Your Directors' have pleasure in presenting the Annual Report and the Auditedstatements of Accounts of the Company for the year ended 31st March, 2013.
The turnover for the year under review is Rs.90941 lakhs as compared to Rs.85232 lakhsin the previous year. The increase in turnover is attributed to better performance ofCaustic Soda, Caustic Potash divisions.
Division / Segment Wise Operations :
The Caustic unit has produced 130773 MTs of Caustic Soda as against 123534 M.T for theprevious year. As against net sales of Rs.32849 lacs for previous year, the current yearsales comes to Rs.41465 lacs representing an increase of 26%.
The Potassium plant has produced 8947 MTs of Potassium Hydroxide as against 9537 MTsfor the previous year. As against net sales of Rs.5456 lacs for previous year, the currentsales comes to Rs.6540 lacs representing an increase of 20 % attributed to betterrealisations.
The Castor oil plant yielded 14864 MTs of oil processing as against 14355 MTs for theprevious year. As against net sales of Rs. 16036 lacs for the previous year, the currentyear sales stood at Rs. 13951 lacs representing a decrease of 13%.
The Fatty acid plant has processed 23673 MTs for the current year as against 26059 MTsfor the previous year. The net sales of this division has decreased from Rs.18282 lacs toRs.16559 lacs representing a decrease of 9%.
The Power plant at Bellary has billed 585 lakhs KWH of electricity (including deemedgeneration) to Karnakata Power Transmission Corporation Limited (KPTCL) during the currentyear as against 1578 lacs KWH for the previous year.
As against sales to KPTCL (including deemed generation billing) of Rs.4577 lacs for theprevious year, the current year sales comes to Rs.1646 lacs. The decrease is due to expiryof PPA with KPTCL on 31.08.2012 an hence no generation of power since then in the plant.In view of this previous year figures are not comparable.
Outlook For The Current Year :
Segment-wise discussion is furnished in Management Discussion and Analysis annexed tothis report in "ANNEXURE - E".
| || |
|Particulars ||31.03.2013 ||31.03.2012 |
| ||(Rs. in lakhs) ||(Rs. in Lakhs) |
|Profit before Finance Costs & depreciation ||11909.60 ||9943.71 |
|Less: Finance Cost ||3844.50 ||3517.97 |
|Profit before Depreciation ||8065.10 ||6425.74 |
|Less: Depreciation ||4050.97 ||3662.55 |
|Profit (Loss) before Exceptional items and Tax ||4014.13 ||2763.19 |
|Less: Exceptional items || |
|Profit/Loss Before Tax ||4014.13 ||2763.19 |
|Tax Expense: ||- ||- |
|Less: - Current Tax ||803.00 ||576.81 |
|- Deferred Tax ||(561.65) ||797.92 |
|Profit for the period from continuing operations ||3772.78 ||1388.46 |
|Less : Profit from discounting operations ||- ||- |
|Profit for the period ||3772.78 ||1388.46 |
|Add: Balance Carried from Previous year ||2614.65 ||2726.19 |
|Profit available for Appropriation ||6387.43 ||4114.65 |
|Less: Transfer to General Reserve ||1500.00 ||500.00 |
|Less: Transfer to Debenture Redemption reserve ||- ||500.00 |
|Less: Transfer to Capital Redemption reserve ||1000.00 ||500.00 |
|Surplus carried to Balance Sheet ||3887.43 ||2614.65 |
Profit for the Current year at Rs.3772.78 Lakhs shows an increase of 171% compared toprevious year Profit of Rs. 1388.46 Lakhs. Improved and better performance in Caustic Sodadivision is the main reason for increased performance. The results would have been muchmore impressive but for the decreased performance of other divisions.
In view of the need for strengthening the financial base of the company and thenecessity of funds for the ongoing projects, your Directors have decided not to declareany dividend for the year 2012-13.
Capital Expenditure :
During the year the Company has incurred an amount of Rs.5332 lakhs on CapitalExpenditure which is mainly towards Chloromethanes Project and other normal expenditure.The funds required for the above is met from Promoters contribution/Term loans andinternal accruals.
Preferential allotment of Convertible Share Warrants to Promoters :
Listing of Equity shares issued to Promoters on conversion of First and Second TrancheWarrants.
35,52,278 Equity shares were issued at par on conversion of 35,52,278 warrants(allotted on preferential basis) in the ratio 1:1 to M/s.Sree Rayalaseeme Hi-Strength HypoLimited (one of the promoter). The company has submitted listing application and oncompletion of required formalities, BSE has given trading approval on 18.03.2013 subjectto the condition that these shares are under Lock-in for 3 years from the date ofallotment i.e.. up to 10.12.2015. Further 37,39,240 Equity shares were issued to M/s.SreeRayalaseema Hi-Strength Hypo Limited by the Board Allotment Committee in its meeting heldon 27.04.2013 on conversion of 37,39,240 Second tranche warrants (Allotted on Preferentialbasis) in the ratio 1:1. The company is in the process of obtaining trading approval withrespect to these shares, which will be under Lock-in for 3 years from the date ofallotment.
