Borrowing costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are charged to revenue.
26.6 Depreciation and Amortisation
Depreciation is provided on straight line method, pro rata to the period of use, at the rates specifed in schedule XIV
of the Act or the rates based on the useful lives of the assets as estimated by the management, whichever is higher.
The rates based on the useful lives of the assets in the following categories are estimated to be higher than those
specifed in Schedule XIV of the Act:
Electrical Equipment 5.38%
Telephone Equipment 6.33%
Computer Software 16.67%
Leasehold assets are amortized at rate based on the remaining period of lease or the rate specifed in Schedule XIV
of the Act, whichever is higher.
All individual assets costing ` 5,000/- or less are fully depreciated in the year of purchase.
26.7 Investments
Long term investments are valued at cost. Provision is made to recognize a decline, other than temporary, in the
value of long term investments. Current Investments are stated at lower of cost or market value.
26.8 Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realizable Value. The costs are, in general, determined
on Weighted Average Basis.
b. Finished goods and Work-in-process: Finished goods are valued at lower of cost or Net Realizable Value. Cost
includes direct materials, Labour and a proportion of manufacturing overheads based on normal operating
capacity. Work In process is valued at lower of cost or Net Realizable Value. The cost is determined up to the
estimated stage of process and includes direct materials, Labour and a proportion of manufacturing overheads
based on normal operating parameters.
c. By Products: At estimated realizable value.
d. Stores and Spares: At lower of cost or Net Realizable Value. The costs are, in general, determined on weighted average
basis.
26.9 Revenue Recognition
Revenue is recognized when the signifcant risks and rewards of ownership of goods have been passed on to the
buyer. Sale of goods is exclusive of sales tax and captive consumption of Molasses, Power and Baggasse.
Dividend Income is recognized in the year in which the right to receive the payment is established.
Income from investments is recognized in the year in which it is accrued and stated at gross of tax deducted at
source.
Parrys Sugar Industries Limited
78
26.10 Foreign Currency Transactions
All foreign currency transactions are accounted for at the exchange rates prevailing on the date of such transactions.
Liabilities/assets in foreign currencies are reckoned in the accounts as per the following principles:
Exchange diferences arising on reporting of long term foreign currency monetary items at rates diferent from those
at which they were initially recorded during the period or reported in previous fnancial statements, are accounted
as below:
(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the cost of
the asset and are depreciated over the balance life of the asset; and
(b) In other cases, the said exchange diferences are accumulated in a ‘Foreign Currency Monetary Items Translation
Diference Account’ and amortized over the balance period of such long term asset/liability but not beyond
March 31, 2020.
All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the
year end and all exchange gains/losses arising there from are adjusted to the Proft and Loss Account, except those
covered by forward contracted rates where the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of the contract.
Exchange diferences on forward contracts are recognised in the Proft and Loss Account in the reporting period in
which the exchange rates change. Any proft or loss arising on cancellation or renewal of such forward contracts is
recognised as income or expense for the year.
For forward exchange contracts and other derivatives that are not covered by Accounting Standard (AS) -11 ‘The
Efects of Changes in Foreign Exchange Rates’, the Company follows the guidance in the announcement of the
Institute of Chartered Accountants of India (ICAI) dated March 29, 2008, whereby for each category of derivatives,
the Company records any net mark-to-market losses. Net mark-to-market gains are not recorded for such derivatives.
26.11 Employee Benefts
a. Short Term Employee Benefts :
Undiscounted amount of short term employee benefts expected to be paid in exchange for the services
rendered by employees is recognised during the period when the employee renders the services. These benefts
include compensated absences such as paid annual leave and performance incentives.
b. Defned Contribution Plans:
These comprise of contributions to employees’ provident fund with the government and certain state plans
like Employees’ State Insurance and Employees’ Pension Scheme. The Company’s payments to the defned
contribution plans are recognized as an expense during the period in which the employees perform the services
that the payment covers.
