To the Members,
1. Your Directors place before you the Forty-Fifth Annual Report of the Companytogether with Statement of Accounts for the accounting year ended 31st March, 2013.
2. Change of Name of the Company
During the period under review the name of the Company has been changed from ZuariIndustries Limited to Zuari Global Limited, vide Fresh Certificate of Incorporation datedJune 26, 2012, issued by Registrar of Companies, Goa, Daman & Diu.
3. Financial Results and Appropriation:
|Particulars ||Current Year ||Previous Year |
| ||Rs. In Lacs ||Rs. In Lacs |
|Profit for the year before depreciation and taxation ||3,341.17 ||6,815.87 |
|Less :Depreciation for the year ||11.81 ||610.72 |
|Profit/(loss) before tax ||3,329.36 ||6,205.15 |
|Less : Provision for taxation - Current Tax ||470.19 ||906.35 |
|- Tax adjustment relating to earlier year ||137.16 ||77.73 |
|- Deferred Tax charge ||26.69 ||1,099.16 |
|- MAT Credit Entitlement ||- ||(634.08) |
|Profit / (loss) after tax ||2,695.32 ||4,755.99 |
|Add : Balance of profit brought forward ||52,317.84 ||62,366.97 |
|Less : Transfer to Zuari Agro Chemicals Ltd., as per the Scheme of || || |
|Arrangement and Demerger. ||- ||11,620.79 |
|Less : Transfer to general reserve ||500.00 ||2,500.00 |
|Proposed Dividend : 20% (Previous Year 20%) ||588.81 ||588.81 |
|Tax on dividend (Including Surcharge) ||100.07 ||95.52 |
|Balance of profit carried forward ||53,824.28 ||52,317.84 |
The Directors recommend a dividend of Rs. 2/- per equity share (Rs. 2.00 per equityshare in the previous year).
5. Debt Servicing:
Your Company has met all obligations towards repayment of principal and interest on allloans.
6. Fixed Deposits:
As reported in the year 2008-09, the Fixed Deposit Scheme of the Company wasdiscontinued. Deposits matured and claimed have been repaid. 96 deposits amounting to Rs.16.92 lakhs which had matured have not been claimed. The Company advises the depositors atregular intervals for repayment of the deposits. During the year, the Company hastransferred an amount of Rs. 4.91 lakhs towards unclaimed / unpaid deposits and interestthereon to 'The Investors Education and Protection Fund', pursuant to Section 205 C of theCompanies Act, 1956.
Mr. J. N. Godbole, Mr. D.B. Engineer and Mr. S. K. Poddar retire by rotation at theforthcoming Annual General Meeting and are eligible for re-appointment. The resume anddetails of other directorships and committee memberships of Mr. J. N. Godbole, Mr. D. B.Engineer and Mr. S. K. Poddar, are given in Annexure 'C' to this report.
Mr. S. P. Tyagi, Mr. Arun Duggal and Mr. Shyam Bhartia resigned as Directors of theCompany on 16th February, 2013, 1st March, 2013 and 29th April, 2013, respectively. TheBoard places on record its appreciation and invaluable contribution by Mr. Tyagi, Mr.Duggal and Mr. Bhartia to the Company, during their tenure as Directors.
The Auditors, M/s. S.R. Batliboi & Co. LLP Chartered Accountants, Gurgaon,Statutory Auditors of the Company who retire at the forthcoming Annual General Meeting andare eligible for re-appointment. As informed by the Auditors, the name of the Audit Firmhas been changed to M/s. S.R. Batliboi & Co. LLP w.e.f. 1st April, 2013.
9. Cost Auditors :
The Company re-appointed Mr. Savari Muthu I., Cost Accountant, Membership No. 6716, asthe Cost Auditor for the year 2012-13. The Cost Audit Report for the year ended 31-3-2012was filed by the Company with The Ministry of Corporate Affairs on 23rd January, 2013.
10. Conservation of Energy & Technology Absorption:
The Company is not engaged in manufacturing activities, hence no information ofconservation of Energy is required to be provided. Similarly, no new technology wasabsorbed.
11. Foreign Exchange earnings and outgo:
Foreign exchange earnings and outgo is noted under note to financial statements havingreference Nos. 26, 27 & 28 of the Annual Report and Accounts.
The industrial relations with Company employees continues to be harmonious.
Particulars of employees to be furnished under Section 217(2A) of the Companies Act,1956 and the rules framed thereunder, are annexed to this Report as Annexure 'A'.