Bellary Power Plant:
The Power Purchase agreement entered with KPTCL has been expired on 31.08.2012 and thesame was not renewed by KPTCL. The company is exploring other alternatives to make use ofthe Assets of Bellary Power Plant.
Safely and Environment Protection :
Your management is giving utmost importance to safety as well as development of greenenvirons in the vicinity of Factory. All out effort is being made to ensure round theclock safety in all activities of the company by entrusting the safety of company in thehands of two experienced General Managers of proven track record and the steps taken bythe management to develop green environs around the factory has given desired results, Aseparate cell has been entrusted with the responsibility of ensuring safety with a team ofofficials working round the clock with the motto of continuous "SAFETY FOR 3M's i.e.,MEN, MACHINE AND MATERIAL" apart from clean and green programmes undertaken bothinside and outside the Factory. The Company is conducting mock drills and proper trainingto staff at regular intervals in the safety aspects.
The Company has paid Listing Fee for the year 2013-14 to Bombay Stock Exchange vide itsletter dated 26.04.2013.
Assets of the Company are adequately insured.
The Company has not accepted any fixed deposits during the year and there are no fixeddeposits outstanding at as on 31.3.2013.
Sri K. Karunakar Rao and Sri N. Jesvanth Reddy are retiring by rotation at the ensuingAnnual General Meeting and they being eligible for reappointment offers themselves to bereelected as Directors.
Your Company's Industrial Relations continue to be harmonious and cordial.
Particulars of Employees:
The information as required under Sec. 217(2A) of the Companies Act, 1956 and the rulesframed thereunder was not annexed as none of the employees were in receipt of theremuneration above the limits prescribed thereunder.
Energy Conservation Technology Absorption And Foreign Exchange Earnings And Outgo:
Particulars required to be disclosed under Section 217(1)(e) of the Companies Act, 1956read with the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1986 are annexed hereto as Annexure - A to this report.
Directors' Responsibility Statement:
As required by the provisions of Section 217(2AA) of the Companies Act, 1956,Directors' Responsibility Statement is attached as Annexure - B.
Pursuant to clause-49 of the Listing Agreement, the mandatory requirements relating toCorporate Governance were to be complied with by your Company. Accordingly your Companyhas taken adequate steps to ensure that all mandatory provisions of Corporate Governancein terms of Clause-49 of the Listing Agreement with the Stock Exchanges, are compliedwith.
Corporate Governance Clause-49 of Listing Agreement:
A separate report on Corporate Governance (Annexure - C) is being incorporated as apart of the Annual Report along with a certificate from the Auditors of the Company(Annexure - D) regarding compliance of the conditions of Corporate Governance. The"Annexure C and D" are attached to this report.
Management Discussion and Analysis Report : Further to comply with Clause-49 of listingagreement "Management Discussion and Analysis" has been given as "Annexure- E" to the Directors' Report.
M/s. Brahmayya & Co., Chartered Accountants, Adoni, will retire at the conclusionof this Annual General Meeting and are eligible for reappointment. M/s, Brahmayya &Co., are being proposed for reappointment as Auditors to hold office for the current year2013-14.
Products manufactured by the Company are coming under Central Govt, order Letter Ref.Nos. (1) 52/26/ CAB/2010 dt.24/01/2012forCaustic Soda (Chemicals) (2) 52/26/CAB-2010dt.02.05.2011 for Electricity Generation (3) 52/26/CAB-2010 dt.24.01.2012 for otherProducts not covered by the above order. As per this order Compliance Report (Form-A) hasbeen filed in XBRL format with MCA portal vide SRN S20597654 dt.20.03.2013, with respectto the products covered by above two orders reference nos. 1 & 2. Cost Audit Report(Form-I) has been filed in XBRL format vide SRN S21037429 dt.11.05.2013 with MCA portalfor Financial Year 2011-12.
An Audit Committee continues to function to comply with provisions of Sec 292(A) of theCompanies Act, 1956 and also Clause-49 of Listing Agreement. The Audit Committee wasreconstituted on 07.05,2012 with the following members Smt.Venus Bhanot, Sri P.Sitaram,Sri P.N. Vedanarayanan and Sri CD. Reddy as members with Sri M.P. Murti as Chairman of theAudit Committee.
Your Directors wish to express their sincere thanks to Financial Institutions, Bankers,Distributors and Customers for their continued support to the Company. The Directors alsoacknowledge with gratitude the continued help and support received from the variousdepartments of the Government of India and the Government of Andhra Pradesh and Governmentof Karnataka.
The Directors place on record their appreciation of the sincerity, commitment andcontribution made by the Employees at all levels and this was mainly responsible to carryon the business of the Company during the year.
| ||On behalf of the Board of Directors |
| ||Sd/- |
|Place: Kurnool ||K. KARUNAKAR RAO |
|Date : 15th May, 2013 ||Executive Director & CEO |
ANNEXURE A' TO THE DIRECTORS' REPORT
Particulars pursuant to Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988.