c. Defned Beneft Plans:
Gratuity for employees is covered under a scheme of Life Insurance Corporation of India and contributions in
respect of such scheme are recognized in the Proft and Loss Account. The liability as at the Balance Sheet date is
provided for based on the actuarial valuation, based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses comprise experience adjustments and the
efect of changes in the actuarial assumptions and are recognised immediately in the Proft and Loss Account
as income or expense.
d. Other Long Term Employee Benefts :
Other Long term employee benefts comprise of Compensated absences which are not expected to occur within
Annual Report 2011-12
79
twelve months after the end of the period in which the employee renders the related services are recognised
as a liability at the present value of the defned beneft obligation at the balance sheet date based on actuarial
valuation carried out at each balance sheet date.
26.12 Earnings per Share
The earnings considered in ascertaining the Company’s Earnings Per Share (EPS) comprise of the net proft after tax
less dividend (including dividend distribution tax) on preference shares. The number of shares used for computing
the basic EPS is the weighted average number of shares outstanding during the year.
26.13 Taxes on Income
Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax
payable in respect of taxable income for the period.
Deferred tax is recognised on timing diferences between the accounting income and the taxable income for the
year and quantifed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/virtual certainty that
sufcient future taxable income will be available against which such deferred tax asset can be realised.
26.14 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable
that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
made. Provisions, other than employee benefts, are not discounted to their present value and are determined based
on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current management estimates.
26.15 Contingencies
Obligations which are material and whose future outcome cannot be ascertained with reasonable certainty are
treated as contingent and, to the extent not provided for, are disclosed by way of notes on the accounts.
26.16 Impairment of Assets
Impairment loss is provided to the extent carrying amount of assets exceeds their recoverable amount. Recoverable
amount is higher of asset’s selling price and its value in use. Value in use is the present value of estimated future cash
fows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable,
willing parties, less the costs of disposal.
26.17 Expenditure
Expenses are net of taxes recoverable, where applicable.
27. Secured Loans
(i) Term Loan & Short Term (Bridge) Loan extended by State Bank of India is primarily secured by Pari-passu frst
charge on fxed Assets of the Company and collaterally secured by second charge on the current assets of the
Company.
(ii) Term Loan extended by Axis Bank Ltd. is primarily secured by Pari-passu frst charge on fxed Assets of the
Haliyal & Sankili Units.
(iii) Term Loan extended by ICICI Bank Ltd. is secured by Pari-passu second charge on fxed Assets of the Company.
The process of charge creation in favour of ICICI Bank Ltd. is pending.
Parrys Sugar Industries Limited
80
(iv) Loans extended by Sugar Development Fund, Government of India (SDF) for Modernisations/Expansion/Cane
Development at our Sankili Unit is secured by Pari-passu frst charge on movable & immovable properties of the
Sankili Unit.
(v) Loans extended by SDF for Cogeneration Project/Raw-Sugar Processing/Cane development at our Haliyal Unit
is secured by Pari-passu frst charge on movable & immovable properties of the Haliyal Unit.
(vi) Loans extended by SDF for Cane development at the Ramdurg Unit is secured by Bank Guarantee.
(vii) Short Term Loan extended by Bank of India is secured by Pari-passu frst charge on fxed assets of the Haliyal
Unit.
(viii) Cash Credit facility extended by State Bank of India is secured by way of hypothecation of entire current assets
of the company and further secured by second charge on company’s fxed assets.
The above loans extended by SDF & Banks carry interest rates ranging from 4.00% p.a. to 13.50% p.a. The loans
extended by banks are linked to their Base Rate.
28. Unsecured Loans
(i) Loan extended by L & T Finance Ltd. is unsecured in nature.
(ii) Loan extended by Dena Bank is unsecured in nature.
(iii) Loan extended by Axis Bank Ltd. is unsecured in nature.
(iv) Loans are extended by the Holding Company. EID Parry (India) Ltd. are unsecured in nature.
These loans cannot be withdrawn during the tenancy of the loans extended by SBI, Axis Bank Ltd. & ICICI Bank
Ltd. and hence classifed as Long Term Borrowings.
