JVL Agro Industries Ltd


BSE: 519248 | NSE: JVLAGRO | ISIN: INE430G01026 
Market Cap: [Rs.Cr.] 273 | Face Value: [Rs.] 1
Industry: Edible Oil

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Director's Report

Director

Dear Members

Your Directors have pleasure in presenting the 24th Annual Report together with theAudited Statement of Accounts of the Company for the financial year ended on March 31,2013.

(Rs. in Crores)
Financial Performance Year Ended March 31, 2013 Previous Year March 31, 2012
Sales and other Income 3817.34 2967.47
Profit before depreciation 87.43 82.17
Depreciation 10.21 9.64
Profit after depreciation 77.22 72.53
Provision for taxation 10.91 13.56
Add: MAT Credit 0.00 0.27
Profit after tax 66.31 59.24
Less:
Previous year’s Income / Expenses - -
Profit after previous year’s adjustment 66.31 59.24
Add: Credit Balance
Profit brought forward from previous year 171.96 137.38
Add:
Transfer from Investment Allowance Reserve -
238.27 196.62
Provision for Dividend 2.88 2.57
Provision for Dividend Tax 0.47 0.42
Transfer to General Reserve 5.00 5.00
Deferred Tax 5.94 2.35
Income Tax for earlier years 0.00 0.00
Transfer to Capital Reserve 22.57 14.32
Credit Balance carried over to Balance Sheet 201.41 171.96
238.27 196.62

Appropriations Dividend

your Directors are pleased to recommend a dividend of 20 % (previous year dividend20%), subject to the approval of the shareholders at the Annual General Meeting, for fullypaid-up equity shares of Rs.1.00 each, amounting to Rs.2.88 Crore (previous year dividendRs.2.57 Crore). The tax on distributed profits payable on this dividend is Rs.0.47 Crore(previous year Rs.0.42 Crore) making the aggregate distribution to Rs.3.35 Crore (previousyear Rs.2.99 Crore).The proposed dividend will be tax-free in the hands of theshareholders.

Transfer to Reserves

The Board recommended a transfer of Rs.5.00 Crores to the General Reserve (previousyear Rs.5.00 Crore).

Performance in the year 2012-13

In the financial year 2012-13, the Company performed unexpectedly. The Company crossedits top line target of Rs.3500.00 Crore. The total revenue of the financial year 2012-13is Rs.3837.38 Crore which was Rs.2978.82 Crore in the financial year 2011-12. There is agrowth of 28.82%. The revenue of all the four quarters of 2012-13 surpassed thecorresponding period of the last financial year 2011-12. As far as the half-yearly trendis concerned, the turnover of the Company for the first half year period ended as onSeptember 30, 2012 is Rs.2019.33 Crore which was Rs.1301.86 Crore in the same period infinancial year 2011-12. We can clearly see that the Company performed tremendously in thefinancial year 2012-13. Profit after tax has also gone up from Rs.56.89 Crore in 2011-12to Rs.60.37 Crore in the year 2012-13. EBIDTA for the year 2011-12 was Rs.103.80 Crore andincreased to Rs.111.56 Crore in year 2012-13 i.e. by 7.48 %. Further the Cash profit alsoincreased from Rs.66.53 Crore in the year 2011-12 to Rs.70.58 Crore in the year 2012-13.

Current Performance

The Company is moving aggressively on its sales and marketing efforts and reaching outto bigger population in line with its plan to become a pan-India company. It continues tofollow the policy of perpetual technological upgradation. The Company is ISO9001:2008-certified in recognition of the organisation’s quality system.

Annual General Meeting

The Annual General Meeting of the Company will be held on 30th September, 2013 at 3.00P.M. at ‘Hotel Radisson, The Mall, Cantonment, Varanasi (U.P) to transact thebusinesses as specified in the Notice of the meeting.

Expansion Plans

The Company has commissioned its 1,200 MT Haldia unit. This project is contributing andstrengthening the position of the Company in the national edible oil sector and enhancethe presence of the Company in the Northern, Eastern, North eastern and Central regionmarkets of India. This is the biggest and technologically most advanced project of theCompany. The Company already has an existing network of sales and distribution in Easternand North-eastern market and will be able to leverage that in selling the output of theHaldia unit under its brand.