A. Conservation of Energy :
1. Works relating to replacement of CTMM meshes for Anodes of DD 350 elements completedto reduce energy consumption.
2. Similarly 69 Nos., having voltage > 3.5 V of BM 2.72 Anodes and Cathodesrefurbished to reduce voltage.
3. Replaced 275 Nos., membranes in DD 350 elements and 95 Nos., membranes in BM 2.72elements to improve the efficiency and to reduce energy consumption.
FORM - A
|Disclosure of Particulars with respect to conservation of energy ||Current Year 31.03.2013 ||Previous Year 31.03.2012 |
|A. Power and Fuel Consumption: || || |
|1. Electricity: || || |
|a) i) Electricity from APCPDCL || || |
|Units (KWH) ||211127714 ||259165160 |
|Total Amount (Rs. In lakhs) ||10953.14 ||9606.84 |
|Rate/Unit (Rs.) ||5.19 ||3.71 |
|ii) Electricity from APGPCL || || |
|Units (KWH) ||16122363 ||19632447 |
|Total Amount (Rs. In lakhs) ||506.64 ||559.78 |
|Rate/Unit (Rs.) ||3.14 ||2.85 |
|b) Own Generation: || || |
|i) Through Wind farm || || |
|Units(KWH) ||2601341 ||2834513 |
|Cost/Unit (Rs.) ||3.57 ||3.50 |
|ii) Through Co-Gen plant || || |
|Units(KWH) ||126927895 ||82167700 |
|Cost/Unit (Rs.) ||5.08 ||5.07 |
|2. Coal: || || |
|Quantity (MT) ||242782 ||196254 |
|Total amount (Rs. In lakhs) ||8264.40 ||6305.26 |
|Average Rate (Rs./MT) ||3404 ||3213 |
|3. Husk: || || |
|Quantity (MT) ||28813 ||30689 |
|Total amount (Rs. In lakhs) ||812.58 ||702.59 |
|Average Rate (Rs./MT) ||2820 ||2289 |
|4. Fuel Oil: || || |
|Qty (KL) (consist of HSD & FO) ||694 ||512 |
|Total Amount (Rs. In lakhs) ||320.72 ||216.60 |
|Average Rate (Rs./MT) ||46223 ||42267 |
|B. Consumption per MT of Caustic Soda Lye Production: || || |
|No. of Units (KWH) (AC Power) ||2443 ||2434 |
B. Technology Absorption:
Efforts made in technology absorption are provided in "Form - B" as follows:
FORM - B
Research and Development (R&D):
1. Specific areas in which R&O carried out by the Company:
- Experiments were conducted in coordination with reputed R.O. membrane manufacturersto develop fouling resistant membranes to take care of highly fouled river water duringsummer. Results are encouraging and membranes will be installed shortly.
- In order to remove traces of oil from O&F div., Conventional Chemical treatmentis modified by installing DAF, and by using special coagulant and flocculant. The newequipment is capable of reducing traces of glycerine from the effluent and reduce BOD loadconsiderably.
2. Benefits derived as a result of R & D :
Due to installation of fouling resistant R.O. membranes, frequent usage of cleaningchemicals is reduced. By installing DAF, usage of conventional chemicals like sulphuricacid/lime will be stopped.
3. Future Plans :
a) Installation of continuous electro deionization in place of D.M. Plant to avoidusage of Hcl and caustic for regeneration of D.M.PIant.
b) Installation of candle filters for brine secondary filtration in place ofconventional pressure leaf filters.
c) Installation of Sulphate removal system in place of precipitation of sulphates byBarium Carbonate.
4. Technology Absorption, Adoption and Innovation :
There is no technology innovation, absorption and adoption during the year.
C. Foreign Exchange Earnings and Outgo :
a) Activities relating to exports; initiatives taken to increase exports, developmentof new export markets for products and services, and export plans:
i) Exported Hydrogenated Castor Oil, 12 Hydroxy Stearic Acid, Caustic Potash andplanning to enlarge exports by increasing export quantity and explore export possibilityfor other products.
b) Total Foreign Exchange used and earned
| ||(Rs. In lakhs) |
|i) Foreign Exchange used ||6297.52 |
|ii) Foreign Exchange earned ||9499.25 |
ANNEXURE B' TO THE DIRECTORS' REPORT
Directors' Responsibility Statement
Yours Directors Further Confirm that:
(i) In the presentation of the Annual Accounts, applicable Accounting Standards havebeen followed.
(ii) The accounting policies are consistently applied and reasonable, prudent judgmentand estimates are made so as to give a true and fair view of the state of affairs of theCompany at the end of the Financial Year and of the profit of the company for that period.
(iii) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) The Directors had prepared the Annual Accounts on a going concern basis.
On behalf of the Board of Directors
K. KARUNAKAR RAO
Executive Director & CEO
Place : Kurnool
Date : 15th May, 2013