The above loans extended by EID Parry (India) Ltd. & Banks carries interest rates ranging from 9.50% p.a. to 13.50%
p.a. The loans extended by banks are linked to their Base Rate.
29. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
of `1,819.03 Lakhs (2011: `1,587.95 Lakhs).
30. Contingent Liabilities not provided for on account of :
` In Lakhs
Particulars 2012 2011
a) Bank Guarantees 354.00 347.42
b) Letter of Credit - -
c) Corporate Guarantees given by the Company to banks in respect of crop
loans to farmers and H&T loan
4,599.07 1,291.70
d) Arrears of fxed cumulative dividends of Preference shares 1.64 -
e) Claims made by Government Departments against the Company not
acknowledged as debts:
i. Excise claims under appeal 309.04 263.79
ii. Sales tax & Commercial taxes appeal under various states 61.08 79.76
iii. Other claims (Entry Tax) - -
f ) Preference Dividend attributable to Cumulative Preference Shares 568.31 1.64
31. a) The Ministry of Corporate Afairs, Government of India has vide its Notifcation No. GSR 225(E) dated March
31, 2009 has announced Companies Accounting Standards (Amendment) Rules 2009 prescribing changes to
Annual Report 2011-12
81
Accounting Standard 11 on ‘The Efects of Changes in Foreign Exchange Rates’ extended till 31-03-2020.
The Company has, pursuant to the adoption of such principles of Companies (Accounting Standards)
Amendment Rules 2009, exercised the option of recognizing the exchange diferences arising on reporting
of foreign currency monetary items at rates diferent from those at which they were recorded earlier, in the
original cost of such depreciable fxed assets in so far such exchange diferences arose on foreign currency
monetary items relating to the acquisition of a depreciable asset as below:
Exchange diferences aggregating to ` NIL Lakhs arising during the year ended March 31, 2012 (2011: ` 0.54
Lakhs) have been adjusted to the cost of the depreciable assets.
b)
(` in Lakhs)
Particulars 2012 2011
Borrowing Cost Capitalised on fxed assets/CWIP 294.34 113.08
32. Operating Leases
i. The Company has entered in to a non-cancellable operating lease agreement with Shri Dhanalakshmi Sahakari
Sakkare Karkhane Niyamit, Ramdurg for the lease of sugar factory together with the specifed assets on Built,
Own, Operate and Transfer basis (BOOT) for a period of 25 years. Lease rentals of `560.57 Lakhs (2011: ` 912.51
Lakhs) in respect of the obligation under such lease agreement have been recognized in the Proft and Loss
Account.
Future obligations of lease rentals applicable to the above lease agreement aggregate to `14238.40 Lakhs
(2011: ` 14,798.97 Lakhs) are due:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 769.85 753.04
Later than one year and not later than fve years 3,317.37 3,244.91
Later than fve years 10,151.18 10,801.02
Total 14,238.40 14,798.97
ii. The Company has certain operating leases for ofce facilities and residential premises under a cancellable
operating lease agreement. Such agreements are generally with the option of renewal against increased rent
and premature termination of agreement. The charge on account of lease rentals under such agreements to the
Proft and Loss Account for the year is `22.58 Lakhs (2011: ` 57.41 Lakhs). The future obligations of lease rentals
applicable are as under:
(` in Lakhs)
Particulars 2012 2011
Not later than one year 25.14 24.37
Parrys Sugar Industries Limited
82
33. Deferred Tax
The major components of the deferred tax assets and liabilities on account of timing diferences are as follows:
Deferred Tax Liability/
(Asset)
2011-12 2010-11
` in Lakhs ` in Lakhs
Deferred Tax Liability
Diference between the written down value of assets as per books of account
and Income Tax Act.