The Company is also adding a capacity of 400 MTPD of soya oil processing at Haldia andthis should complete the product offering of the Company by offering soya, mustard, palmand Vanaspati which are the four most widely consumed oil in India accounting for at least75 % of the Indian edible oil consumption. The capacity of mustard seed crushing increasedfrom 200 MTPD to 400 MTPD. This will also reduce our dependence on others for the feed forsolvent extraction plant. The capacity of our solvent extraction plant increased from 250MTPD to 450 MTPD. The above capacity expansion will reduce cost of production and willhelp the Company in being more competitive. The expanded production will also help theCompany in catering to the large geography. The storage capacity of seed increased by 6400MT by installing new silos. This increase in capacity will reduce the storage / handling /wastage expenditure of the Company, otherwise incurred on storing seed outside the factoryin private warehouse.

The Company has also devised a mechanism to procure the seeds directly from the farmersinstead of the intermediaries to reduce its cost of purchase and to be more secure for theraw material availability as its requirement has doubled. There is huge opportunity in theWestern market of country and for taking the advantage of this opportunity company islooking for land in the Western coast for setting up a refinery. Further, most of theWestern Indian states are near the port, this is an advantage because setting up of anunit at the port will reduce the logistics cost of the Company, and this will make us morecompetitive in the market. Our Haldia unit is a strong example of it.

For better and cheap procurement of raw material the Company is planning to set up asupply chain network in Indonesia and for this purpose a step down subsidiary of theCompany is incorporated in Indonesia. The Company is pleased to announce that itssubsidiary has been able to source 7500 MT of raw material for it at cheaper price andgoing forward this availability should expand. Further the Company has also signed anagreement to acquire 12500 acres land in Ethiopia (with the option to acquire 62,000acres) for the agro-related activities and this will diversify the business. The Companyhas acquired 500 acres of land in Bihar to commission an agro-based complex, as part ofits plan to enter into other commodities in which the Company can leverage its existingsales and distribution network. In line with above the plan, the Company has started workon setting up a 12 MTPH rice mill on this land. Rice as a commodity can be sold throughthe existing sales and distribution network of the Company in Central India.

Hence, the Company will leverage its existing network to market rice. It will be soldunder the brands of the Company. The first face of this project is expected to startbefore the end of this financial year. The Company has also started the cultivation ofhigh quality paddy in this area to come up with the best quality of rice for sale. TheCompany has completed the technological up-gradation of its plant in Uttar Pradesh withthe help of Alfa Laval (India) and this up-gradation should help the Company in costreduction / production increase from this financial year.

The Company has surpassed its target of Rs.3500.00 Crore topline comfortably in thelast financial. In the current year the Company is expected to reach a topline ofRs.4200.00 Crore. The Company is working towards becoming a billion dollar topline companyin the next two year.

Secretarial Audit

As directed by Securities and Exchange Board of India (SEBI) secretarial audit is beingcarried out at the specified periodity by a practicing Company secretary. The findings ofthe secretarial audit were satisfactory.

Human Resources

The Company’s comprehensive HR policy interalia provides manpower training anddevelopment, keeping in mind the growing requirement for custom trained manpower at itsnew initiatives. The Company’s factory at Naupur is used as a training ground fortechnical manpower. The employees are also sent to the Company’s other units fortraining which helps in reducing manpower costs, avoids poaching of the Company’smanpower, and develops a sense of belonging among the Company employees, resulting inemployee satisfaction and a high employee retention rate. The Company’s office isfully computerised. The new recruits are trained with an ERP system when they join,bringing out their true potential. The Company hires engineers, ITIs, MBAs, among others,for internal training and then positions them at the Company’s other locations. Themanagement interacts regularly with staff members to understand their needs and problemsand to create a suitable working environment. The Company promotes employees working inthe lower order on a regular basis, and also transfers them to other branches to enablethem to undertake more challenging roles, resulting in employee growth and development.The Company provides accommodation to employees whom needed and takes appropriate effortsto make them feel at home. The Company conducts various sporting activities and celebratesIndependence day and Republic day. These initiatives help boost employee morale and createa cordial environment. The senior management participates in various training programmesand attends conferences to update their knowledge base, in turn providing better value tothe Company. These proactive measures resulted in an improved performance and a reductionin employee turnover. The Company is planning on developing a recreation centre foremployees and their families in Varanasi, along with a state-of-the-art guest house foremployees travelling to the head office from the various offices/units.

