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Southern Fuel Ltd.

BSE: 526767 Sector: Others
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Southern Fuel Ltd
NSE 05:30 | 01 Jan Southern Fuel Ltd

Southern Fuel Ltd. (SOUTHERNFUEL) - Director Report

Company director report

DIRECTORS' REPORT

TO THE SHAREHOLDERS

To

The Members

Your Directors have great pleasure in presenting the Nineteenth Annual Report togetherwith Audited Accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS:

The financial results of the Company for the year under review are furnished below:_

Particulars (Rupees in Lakhs )
31.03.2012 31.03.2011
Operating Profit / (Loss) before interest and depreciation (231.02) 251.64
Add: Interest 153.76 122.30
Gross Profit / (Loss) (384.78) 129.34
Less: Depreciation 30.45 32.16
Less Provision for Taxation (1.87) 14.45
Net Profit / (Loss) for the year (413.36) 82.73
Amount Brought forward from previous year 80.83 (1.90)
Amount carried over to Balance Sheet (332.53) 80.83

DIVIDEND:

The Directors of the Company have not recommended any dividend due to loss.

REVIEW OF OPERATION:

Due to scarcity of raw material Viz. coking coal the price has increased to nearly 24 %over the price prevailed during the previous year. But the selling price of Coke wasalmost static during the year 2011.2012 as the demand for the end product Viz. Lam Cokehas came down during this year due to the crisis in mines in Karnataka and elsewhere haveimpacted the steel and foundry industries which are the major consumer of Coke, Thereforethe scarcity and increase in price of raw material coupled with non-improvement of sellingprice , rendered the production operation uneconomical and hence the production wasstopped from November,2011. However during the year under review, the company registeredan increased turnover of Rs. 36.70 Crores as against Rs. 29.51 Crores in the previousyear, through higher level of trading activity. In view of the reasons stated above thecompany has incurred a huge loss of Rs.413 lakhs.

FUTURE PROSPECTS:

As the crisis in mining seems to be resolved it is expected that there will beimprovement in steel and foundry industry operations which may bring in more demand forCoke. However if the price of raw material and availability improves, .the company wouldresume production in the coming year.

PUBLIC DEPOSITS:

The Company has not accepted any deposits from the public during the year.

DIRECTORS:

In accordance with the provisions of the companies Act, 1956, Sri P.Parthiban and Sri MKaruppasamy, Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible, offers themselves for reappointment. The Directors recommendtheir appointment. The details as required under clause 49 of the listing Agreement isattached.

Sri N Srinivasan resigned from the Board with effect from 01.11.2011 and the Board wishto place on record the valuable services rendered to the Company during the tenure ofoffice.

AUDITORS:

Your Company's Auditors M/s. Rajan Sankar & Co., Chartered Accountants, Coimbatoreretire at the ensuing Annual General Meeting and they are eligible for re-appointment.

COMPANY SECRETARY:

The Company has been making regular and sincere efforts for the appointment of WholeTime qualified Company Secretary. An advertisement was given in leading newspaper, but thesame evoked no response, the Company has also written to the Institute of CompanySecretaries of India in this regard, but no applicants have turned up so far.

COMPLIANCE CERTIFICATE:

The Compliance Certificate obtained from a Practising Company Secretary as requiredunder Section 383A of the Companies Act, 1956 and Cost Accountant are enclosed.

PARTICULARS OF EMPLOYEES:

In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies(Particulars of Employees) Rules 1975, as amended, the names and other particulars of theemployees of the Company who are in receipt of remuneration of not less than Rs.60 Lakhsper annum and Rs.5,00,000/- per month is Nil.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. (A) CONSERVATION OF ENERGY:

Particulars of energy consumption and energy consumption per unit of production arefurnished below:

Power and Fuel Consumption Current Year Previous Year
2011 - 2012 2010 - 2011
1. ELECTRICITY:
(a) Purchased:
Units 1,44,373 units 1,62,404 units
Total Amount (Rs.) Rs.10,09,537.00 Rs.9,97,478
Rate per Unit (Average) Rs.6.99 / unit Rs.6.14 / unit
(b) Own Generation:
Through Diesel Generator
Units (KWH) 5,430 Kw 18,560 Kw
Consumed (Litres) 3,185 lts 8,370 lts
Total amount (Rs.) Rs.1,27,400 Rs.2,92,950
Unit per Litre. of Diesel (KWH) Rs.1.70 / lts Rs.2.22 / lts
Cost per Unit (Rs.) Rs.23.46 / unit Rs.15.78 / unit
2. COAL (specify quantity and where used)
Quantity (Tonnes)
Total Cost -- --
Average Rate
3. FURNACE OIL
Quantity (Litres)
Total Amount (Rs.)
Average Rate (Rs. / Ltr.)
4. OTHERS / INTERNAL GENERATION:
Wind Electricity through own WEG's (Unit) -- --
Total Amount (Rs.)
5. Consumption per unit of Production:
Production in Kgs --
Electricity Units Unit /
Kg of yarn

(B) TECHNOLOGY ABSORPTION:

Due to loss, the Company has not opted for upgradation / switch over to latertechnology.

(C) RESEARCH AND DEVELOPMENTS:

The Company does not have any research and Development Wing.

2. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION:

For consistent production of higher quality of Products besides having state of theMachinery and Equipments, the manufacturing units are equipped with well trained personneland high tech quality control equipments.

3. FOREIGN EXCHANGE EARNINGS AND OUTGO: NIL DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of the provisions of Section 217 (2AA) of the Companies Act, 1956, yourDirectors confirm:

a. that in the preparation of annual accounts, the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. that your Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

c. that your Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in detecting fraud and other irregularities;

d. that your Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance, Management Discussion and Analysis and acertificate from the Auditors of the Company regarding compliance of Corporate Governanceas stipulated Under Clause 49 of the Listing Agreement form part of the Annual Report.

LISTING:

The equity shares of the Company are listed in Bombay Stock Exchange But trading in theshare of this Company was suspended during the period when a rehabilitation process wastaken up by BIFR The listing agreement stipulates that in consideration of listing by theStock Exchange , the company is agreed to comply with all the requirements under theagreement. The listing of securities of the Company would be complete when the securitiesof the Company are allowed to be traded in the Stock Exchange The trading in the share ofthis Company was suspended during the period when a rehabilitation process was taken up byBIFR After the rehabilitation scheme was framed by the BIFR application forrevocation of suspension in trading in shares of Company was duly made in April ,2010 tothe Bpmbay Stock Exchange. The company had also complied with all the requirements of thelisting agreement including the past data and information as directed by the Exchange.However even after a lapse of two years there is no response from the Exchange. Under thiscircumstance it was opinioned that there is no point in complying with the conditions ofthe Listing Agreement when the securities of the Company are not allowed to be traded inthe Exchange and in effect that the listing of our securities has not been complete andthe annual listing fee also was not paid to Bombay Stock Exchange for the financial year2012-13 Therefore it was decided to comply with the conditions of the listing agreement assoon as the suspension on trading in our shares is revoked and accordingly the Exchangewas informed

Members have option to hold their shares in dematerialized form through the NationalSecurities Depositary Limited (NSDL) and Central Depositary Services (India) Limited(CDSL).

The ISIN of the Company is INE261K01019.

ENVIRONMENT AND SAFETY:

The Company has taken various steps to attain high level of safety in its factory andwe are happy to inform that there was no untoward incident during the year underconsideration. Strict measures were taken to keep the environment clean and free fromPollution.

ACKNOWLEDGEMENT:

Your Directors wish to express their sincere thanks for the valuable co-operation andassistance extended by Government Authorities, AXIS Bank Limited, Tamilnadu ElectricityBoard, shareholders, consumers and suppliers. They also wish to place on record theirappreciation for the hard work and dedicated service put in by the employees at alllevels.

For and on behalf of the Board
-sd-
Place: Coimbatore CV Kaleesswaran
Date: 03.09.2012 Chairman cum Managing Director