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Sri Skandan Industries Ltd.

BSE: 531604 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: N.A.
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Sri Skandan Industries Ltd. (SRISKANDANINDS) - Director Report

Company director report

SRI SKANDAN INDUSTRIES LIMITED ANNUAL REPORT 2004-2005 DIRECTORS' REPORT To The Shareholders Your Directors have pleasure in presenting the Tenth Annual Report along with the Audited accounts of the Company for the year ended 31st March 2005. FINANCIAL RESULTS: Amount Rs. In lakhs Particulars 31.3.2005 31.3.2004 Net loss from operations 3.92 14.45 Dairy (1.15) (19.60) Horticulture (2.77) 5.15 Misc. Expenses written off 5.03 4.97 Net loss for the year 8.95 19.42 Dividend Nil OPERATIONS: 1. DAIRY DIVISION The company had to struggle to maintain levels of procurement as well as sale of milk during this relevant period. Large players in the Industry have also made significant in roads in our local market and procurement territory which heightened the competition and the company has to maintain its price level as in the earlier year. Your company is taking good efforts to overcome such competition. 2. HORTICULTURE Horticulture division yielded a Net loss of 2.77 lakhs as against a profit of 5.15 lakhs in the previous period. The profitability has been reduced due to failure of the expected crop pattern. 3. SUBSIDIARY COMPANIES Your Company has no subsidiary company. 4. The Board of Directors have sought waiver of portion of loan liabilities due to promoters, in view of the huge losses suffered due to uncollectible debtors balances on account of unresolved disputes between the company and the sales agents. All the promoter groups have agreed to waive a total amount of Rs.75 lakhs of loan liabilities due to them by the company to be set off against loss due to write off bad and unrealizable debtors. Thus Sundry Debtors to the extent of Rs.75 lakhs were written off in the books, which was not charged to the revenue account and liability to the extent of Rs.75 Iakhs were extinguished in the books of the company. The Board of Directors have unanimously repledged their commitment to resurrect the company from the ruinous conditions and bring back the company to the prosperous ways. The Board of Directors also places its deep appreciation and gratitude for the unparalleled spontaneous generous gesture shown by the various promoter's groups, their associates to waive a big chunk of their loans to the company, to save the company from the brink of disaster. 5. Statutory Auditors M/s Prakash & Prasad Chartered Accountants who retire at the conclusion of this AGM and being eligible offers themselves for reappointment. The Board recommends their reappointment. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to section 217 (2AA) of the Companies Act, 1956 the Directors hereby confirm that they have: 1. Followed the applicable accounting standards in the preparation of the annual accounts, except as otherwise specifically stated. 2. Selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for the year under review; 3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the company and detecting fraud and irregularities; 4. Prepared the accounts for the financial year on a 'going concern' basis. DISCLOSURES: 1. Companies (Disclosure of particulars in the Report of the Board of the Directors) Rules 1988. Conversation of Energy : The company is taking all steps to conserve energy. Technology Absorption: Not Applicable Foreign Exchange earnings and outgo: Nil 2. Particulars of Employees : None of the employees of the Company was paid remuneration exceeding the limits requiring disclosure under section 217 (2A) of the Companies Act, 1956. 3. Comments by Auditors There were certain adverse comments by the auditors relating to maintenance of registers and internal audit. The directors are taking effective steps to comply with these requirements during the current financial year. 4. The company had availed a term loan from M/s TIIC Ltd., Tirunelveli against first charge on the Dairy assets of the company amounting to 63.75 lakhs in the year 1996. The amount standing as at 31.3. 2005 is Rs.45.69 lakhs. No interest on the loan was, prevailing overdue and unpaid as at the end of the accounting period. Working capital term loan from M/s CUB Ltd.. Tirunelveli - outstanding liability as on 31.3.2005 is Rs.6.50 lakhs as against the sanctioned limit of Rs.7.5 lakhs. No interest is overdue and remaining unpaid as on 31.3.2005. 5. Listing on Stock Exchanges The shares of the company were listed in Bombay Stock Exchange and Madras Stock Exchange. Trading has been suspended in these exchanges due to non payment of listing fees. The Company could not pay the listing fees this time due to accumulated losses and paucity of funds. The company is taking appropriate steps to restore listing of shares. 6. Corporate Governance The company is taking effective steps to implement and comply with all mandatory provisions of corporate governance as prescribed under the listing agreement of the stock exchanges with which the company is registered. 7. Social responsibility Your company is conscious to the protection of environment and is taking effective care to protect, maintain and improve the environment in the area of its operation. The company's Milk Processing Unit is situated in a remote area far away from the nearest habitat, in the midst of a well grown horticultural garden. The company has implemented a sound waste water treatment plant to re-cycle the waste water from the factory for captive consumption in is horticultural fields. The company has provided employment to a majority extent only to the local people in the area. ACKNOWLEDGEMENTS: The Board of directors wish to express their thanks to M/s TIIC, City Union Bank Ltd. and other banks for their support and assistance. The Directors thank the lendors, suppliers, consumers and shareholders for the confidence reposed in the company. The Directors also wish to thank the employees at all levels for their dedicated performance during the current period. Place : Chennai For and on Behalf of the Board of Directors Date : 5-9-2005 For Sri Skandan Industries Ltd. S. RAMACHANDRAN CHAIRMAN