Capital and Borrowings

During the year, there was a change in the equity share capital of the Company due toconversion of 27,50,000 warrants, having face value of Rs.10/- each into 2,75,00,000equity shares of Rs.1/- each. Earlier, the paid up capital of the Company wasRs.14,04,40,000 divided into 14,04,40,000 equity shares of Rs.1 each/-. After theconversion of warrants into equity the paid up share capital of the Company has increasedto Rs.16,79,40,000 divided into 16,79,40,000 equity shares of Rs.1/- each.

During the year 2012-13, the Company availed credit facilities from Bank of Baroda andPunjab National Bank for its Varanasi and Alwar (Rajasthan) unit, under the consortiumarrangement. The Company also availed credit facilities from consortium led by State Bankof India for the units in Bihar. The total outstanding long-term loans frombanks/financial institution/ others as on March 31, 2013 are Rs.127.94 Crore (previousyear Rs.96.05 Crore). The gross fixed assets increased by Rs.91.58 Crore representingcapital expenditure on setting up new projects (Dehri-On-Sone, Bihar and at Haldia, WestBengal), expansion of existing manufacturing facility, research and development facility,other maintenance capital expenditure and for technological upgradation. The Company hadcash and cash equivalents aggregating to Rs.323.73 Crore as on March 31, 2013, as againstRs.334.57 Crore as on March 31, 2012. The Company has sufficient financial flexibility, interms of available cash and cash equivalents and committed facilities from banks/financial institution to finance the future growth plans and capitalise on emergingopportunities.

Cash Flow Statement

In accordance with the requirement of Clause 32 of Listing Agreement of the stockexchange cash flow statement duly verified by the Auditors together with their certificateis annexed hereto.

Statutory Auditors

The Company received the letter from M/s Singh Dikshit & Company, CharteredAccountants, Varanasi, U.P. to the effect that there reappointment as the Company’sStatutory Auditors for the financial year 2013-14, if made, would be within the prescribedlimits of Section 224(1B) of the Companies Act, 1956 and that they are not disqualifiedfor such reappointment within the meaning of Section 226 of the Companies Act, 1956.

Auditors Reports

The notes to the accounts referred to in the Auditors’ Report have been explainedin note schedule of the Audited accounts. your directors however like to briefly clarifythe auditors’ qualification as follows:

A. The Company has a large network of suppliers dealing with raw material, packingmaterials, among others, catering to the Company and buyers of its finished products.Hence it is not possible to get confirmation from each and every party therefore theAuditors has qualified the same.

B. The Company has not made provision for diminution in the value of long-terminvestments and it is of the opinion that the fall in the value of such investments is notof permanent nature.

C. The salary and wages include payment of remuneration of Rs.19.00 lacs to Mr. D.N.Jhunjhunwala, Chairman, Rs.24.00 lacs to Mr. S. N. Jhunjhunwala, Managing Director andRs.18.00 lacs to Mr. Adarsh Jhunjhunwala, Wholetime Director of the Company.

D. Advances given to Mr. D. N. Jhunjhunwala and Mr. S. N. Jhunjhunwala are pertainingto the Company.

E. Other observations made in the Auditors’ Report are self-explanatory thereforedo not call for further comments under Section 217 of the Companies Act, 1956.

F. The contingent liability mentioned in Note No. 19 are payable only on the basis oflegal pronouncement made by the different authorities previously.

G. The Company maintained cost records under Section 209(1) (d) of the Companies Act,1956.

Particulars of the Employees

Company’s (Particulars of Employees) Rules, 1975 as amended read with section217(2A) of the Companies Act, 1956 are not applicable to the Company as there are noemployees drawing the minimum salary envisaged in the rules.

Audit Committee

Pursuant to the requirement under section 292(A) of the Companies Act, 1956, an AuditCommittee was constituted. The Committee comprises Mr. D. N. Jhunjhunwala, Dr. S. K.Dikshit and Mr. Mahesh Kedia, Directors of the Company.

Directors Responsibility Statement

The Board of Directors of the Company confirms:

A. That in preparation of the annual accounts, the applicable accounting standards hasbeen followed and there has been no material departure.

B. That the selected accounting policies were applied consistently and the Directorsmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of the affairs of the Company as on March 31, 2013 and profit of theCompany for the year ended on that date.

