REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERSYour Directors have pleasure in presenting the 20th Annual Report together with theaudited statement of accounts of the Company for the year ended 31st March, 2010. (Rs. inThousands)
| 1. FINANCIAL RESULTS: | 2009-10 | 2008-09 |
| Net Turnover | 1307421 | 1285162 |
| Profit before interest, depreciation and tax | 141161 | 118427 |
| Less : Financial expenses | 43814 | 31383 |
| Profit before depreciation | 97347 | 87044 |
| Less : Depreciation | 32275 | 24011 |
| Profit before tax | 65072 | 63033 |
| Provision for taxations | 8500 | 6000 |
| Provision for deferred tax | 1201 | 2092 |
| Provision for fringe benefit tax | - | 675 |
| Profit after tax | 55371 | 54266 |
| Provision for taxation of earlier years | (754) | (455) |
| Surplus brought forward from previous year | 161512 | 119028 |
| Amount available for appropriations | 216129 | 172839 |
| Appropriations : | | |
| (a) Proposed dividend | 5018 | 6690 |
| (b) Corporate dividend tax | 833 | 1137 |
| (c) Transferred to general reserve | 3500 | 3500 |
| Surplus carried to Balance Sheet | 206778 | 161512 |
2. DIVIDEND:
The Board of Directors are pleased to recommend the Dividend of Rs. 0.06 per share (6%) for the year 2009-10 on equity share capital, subject to the approval of theshareholders at the Annual General Meeting (previous year 8%) which shall absorb Rs 50.18lacs ( previous year Rs. 66.90 lacs)
3. OPERATING RESULTS AND PROFITS:
Fertiliser Division:
The growth of Fertilisers division was as per the projections of the management of theCompany. But due to delay in the annoucement of the new fertiliser policy there wasuncertainty about the MRP of the SSP fertilisers and as a result the sales for the lastquarter of the year under review was affected. Though the production of the fertiliserswas jumped by 7.81% to 152183 TPA the sales was marginally lower as compared to previousyear. This has resulted in increase in the inventory of the finished goods. The new NBSpolicy announced by the Government will provide much needed stimulus to SSP industry. Dueto additional subsidy on sulphur the total subsidy on SSP fertilisers has been raised fromRs 2000/- PMT to Rs 4400/- and to your company will be benefited under NBS policy. Thesuccessful completion of upgradation and modernisation of the newly acquired SSPfertiliser unit at Neemuch (MP) will contribute considerably to the bottomline of theCompany during the current financial year. The production of NPK fertiliser division wasas per production plans of the Company and had jumped by 46.25% over previous year. TheMET Department has predicted satisfactory monsoon in the current year and it will help theagro based industries to progress.
Seeds Division:
The seeds division has reported excellent performance during the year under review. Thesales of the division has jumped by 105.76% and touched a new high of Rs 4000.06 lacs.Whereas the profit before tax of the seeds division has gone up by 44.80% as compared tothe previous year. Introduction of the new hybrid varieties of the seeds in the marketcoupled with the expanding the area under the contract farming has resulted in suchremarkable performance. The newly developed BT cotton seeds under the collaboration ofMahyco Monsanto Biotech (I) Ltd has been successfully launched in the market.
4. DIRECTORS :
Shri A.N.Bhartia, Director retires by rotation at this Annual General Meeting and hebeing eligible, has offered himself for reappointment.
Dr. B.G.Bathkal, Director retires by rotation at this Annual General Meeting and hebeing eligible, has offered himself for reappointment.
Dr. Ramesh Tainwala, Director retires by rotation at this Annual General Meeting and hebeing eligible, has offered himself for reappointment.
5. ISSUE OF SHARES ON PREFERENTIAL BASIS/ FPO:
In order to finance the proposed growth plans of the Company it was proposed to get theapproval of the shareholders to make the preferential allotment of warrant to be convertedinto equity shares to the promoters . It was also proposed to pass special resolutionunder section 81 (1A) of the Companies Act,1956 to issue securities to persons other thanshareholders by way of QIP Securities.
6. AUDITORS:
M/s. P.C.Baradiya & Co., Chartered Accountants,Mumbai and M/s P.C. Bhandari &Co.,Chartered Accountants Akola, the joint statutory auditors of the company hold officeuntil the conclusion of the ensuing Annual General Meeting and are eligible forreappointment. They have furnished certificate to the effect that their appointment asstatutory auditors if made, would be within prescribed limits under Section 224(1) of theCompanies Act,1956.
7. AUDITORS' REPORT:
The observations of the auditors in their report, read with notes annexed to theaccounts are self explanatory and therefore do not call for any further clarification.
8. PUBLIC DEPOSIT:
As on 31st March,2010 the company has neither accepted nor invited any public fixeddeposits. No amount of principal or Interest was outstanding as on 31st March, 2010.
9. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, withrespect to Directors' Responsibility Statement, it is hereby confirmed :
i. That in the preparation of the accounts for the financial year ended 31st March,2010, the applicable accounting standards have been followed alongwith proper explanationrelating to material departures,
ii. That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were 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 the year under review,
iii. That the directors have taken proper and sufficient care for the maintenance ofadequate 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 andother irregularities,
iv. That the directors have prepared the annual accounts for the financial year ended31st March, 2010 on a going concern basis.
10. CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd aseparate section titled " Report on Corporate Governance" is being published asa part of this Annual Report.
11. INDUSTRIAL RELATIONS:
Relations between the Employees and the Management continued to be cordial.
12. PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT 1956:
There were no employees whose remuneration was in excess of the limits prescribed underSection 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)Rules 1975.
13. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO:
Information pursuant to Section 217 (1) (e) of the Companies Act, 1956 read withCompanies (Disclosure of Particulars in Report of Board of Directors) Rules 1988 are setout in the annexure forming part of this Report.
14. ACKNOWLEDGEMENTS:
Your Directors would like to express their appreciation for the assistance andco-operation received during the year under review from the Shareholders, FinancialInstitutions and Bankers. Your directors wish to place on record their sincere thanks forthe devoted services of the staff and workers of the Company.
| For and on behalf of the Board |
| Place : Mumbai | SHASHIKANT C. BHARTIA |
| Date : 29th July, 2010 | CHAIRMAN & JT.MANAGING DIRECTOR |
ANNEXURE TO THE DIRECTORS' REPORT
Particulars required under Section 217(1)(e) of the Companies Act,1956 read withCompanies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988and forming part of the Directors' Report for the year ended 31st March, 2010.
A. CONSERVATION OF ENERGY
As in the past, the company continues its efforts to improve method of energyconservation and utilisation.
FORM 'A'
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
| 2009-10 | 2008-09 |
| A POWER & FUEL CONSUMPTION | | |
| 1. Electricity | | |
| a) Purchased from Electricity Board (No of Units) | 2833472 | 2728705 |
| Total Amount (Rs.) | 13942990 | 12054890 |
| Rate / Unit (Rs.) | 4.92 | 4.42 |
| b) Own Generation | Nil | Nil |
| 2. Coal ( Kgs) | 974895 | 866823 |
| Total Amount (Rs.) | 4185021 | 3601996 |
| Average Rate per Kg (Rs.) | 4.29 | 4.16 |
| 3. Briquettes ( Kgs) | 1721030 | 1463760 |
| Total Amount (Rs.) | 6324019 | 4427915 |
| Average Rate per Kg (Rs.) | 3.67 | 3.03 |
| B. CONSUMPTION PER UNIT OF PRODUCTION (MT) | | |
| NPK Granulated Mixture Fertilizer | | |
| Electricity (No. of Units) | 8.82 | 8.77 |
| Coal (in Kgs.) | 17.83 | 17.55 |
| Briquettes ( in Kgs) | 23.40 | 23.07 |
| SSP Fertilizer | | |
| Electricity (No. of Units) | 16.99 | 16.84 |
| G.S.S.P. Fertilizer | | |
| Electricity (No. of Units) | 12.92 | 12.83 |
| Coal( in Kgs.) | 19.96 | 19.88 |
| Briquettes (in Kgs) | 23.98 | 23.92 |
FORM 'B'
A. ABSORPTION OF TECHNOLOGY: — Not Applicable —
B. RESEARCH AND DEVELOPMENT (R&D):
i. Specific areas in which R&D carried out by the Company:
The R&D efforts of the Company are directed towards quality improvement andimprovement of in house expertise as well as development of high yielding varieties ofseeds. Use of Bio technology in research on seeds will be the key focus of the division.Continuous improvement in processes technology and operational efficiency to maintain theexcellent quality of fertiliser with cost effectiveness is the prime endeavor of R & DDepartment.
ii. Benefits derived as a result of above R&D:
Development of hybrid seeds considering the scientific- technological advances,suitability for biotic stresses, locational adaptability, soil and climatic conditions aswell as giving high yield per acre. Production of the Best quality fertilisers to enablethe company to have edge over its competitors.
iii. Future plans of action:
The Company plans to continue its efforts on inhouse R & D to improve costefficiency & achieving Competitive edge. The Company will be undertaking the newprojects for development of new types of BT seeds.
iv. Expenditure of R & D : Rs 29.99 lacs ( Previous year Rs 25.15 lacs )
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
| | (Rs. in Thousands) |
| 2009-10 | 2008-09 |
| Total Foreign Exchange used : | | |
| a) CIF value of import of Raw material | 102500 | - |
| b) Dividend | 623 | 472 |
| c) Others | 43 | 61 |
| Total Foreign Exchange Earned : | NIL | NIL |