1,375.60 4,475.92
Deferred Tax Asset
Unabsorbed Depreciation (398.50) (3,070.46)
Business Loss (977.10) -
Others - (29.86)
Net Deferred Tax liability - 1,375.60
34. There are no suppliers falling under the Micro, Small and Medium Enterprise registered with the company.
35. With respect to receivables from Transmission Corporation of Andhra Pradesh Limited (APTRANSCO) included under
Sundry Debtors:
a) Amounts aggregating to `777.78 Lakhs [2011:` 715.87 Lakhs] relate to price diference matter in dispute
where the Company has appealed before the Apellate Tribunal for Electricity (ATE) against an order of the State
Commission. As the matters are pending before the ATE, the Company, as a matter of prudence, has postponed
the recognition of such amounts as income and a corresponding credit is retained as liability in the books of
account and adjusted against Sundry Debtors as at March 31, 2012.
b) Amounts aggregating to `526.06 Lakhs [2011: ` 582.64 Lakhs] relate to other matters in dispute where the
Company has appealed before the ATE against the orders of State Commission. As the matters are pending
before the ATE, no adjustment has been made in respect of such dues recognised as receivable as at March 31,
2012.
36. (a) The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the
Balance Sheet and Proft and Loss Account.
Particulars Gratuity (Funded)
2011-12 2010-11 2009-10 2008-09
` Lakhs ` Lakhs ` Lakhs ` Lakhs
Present Value of obligations at the beginning
of the year
94.54 104.65 84.09 62.03
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Benefts Settled (20.61) (21.60) (16.11) (2.59)
Actuarial loss/(gain) (0.35) (14.24) (0.03) (14.22)
Present Value of obligations at the end of the
period
97.67 94.54 104.65 84.09
Annual Report 2011-12
83
Particulars Gratuity (Funded)
2011-12 2010-11 2009-10 2008-09
` Lakhs ` Lakhs ` Lakhs ` Lakhs
Changes in the fair value of planned assets
Fair value of plan assets at beginning of year 136.55 67.38 76.97 41.44
Expected return on plan assets 8.05 8.76 5.51 4.42
Contributions - 79.75 - 30.12
Benefts Paid (20.61) (21.60) (16.11) (2.59)
Actuarial gain/(Loss) on plan assets (0.79) 2.26 1.01 3.58
Fair Value of plan assets at the end of the year 123.20 136.55 67.38 76.97
Amounts recognized in the Balance Sheet
Projected beneft obligation at the end of the period 97.67 94.54 104.65 84.09
Fair value of plan assets at end of the period 123.20 136.55 67.38 76.97
Funded status of the plans – asset/(Liability)
recognised in the balance sheet
25.53 42.01 (37.27) (7.12)
Cost for the period
Current service cost 4.51 16.11 30.62 34.62
Interest Cost 19.58 9.62 6.08 4.25
Expected return on plan assets (8.05) (8.76) (5.51) (4.42)
Net actuarial (gain)/loss recognised in the period (20.61) (11.98) (1.32) (17.81)
Net Cost (4.57) 4.99 29.87 16.64
Assumptions
Discount rate 8.50% 8% 8% 7%
Expected return on assets 8.50% 8% 8% 8%
Rate of Compensation increase 6.00% 6% 6% 6%
Attrition rate 5.00% 5% 5% 5%
Retirement expectancy (in years) 60 60 60 58
Expected average remaining service (in Years) 23.20 23.27 23.36 22.12
Mortality rates LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
LIC 1994-96
ultimate
table
Actual return on plan assets (` In Lakhs) 7.26 9.71 6.52 8.00
Based on the above allocation and the prevailing yields on these assets, the long term estimate of the expected
rate of return on fund assets has been arrived at. Assumed rate of return on assets is expected to vary from year
to year refecting the returns on matching government bonds.
The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken
on account of infation, seniority, promotion and other relevant factors such as supply and demand in the
employment market.
Parrys Sugar Industries Limited
84
As per the best estimate of the management, contribution of `5.00 lakhs is expected to be paid to the plan
during the year ending March 31, 2013.
(b) Provision made during the year for other long term employee benefts based on the actuarial valuation report
amounted to `NIL (2011: ` 41.54 Lakhs).