C. That the proper and sufficient care has been taken for the maintenance of adequateaccounting records and are in accordance with the provision of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and others.

D. That the assumption of going concern is followed.

Directors’ Re-Appointment

a) Mr. Harsh Agarwal, Director of the Company, retires by rotation and being eligibleoffers himself for reappointment, in view of valuable contribution made by Mr. HarshAgarwal to the Company, the Board of Directors recommend to the shareholders to reappointMr. Harsh Agarwal as a Director of the Company, he is an engineering graduate and deepinsight in the field of Electronics and telecommunication.

b) Mr. Mahesh Kedia, Director of the Company retire by rotation and being eligible tooffers himself for reappointment, in view of valuable contribution made by Mr. MaheshKedia to the Company, the Board of Directors recommend to the shareholders to reappointMr. Mahesh Kedia as a Director of the Company. He is a Chartered Accountant and has anexpertise in commerce and financial accounting.

c) The re-appointment of Mr. S.N. Jhunjhunwala as Managing Director and Mr. AdarshJhunjhunwala as Whole Time Director and Mr. D.N Jhunjhunwala as Executive Chairman isproposed to be made with effect from 1st October, 2013 and necessary resolution in thisregard are contained in the notice of ensuing Annual General meeting.

Listing of Shares

The equity shares of the Company continue to be listed during the year under review atthe National Stock Exchange, Bombay Stock Exchange, Mumbai, Uttar Pradesh Stock ExchangeAssociation Ltd., Kanpur, and Delhi Stock Exchange Limited, New Delhi. The annual listingfees of each of these stock exchanges were paid on due date.

Corporate Governance

As required by Clause 49 of the Listing Agreement, a separate report on CorporateGovernance is included Annexure II to the Director’s Report in the annual report andyour Directors affirm that the Company has, during the year under review, complied withthe conditions of Clause 49 of the Listing Agreement.

Management discussion and analysis

As required by Clause 49 of the Listing Agreement, the detailed analysis of theoperating performance of the Company for the year, the state of affairs and the keychanges in the operating environment has been included in the management discussion andanalysis section which forms a part of the annual report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings

As required U/S 217(1) (e) of the Companies Act, 1956, read with Companies (Disclosureof Particulars in the Report of Board of Directors) Rules, 1988, the information onconservation of energy, technology absorption and foreign exchange earnings and out go aregiven in Annexure I forming part of this report.

Corporate Social Responsibility

Education

Operates two schools for educating the impoverished and social upliftment in and aroundits area of operations – first, Prahlad Rai Jhunjhunwala Saraswati Shishu Mandir with400 students close to the Varanasi unit And the second Hari Vidhya Mandir Higher SecondarySchool with 300 students proximate to the site of the Company’s proposed SEZ (beingdeveloped by one of the Group companies). Both schools are affiliated to the UP Board andfunded by the Company. JVL also provides scholarships to deserving students. The Companybought more buses to pick the children from remote places and bring them to study at thesetwo school, so that it can spread the message of education and help the needy who cannotafford to travel to its school every day.

Health

It plans to adopt a hospital in the village near the plant to cater to the medicalneeds of the residents. This initiative is in the process of getting started and themanagement is currently engaged in formalities to obtain clearance. The Company is tryingto provide medical facilities to the village, which will eliminate the need to travel totowns for medical aid and treatment. The Company also provides drinking water to localsand laborers at the upcoming Haldia refinery.

Sponsors health camps for local communities. This also includes providing financialhelp and free medical facilities to the ill and the challenged (mentally and physically)

Environmental

Initiatives to improve the environment enrich community life and preserve ecologicalbalance through a strong environment conscience.

The Company has undertaken a plantation drive on the occasion of Independence Day andplanted 2000 trees close to all its units in India. The Company is also adopting parks inVaranasi for its maintenance as its contribution to the society for greener tomorrow.

Spiritual and Religious

Makes donations for the construction of temples, mosques and churches, among otherreligious structures; provides drinking water in rural areas; executes various plans forland development, plantation and self-help groups others

The Company is making good policies and implementing them for the interest of itsemployees, stakeholders and everybody having interest in the Company by producing qualityproduct, instant credit mechanism, good working capital cycle, among others.

