agrocel industries ltd Management discussions

AGROCEL INDUSTRIES LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS 1. FINANCIAL HIGHLIGHTS: The salient features of the Companys working results are as under: Particulars 2007-2008 2006-2007 Gross Profit for the year was 4,88,51,497 2,58,77,033 Less: Depreciation 1,24,27,083 1,03,28,450 Leaving a Net Profit subject to taxation 3,64,24,414 1,55,48,583 Less : Taxation (Including FBT) 1,35,09,771 59,02,698 2,29,14,643 916,45,885 Add: Excess provision for taxation for earlier year 4,18,008 Nil 2,33,32,651 96,45,885 Add thereto: Balance brought forward from the previous year 74,61,289 1,63,25,254 Amount available for Appropriations: 3,07,93,940 2,59,71,139 Less: Appropriations: (a) Proposed Dividend 30,00,000 30,00,000 (b) Tax on Distributed Profits 5,09,850 5,09,850 (C) Transfer to General Reserve 2,00,00,000 1,50,00,000 2,35,09,850 1,85,119,850 Balance carried to Balance Sheet 72,84,090 14,61,289 2. OPERATIONS: Your Directors report that during the year under review, the Company has achieved an income of Rs. 6720.47 lacs compared to Rs.4603.88 lacs in the preceding year showing substantial growth of 45.97% over previous year. The Company also achieved exports of Rs. 1166.93 lacs compared to Rs. 906.59 lacs during the previous year. Total turnover is increased in the operations of both the divisions. The Company has achieved profit of Rs.376.41 lacs before tax as compared to profit of Rs. 155.48 lacs in the previous year. Service Centre Division of your Company has been rendering excellent extension services to the farmers through existing centres and continues to earn a lot of goodwill in the fair trade business. During the year, the Company has also made substantial business in organic and fair trade cotton in domestic and foreign market and also exported other output products during the year. 3. NEW PROJECTS & ACTIVITIES: The Company continues to develop value-added products based on bromine, bromine compounds and inorganic chemicals with good export potential, which will ensure high capacity utilisation. Obtaining clearances from various Government agencies in respect of new factory near Bhavnagar is delayed and the Company is hopeful to start commercial activities in the next financial year. During the year, the Company has made sizable investment at Dhordo site for capacity enhancement of organic and inorganic products, engineering and process changes etc. Your Company has also made investment in establishing Organic and Fair Trade Park at Soladi near Dhangadhra. It will, boost organic & fair trade farming which leads to timely & quality products to customers at large. The unit also has farmers training school to educate the farmers in better farming. 4. SAFETY & ENVIRONMENTAL PROTECTION: The Company has ensured a safe and healthy work environment by providing suitable equipments, processes and periodic maintenance. 5. INSURANCE: Your Company continues to carry adequate insurance against natural calamities, theft, and other risks of all insurable assets. 6. FINANCE: Your Company has increased the Authorised Share Capital from Rs.3 crores to Rs. 6 crores and has issued 1,50,000 equity shares of Rs. 100 each fully paid up at a premium of Rs.100 during the year under report for new projects & expansion activities. Your Company has availed of working capital credit from Bank of Baroda up to a limit of Rs. 210 lacs to finance the working capital needs of Service Centre Division and from Bank of India upto a limit of Rs. 300 lacs to finance the working capital needs of the Marine Chemicals Division of the Company. The Company has availed term loan of Rs.385.00 lacs from Bank of Baroda for Dhrangadhara Unit of Service Division and Rs. 3.50 Lacs from ICICI Bank Limited for vehicle. The Company has repaid Loan to Mahindra and Mahindra Financial Services Limited, amounting to Rs. 2.31 lacs, to HDFC Bank Ltd. Rs.2.46 lacs, to ICICI Bank 0.08 Lacs and to Bank of India Rs. 28.39 Lacs.