(c) During the period, the Company has recognised the following amounts in the Proft and Loss Account, which
are included in ‘Contribution to Provident and Other Funds’.
` in Lakhs
Particulars 2012 2011
Provident Fund and Employees’ Pension Scheme 98.84 96.40
37. Auditors’ Remuneration and Expenses:
` in Lakhs
2011-12 2010-11
(i) Audit Fees 13.83 14.00
(ii) Tax Audit - -
(iii) Company Law matters - -
(iv) Management Services - -
(v) Fees for other services - 6.00
(vi) Reimbursement of out of pocket expenses 0.12 -
Total 13.95 20.00
38. Value of Imports on C.I.F Basis
` in Lakhs
2011-12 2010-11
Capital Goods - 12.50
Spares 9.82 -
9.82 12.50
39. Expenditure in Foreign Currency
` in Lakhs
2011-12 2010-11
Travel 0.69 1.25
Professional Fee - 0.68
0.69 1.93
40. Earnings in Foreign Currency
` in Lakhs
2011-12 2010-11
Sale of Carbon Emission Reduction 70.13 -
70.13 -
41. The Closing Stock of Finished goods has been valued net of Excise duty payable amounting to `659.83 Lakhs.
42. Segment Reporting:
The Company has identifed three business segments viz. Sugar, Power and Distillery. Segments have been identifed
and reported taking into account the nature of the products, the difering risks and returns, the organizational
structure and internal business reporting system.
(a) Revenue and expenses have been identifed to a segment on the basis of relationship to operating activities of
the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment
on a reasonable basis have been disclosed as “Un-allocable”.
Annual Report 2011-12
85
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Parrys Sugar Industries Limited
86
(b) Segment Assets and Segment Liabilities represent assets and liabilities of respective segment. Investments, tax
related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have
been disclosed as “Un-allocable”.
(c) The Company generally accounts for inter segment sales/transfer as if the sales/transfers were to external
parties at prevailing average market price on the date of transfer.
43. Earnings per Share
The computation of earnings per share is set out below:
Particulars 2012 2011
Nominal Value of Equity Shares (`) 10 10
Net Proft/(Loss) after Tax (` Lakhs) (639.30) (9,467.41)
Less : Preference Dividend attributable to Preference Shares (including
corporate tax thereon)
660.49 1.64
Net Proft/(Loss) attributable to the Equity Shareholders (1,299.79) (9,469.05)
Shares:
Weighted average number of Equity Shares of ` 10 each outstanding during
the year
19,961,707 19,961,707
Basic and diluted Earnings/(Loss) – ` Per Share (6.51) (47.44)
44. Related Party Disclosures
i. Names of the related parties and description of relationship
Relationship Name of the Parties
Holding Company EID Parry (India) Limited
Subsidiary Company Alagawadi Bireshwar Sugars Private Limited (ABSPL)
Fellow Subsidiaries Coromandel International Ltd.
Parry Chemicals Ltd.
CFL Mauritius Limited
Coromandel Brasil Limitada – Partnership
Sabero Organics Gujarat Limited
Sabero Europe BV
Sabero Australia Pty. Ltd.
Sabero Organics America SA
Sabero Argentina SA
Sadashiva Sugars Ltd.
Parry America Inc.
Annual Report 2011-12
87
Relationship Name of the Parties
Fellow Subsidiaries Parrys Investments Limited
Parrys Sugar Limited
Parry Infrastructure Company Private Limited
Parry Phytoremedies Private Limited
US Nutraceuticals Inc.