Appreciation and acknowledgments your Directors are grateful and pleased to place onrecord the appreciation for their support, trust, guidance and cooperation extended andreposed by all its stakeholders, employees, customers, consumers, media, financialinstitutions and banks, all agencies of Government of India and other central and stategovernment bodies, statutory and regulatory bodies and local authorities in the Companyand look forward to their continued patronage. The Board also expresses its appreciationof the understanding and support extended by the shareholders and employees of theCompany.

For and on behalf of the Board
Sd/-
Place: Varanasi D. N. Jhunjhunwala
Dated: 26.08.2013

Chairman

"Annexure 1"

Annexure to Director’s Report

Particulars as required U/S 217 (1) (e) of the Companies Act, 1956 for the year endedMarch 31, 2013

(Rs. in Crores)
Financial Performance Year Ended March 31, 2013 Previous Year March 31, 2012
(A) Power & Fuel Consumption
(1) Electricity
(a) Purchased
Unit (000) 17255 15786
Total Amount (Rs. Crore) 10.41 8.87
Rate/Unit (Rs.) 6.03 5.62
(b) own Generation
(i) Through Diesel Generators
Unit (000) 1960 777
Total Amount (Rs. Crores) 2.55 0.97
Rate/Unit (Rs.) 13.01 12.54
(ii) Through Turbine
Unit (000) 9957 9522
Total Amount (Rs. Crores) 2.08 2.02
Rate/Unit (Rs.) 2.09 2.12
(2) Coal/Husk
Quantity (M.T.) 100943 90512
Total Coal/Husk (Rs. Crores) 34.46 32.89
Average Rate (Rs.) 3413.81 3634.66
(3) Furnace oil - -
(4) other/Internal Generation - -
(B) Consumption per MT of Vanaspati production
Electricity 62.16 75.88
Furnace Oil - -
Coal (Kgs.) /Husk (Kgs.) 215 344.98
(C) Technology Absorption
Adaptation & Innovation - -
(D) Foreign Exchange Earning and outgo Rs. (in Crores) Rs. (in Crores)
Total Foreign Exchange earned 32.35 2.59
Total Foreign Exchange Used - -
   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
GAIL (India) 53,650.36 12.95 1.98 6.52 17.5 20.2 0.31
Adani Ports 53,635.00 28.26 5.75 13.85 25.2 16.9 1.08
Container Corpn. 24,725.12 24.72 3.54 7.57 15.8 20.3 0.00
Bajaj Holdings 14,456.57 18.77 2.61 13.48 13.7 15.1 0.00
Petronet LNG 13,950.00 19.60 2.80 5.89 28.8 25.7 0.79
CRISIL 12,582.99 59.19 20.67 20.62 39.4 52.8 0.00
Just Dial 11,867.24 98.33 22.20 0.00 25.7 37.0 0.00
Info Edg.(India) 7,622.65 64.05 9.81 31.47 18.0 26.5 0.00
Guj Pipavav Port 7,029.22 33.27 5.01 10.89 10.0 10.2 0.24
Guj Gas Company 5,485.25 15.20 4.48 8.24 33.6 36.0 0.00
Indraprastha Gas 5,329.10 14.79 3.02 5.52 26.0 31.4 0.37
Guj.St.Petronet 4,893.02 11.67 1.49 3.97 19.9 22.5 0.56
Kaveri Seed Co. 4,830.31 22.94 9.30 11.18 44.2 43.6 0.04
SPARC 3,978.93 357.66 28.54 79.32 14.5 15.7 0.35
Multi Comm. Exc. 3,970.11 25.99 3.47 8.96 24.4 32.2 0.00

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Key Information

Key Executives:

D N Jhunjhunwala , Chairman  

S N Jhunjhunwala , Managing Director  

S K Dikshit , Director  

Mahesh Kedia , Director  


Company Head Office / Quarters:
Jhunjhunwala Bhavan,
Nati Imli,
Varanasi,
Uttar Pradesh-221001
Phone : 91-542-2595930-31-32
Fax : 91-542-2595941
E-mail : rohitjaiswa@jvlagro.com
Web : http://www.jvlagro.com
Registrars:
MCS Ltd
F-65 1st Floor
Okhla Industrial Are
Phase-I
New Delhi-110020

Fund Holding

 
Scheme Name No. of Shares
No data found

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