13. Subsidiary Companies:
In accordance with Accounting Standard 21, Consolidated Financial Statements presentedby the Company include the financial information of its subsidiaries. Pursuant to GeneralCircular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs,the Board of Directors at its Meeting held on 31st January, 2013 decided not to attach theBalance Sheet i.e. financial information of subsidiaries. Accordingly, the Balance Sheet,Statement of Profit and Loss Account, Report of the Board of Directors and the Auditors ofthe Subsidiary Companies are not attached.
The Company will make available these documents/details upon request to any member ofthe Company interested in receiving this information. The Annual Accounts of theSubsidiary Companies will also be kept for inspection by any investor at the RegisteredOffice of the Company and Subsidiaries.
A brief review of subsidiaries and joint ventures of the Company is given here below:-
a. Globex Ltd. :
Globex, an offshore subsidiary Company was established at Jebel Ali Free Zone on 9thAugust, 2009. Currently, Globex is engaged in General Trading in fertilizers andcommodities.
b. Indian Furniture Products Limited :
Indian Furniture Products Limited (IFPL), a wholly owned subsidiary of your Company, isengaged in manufacturing of Ready-To-Assemble (RTA) furniture of international quality atits state-of-the-art plant at Kakkalur near Chennai. The Plant is highly automated and isCNC (Computer Numeric Control) operated. The factory has a floor area of 225,000 sq.ft.and has capacity to produce 200,000 units of furniture annually. The company has beenawarded with ISO 9001:2000 by TUV Suddeutschland accredited by TUV, Germany.
While consumer sentiments had been at a low ebb throughout the year, IFPL managed tomaintain the sales volumes at Rs. 147 crores against Rs. 152 crores of previous year.
Style Spa channel registered sluggish sales growth and Zuari channel remained stagnant.
Increased production capacities created in the previous year remained underutilizedthroughout the year.
Raw material prices which had shot up in the beginning of the year owing to Rupeedepreciation continued at the same level throughout the year.
Company has been working on many cost reduction initiatives to mitigate the impact oflower sales.
Company hopes to secure better volumes in the coming financial year with a healthiereconomy and its own varied tactics in the market place.
ISO 14001 & OSHAS 18001 CERTIFICATIONS:
IFPL secured ISO 14001 & OSHAS 18001 certification during December'12 by Questcertification accredited by JAS ANZ. which will enable IFPL's entry in Institutionalsegment in a big way.
ISO 14001 is an Environment Management System which specifies the requirements for theformulation & maintenance of an environment. This is expected to bring cost reductionin raw material through recycle programs apart from other benefits.
OHSAS 18001:2007 - Occupational Health and Safety Management System focus on preventionof accidents.
Company is also exploring Solar energy options for meeting part of the factory's powerrequirement in view of 12 hours of power cut in Tamil Nadu.
IFPL has installed a small Bio-gas plant in January'13 to generate renewable energyusing vegetable and food waste.
c. Simon India Limited :
Simon India Limited (SIL), a wholly owned subsidiary of your company, is engaged inEngineering, Procurement & Construction (EPC) activities and has achieved a turnoverof Rs. 105 crores during the period from 1st April, 2012 to 31st March, 2013. SIL iscurrently executing several major projects in India and Overseas.
The project activities of "Ammonia Emission Abatement & New Vent Gas FlareSystem" for the Saudi Basic Industrial Corporation (SABIC) in their four fertilizerplants at Jubail, Saudi Arabia are nearing completion.
The project 600 TPD Granulated SSP Fertilizer Project on EPC basis for ChambalFertilizers and Chemicals at Gadepan has been handed over to the Client.
Following are the orders which are secured and are under execution by SIL during thisyear:
Storage facilities for Sulphuric Acid and Phosphoric Acid Plants for ParadeepPhosphates Limited(PPL)
New Sulphuric Acid Plant of large capacity (2000TPD) with captive power plant(23 MW) and heat recovery system with MECS USA design for existing Sulphuric Acid plantson EPC basis for PPL.
The project of 600 TPD Granulated Single Super Phosphate at Mahad for ZuariFertilizers & Chemicals Ltd. (ZFCL) on EPC basis.
d. Adventz Infraworld India Limited :
Adventz Infraworld India Limited, (AIIL), (formerly known as Zuari Developers Limited),a wholly owned subsidiary of your Company is engaged in the business of real estate. AIILis currently, in the process of development of approx. 73 acres of land at Hulikeri,Srirangapatnam Taluk, Mandya District, Karnataka, for Company's "Zuari GardenCity" Project. AIIL, represents the group's foray into both commercial andresidential properties. The Company aims to create world-class yet affordable home andoffice spaces.