Parry Agrochem Exports Limited
Valensa Europe AG
La Belle Botanics LLC
Key Management Personnel Mr. D. Kumaraswamy
ii. Summary of transactions with the above related parties are as follows:
Nature of the Transaction 2012 2011
Purchase of Machinery
i. Holding Company
EID Parry (India) Limited - 965.42
Purchase of Goods/Services
i. Holding Company
EID Parry (India) Limited 456.61 448.61
ii. Fellow Subsidiary
Coromandel International Limited 15.75 15.72
Sadashiva Sugars Limited 117.64 97.16
Interest on Unsecured Loan
i. Holding Company
EID Parry (India) Limited 908.45 1,029.87
ii. Fellow Subsidiary
Coromandel International Limited 16.38 2.17
Sadashiva Sugars Limited 37.17 -
Sale of Goods/service
i. Holding Company
EID Parry (India) Limited 332.89 12.79
ii. Fellow Subsidiary
Sadashiva Sugars Limited 264.02 255.26
Coromandel International Limited 55.75 40.20
Unsecured loans taken
i. Holding Company- EID Parry (India Limited) 3,000.00 23,997.16
Parrys Sugar Industries Limited
88
Nature of the Transaction 2012 2011
ii. Fellow Subsidiary- Coromandel International Limited 2,000.00 900.00
iii. Fellow Subsidiary- Sadashiva Sugars Limited 1,500.00 -
Issue of Preference Shares
i. Holding Company- EID Parry (India Limited) 2,500.00 7,500.00
Remuneration
Key Management Personnel
Mr D. Kumaraswamy 71.30 68.50
Balance Payable /(recoverable) at the end of the year:
i. Holding 15,859.61 15,802.97
ii. Fellow Subsidiaries (65.23) 43.12
iii. Individuals exercising control or signifcant infuence and their relatives - -
iv. Enterprises where Individuals exercising control or signifcant infuence
over the company have signifcant infuence
- -
45. Previous year’s fgures have been regrouped/reclassifed to conform to Current year’s classifcation.
46. Previous fnancial year was for a period of ffteen months, whereas 2011-12 is for a period of nine months and hence
fgures are not comparable.
For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Annual Report 2011-12
89
Consolidated Cash Flow Statement for the nine months period ended March 31, 2012
` In Lakhs
2012 2011
A. Cash Flow from Operating Activities
Net Proft/(Loss) before Taxation (2,014.90) (10,453.62)
Adjustments for:
Depreciation 2,349.96 3,665.80
Bad debts written of - -
Provision for doubtful advances - -
Interest received (5.75) (53.04)
Interest and fnance charges 5,178.17 7,823.24
Provisions no longer required written back (9.27) (24.44)
(Proft) / Loss on sale of fxed assets 2.71 7,515.82 2.25 11,413.81
Operating proft/(loss) before working capital changes 5,500.92 960.19
Adjustments for:
Trade and other receivables (4,142.52) (1,399.30)
Inventories (5,201.78) (3,599.93)
Trade and other payables 12,995.13 3,650.83 (2,539.20) (7,538.43)
Cash generated from/ (used in) operations 9,151.75 (6,578.24)
Interest paid (4,323.32) (6,809.91)
Income taxes paid - 331.42
Net cash from / (used in) operating activities 4,828.43 (13,056.73)
B. Cash from Investing Activities
Purchase of Fixed assets (5,805.49) (2,419.51)
Proceeds from sale of fxed assets 6.96 4.51
Investments in Equity shares of Subsidiaries - -
Proceeds from sale of investments - -
Proceeds from transfer of Aircraft business - -
Interest / dividends received 6.85 40.75
Net cash from / (used in) investing activities (5,791.68) (2,374.25)
C. Cash Flow from Financing Activities
Proceeds from issuance of Share Capital 2,500.00 7,500.00
Proceeds from Short Term loans 16,500.00 28,897.16
Repayments of Short Term loans (22,405.23) (8,400.00)
Proceeds from Long Term loans 5,500.00 59,865.19
Repayment of Long Term loans (671.09) (71,934.84)
Dividend Paid (10.29) (0.06)
Net cash from / (used in) fnancing activities 1,413.39 15,927.45
Net Change In Cash And Cash Equivalents 450.14 496.47
Cash And Cash Equivalents - Opening Balance 979.78 483.31
Cash and Cash Equivalents transferred pursuant to Sale of
Aircraft Division
- -
Cash And Cash Equivalents - Closing balance 1,429.92 979.78
[Refer Note 3 Below ]
Notes:
1. The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at March 31, 2012 and the
related Proft and Loss Account for the nine months period ended on that date.
2. The above Cash fow statement has been prepared under the “Indirect Method” as set out in Accounting Standard - 3 on
Cash fow Statements, as notifed under Section 211 (3C) of the Companies Act, 1956.
3. Cash and Cash Equivalents - closing balance include balances aggregating to `46.57 Lakhs [2011: `56.86 Lakhs] with
Scheduled banks in respect of unclaimed dividend, which are not available for use by the Company.
4. Previous year’s fgures have been regrouped wherever necessary in order to conform to this year’s presentation.
This is the Cash Flow Statement referred to in our report of even date For and on behalf of the Board
For R.G.N Price & Co.
Chartered Accountants S. Sandilya D. Kumaraswamy
FRN : 002785 S Chairman Managing Director
H.S. Venkatesh
Partner
Membership No.: 026666
Chennai G. Jalaja B.M. Rath
April 24, 2012 Chief Financial Ofcer Company Secretary
Parrys Sugar Industries Limited
90
Statement pursuant to general exemption provided under
Section 212 (8) of the Companies Act, 1956 relating to
subsidiary company.
Name of the Subsidiary Company: M/s Alagawadi Bireshwar Sugar Pvt. Ltd.
(` in Lakhs)
Particulars 2011-12 ** 2010-11*
Share capital 102.22 102.22
Reserves & Surplus - -
Total Assets 1,429.93 1,414.88
Total Liabilities 1,429.93 1,414.88
Total Turnover - -
Proft/Loss) Before Tax (1.97) -
Provision for Tax - -
Proft/Loss After Tax (1.97) -
Proposed Dividend - -
Investments - -
* For the 15 months period ended June 30, 2011
** For the 9 months period ended March 31, 2012.
Parrys Sugar Industries Limited
Regd. Ofce: Venus Building, 3rd Floor, 1/2 Kalyanamantapa Road, Jakkasandra,
Koramangala, Bengaluru - 560034
ATTENDANCE SLIP
(Please complete this Attendance Slip and hand
it over at the entrance of the meeting hall)
Name & Address of the Member Registered Folio No. Client ID & DP ID No. No. of shares held
I hereby record my presence at the Annual General Meeting of the Company held on Thursday, the July 26, 2012.
SIGNATURE OF THE MEMBER OR PROXY ATTENDING THE MEETING
If member, please sign here If Proxy, please sign here
Note: Members are requested to bring their copy of the AGM Notice to the Meeting as the same will not be circulated at the Meeting.
Parrys Sugar Industries Limited
Regd. Ofce: Venus Building, 3rd Floor, 1/2 Kalyanamantapa Road, Jakkasandra,
Koramangala, Bengaluru - 560034
PROXY FORM
Folio No. ....................................... Client ID No. & DP ID No. ...................................................
I/We ..................................................................................................................... of ..........................................................................................................................
being a Member/Members of Parrys Sugar Industries Limited, hereby appoint .......................................................................................................... of
.............................................................................................................................. or failing him/her ................................................................................................
of .......................................................................................................................... as my/our Proxy to attend and vote for me/us on my/our behalf at the
Annual General Meeting of the Company to be held on Thursday, the July 26, 2012 at 10.30 A.M. and at any adjournment thereof.
Signed .........................................
Date ..............................................
Note: The Proxy form duly completed must be deposited at the Registered Ofce of the Company not less than 48 hours before the time
of holding the meeting. The Proxy need not be a Member of the Company.
Afx
Revenue
stamp
PARRYS SUGAR INDUSTRIES LTD.
ANNUAL REPORT 2011 - 2012
PARRYS SUGAR INDUSTRIES LTD.
Registered Office : 3
rd
Floor, 1/2 Kalayanamantapa Road,
Jakkasandra, Koramangala, Bengaluru - 560034
Ph : 080 4900 6666 Fax : 080 4900 6600.
doc_998450061.pdf