Zuari Garden City, the first-of-its-kind integrated township in Mysore, boasts ofexclusive Villas, 2 Club Houses with 100 key spa resort operated by internationallyreputed Operator, mall, multiplexes, school, sports complex, numerous parks, healthcenter, large office space, convenience center & temple which creates aself-sustaining habitat. The project effortlessly blends the comforts of city living withthe calm of sprawling greenery with spacious, environment friendly, vaastu compliantintegrated residential-cum-commercial complex with modern amenities and facilities.
All required permissions and approvals are obtained and well renowned architects andcontractors are on board having commenced the infrastructure work for the first phase ofthe project and the whole project is expected to be completed in five years. Theconstruction of the first phase of 217 Villas and town houses has been commenced and 85%of this phase has been sold out.
e. Zuari Management Services Limited :
Zuari Management Services Limited, a wholly owned subsidiary of your Company, isengaged in the business of rendering management services. The services to Group Companiesinclude in the areas of Human Resource, Corporate Communication, Internal Audit, etc.
f. Zuari Investments Limited :
Zuari Investments Limited, a subsidiary of your Company, is a member of both TheNational Stock Exchange of India Limited and BSE Limited for Capital as well as Future& Option Segment. It is a depository participant with National Securities DepositoryLimited, Central Depository Services Limited, National Commodity and Derivative ExchangeLimited, Multi Commodity Exchange Limited and National Spot Exchange Limited. Besidesbeing empanelled with Association of Mutual Fund of India for distribution of Mutual Fundproducts, the Company is also a dealer of OTC Exchange of India and a category- IIRegistrar and Share Transfer Agent registered with Securities and Exchange Board of India.
The Company and its subsidiaries are mainly engaged in distribution of financialproducts which has direct correlation with the economy.
Keeping this in view, the Company has restructured its business plan and closed 10branches out of 20 branches in different parts of India.
During the year, new initiatives were taken by the Company to ensure growth in businessand it forayed into new products such as mortgage and real estate distribution. TheCompany is in process of implementing a transactional portal for customers.
An optimum level of team is being built up across the existing locations and theCompany is also working on technological enhancements with respect to an E-Learningplatform for training and development of the existing manpower and further implementingcustomer relationship management software to manage customer and employee productivitythat will create value at large.
g. Style Spa Furniture Limited (SSFL) :
Style Spa Furniture Limited (SSFL) was incorporated on 6th February, 1998 to marketready - to - assemble furniture, predominantly in the bedroom segment.
14. Joint Ventures:
a. Gulbarga Cement Limited :
Gulbarga Cement Limited (GCL) is a joint venture with Zuari Cement Limited, anItalcementi Group Company. Your Company holds 26% stake in the equity capital of GCL. GCLwas established for setting up cement plant of 3.23 million tonnes per annum capacity andcoal based power plant of 50 MW.
The land acquisition is being done through Karnataka Industrial Area Development Boardand the preliminary notification for initial 1952 acres under first phase was completedduring the year and the work for final notification is under progress.
The Company is in the process of securing necessary permits and clearances. PublicHearing in connection with the Environmental Clearance for the relocation of the cementplant was completed during June, 2012 and the same is now pending before Special AppraisalCommittee, Ministry of Environment and Forests. The Company has secured an approval fromGulbarga Electricity Company Limited for 20 MVA electricity connections.
The Company is pursuing with Commerce & Industry and Water Resource Departments forsecuring water allocation from Bhima River in accordance with the State High LevelClearance Committee approval.
The Company had invited bids for EPC Tender for engineering, construction &procurement for the Greenfield Cement Plant for the production capacity 7000 TPD ofClinker & 9000 TPD of cement.
b. MCA Phosphates Pte Limited :
MCA Phosphates Pte Limited, (MCA), a company incorporated in Singapore, is a jointventure between your Company and Mitsubishi Corporation (Mitsubishi), Japan withMitsubishi Corporation holding 70% equity stake in the joint venture and your Companyholding the balance 30%. MCA has been set up as a special purpose vehicle and has acquired30% equity stake in Fosfatos del Pacifico, Peru (FDP) which owns a rock phosphate mininglicense in Peru and is implementing a project for producing beneficiated rock phosphatewith an annual capacity of 2.5 mtpa. The Project has an estimated mineralized material ofapproximately 540 million MT of Phosphate Rock with an average P2O5content of 18.5% before beneficiation. Your Company, through Mitsubishi has agreed topurchase significant quantity of concentrated rock phosphate for a minimum of 20 years.
c. Zuari Indian Oiltanking Limited :
Zuari Indian Oiltanking Limited (ZIOL), has state-of-the art terminalling facility forpetroleum products namely Naphtha, Motor Spirit, High Speed Diesel & SuperiorKerosene.
The Company provides terminalling services to Zuari Agro Chemicals Limited, HindustanPetroleum Corporation Limited, Indian Oil Corporation and Bharat Petroleum CorporationLimited. For the year 2012-13, the Oil Terminal has achieved a throughput of 606414 KL andreceived 249746 KL of Naphtha.
Zuari Agro Chemicals Limited discontinued availing terminalling services of ZIOLfollowing supply of Gas by GAIL, effective 18th February, 2013 at the Zuarinagar Plant,because of which ZACL is not using Naphtha as a feedstock.
15. Associates :
Zuari Agro Chemicals Limited (ZACL) :
Your Company holds 20% and its subsidiary Zuari Management Services Limited holds 10%shares of Zuari Agro Chemicals Limited (ZACL). The fertiliser operations of your Companywere demerged with ZACL, effective 1st July, 2011.
16. Corporate Governance:
The Report on Corporate Governance pursuant to Clause 49 of the Listing Agreement isenclosed as Annexure 'B'. The Auditor's Certificate on Compliance of conditions ofCorporate Governance is enclosed as Annexure 'C', Declaration of Executive ViceChairman as Annexure 'D' and the Management Discussion & Analysis as Annexure'E'.
17. Corporate Social Responsibility:
The Adventz Group, as part of Corporate Social Responsibility and with a view toachieve larger and focused impact on the activities, established "AdventzFoundation", a Society registered under The Societies Registration Act, 1940.
The Foundation undertakes various activities in furtherance to the objectives set outby the Adventz Group, of which, your Company is a part.
Dissemination of Information on CSR :
Company is flashing information on CSR and allied activities on its website(http://adventz.com) regularly.
18. Directors' Responsibility Statement: Your Directors hereby report:
i. that in the preparation of annual accounts, the applicable accounting standards havebeen followed along with proper explanation relative to material departures;
ii. that the Directors have 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 as at 31st March, 2013and of the profit and loss account for the period ended 31st March, 2013;
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 on a going concern basis.
19. Directors Comments on Audit Report :
Your Directors' refer heading Basis for qualified opinion in Auditors Report andprovide comments of Board as below:-
Your company has invested in the Equity Shares of Nagarjuna Fertilisers and ChemicalsLimited (NFCL). After the said investment, NFCL went through a Scheme of Arrangement. TheCompany has received equity shares of Nagarjuna Oil Refinery Limited (NORL) pursuant tothe Scheme of Arrangement and Amalgamation between Ikisan Ltd, Kakinada FertilisersLimited, NFCL and Nagarjuna oil refinery Limited (NORL).
The equity shares of NORL are listed on the stock exchanges and equity shares of NFCLare yet to be listed on Stock Exchanges as the approval from SEBI is pending under Rule 19(2) (b). The investment in the equity shares was strategic in nature.
The explanation given by the Auditor is also self explanatory in nature.
20. Acknowledgements :
Your Directors wish to place on record their appreciation for the dedication,commitment and contribution of all stakeholders and employees of your Company.
| ||For and on behalf of the Board |
|Place : Gurgaon. ||S. K. PODDAR |
|Date : May 9, 2013 ||Chairman |
Annexure 'A' to the Directors' Report
Information Pursuant to Section 217(2A) of the Companies Act,1956 read with theCompanies (Particulars of Employees) Rules, 1975.
A) Employed throughout the year
|Sr. No. ||Name ||Company ||Designation / Nature of duties ||Qualifications ||Age (Years) ||Date of commencement of employment ||Experience (No. of Years) ||Remuneration received ||Name of last employer ||Designation ||Period |
|1 ||H. S. Bawa ||Zuari Global Limited ||Executive Vice Chairman ||M.S.(CHEM ENGG.) (USA) ||82 ||16-04-1979 ||57 ||2,90,17,917 ||Hindustan Petroleum Corp. Ltd. ||General Manager (Ref. Div.) ||3 Years |
|2 ||Jyotsna Poddar ||Zuari Global Limited ||Whole Time Director ||B.A(Hons.), Psychology ||62 ||01-04-2012 ||25 ||60,56,180 ||Govind Sugar Mills Ltd. ||Managing Director ||30 Years |