krishna industrial corporation ltd Management discussions

KRISHNA INDUSTRIAL CORPORATION LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS WORKING RESULTS: a) FERTILISER DIVISION: During the year, the production of Super phosphate and Sulphuric Acid was 40086 MT and 23050 MT as against 21336 MT and 20013 MT respectively during the previous year and sale of Super Phosphate and Sulphuric Acid was 40219 MT and 7937 MT as against 19077 MT and 12570 MT respectively during the previous year. The working of this unit has been quite satisfactory. In the current financial year the production and sales of superphosphate has been targeted at 50,000 M.T, ensuring good profitability of this unit as compared to previous years. b) Cot Units: i) VUYYURU UNIT The production of Cot Gas at this unit during the year was 1278 MT as against 2834 MT during the previous year and sales were 1283 MT as against 2836 MT during the previous year. ii) JANGAREDDIGUDEM UNIT: The production of Cot Gas at this unit during the year was 1417 MT as against 999 MT during last year and sales were 1415 MT as against 998 MT during the previous year. The working of this unit has been quite satisfactory during the year. iii) CO2 BOTLING UNIT: This unit is new unit of the company. The sales for the next financial year is targeted at about 1800 M.T. which will yield good profitability. c) ACETIC ACID UNIT: The production of Acetic Acid, Diluted Acetic Acid and Ethyl Acetate at this unit during the year was 2132 MT, as against 1973 MT and Nil MT as against Nil MT during last year, and sales were 2105 MT as against 2031 MT and Nil MT as against Nil MT during the previous year. The profitability of this unit has been good in the current financial year. d) KASBAH SYSTEMS SOFTWARE: This unit registered a profit of Rs.18,90,653/- as against a profit of Rs.9,66,103/- during last year. However in the year 2006-2007 this unit is expected to perform better as there are better export orders on hand. e) BIO-FERTILISER UNIT: The production of Bio-Fertiliser at this unit during year was 354 MT as against 426 MT during the previous year and sales were 368 MT as against 446 MT during the previous year. The performance of this unit has been quite satisfactory. The sales of Bio-Fertiliser is expected to increase in the current year, the reasons being as follows: 1. Tobacco farmers are going to use our Bio-Fertiliser this year in West, East Godavari and Guntur Districts. 2. We are planning to sell 50% of more Quantity of Bio-Fertiliser in Karnataka State compared to last year. 3. We plan to enter Maharashtra State this year for our Bio-Fertiliser marketing. 4. We plan to bring out 2 more products, organic manure based of which one would go for fish feed and the other one for general crops. 5. Also the export markets for some of our products are being looked at in the current year. We expect the overall performance of the Bio-Fertiliser unit, in the current year, to be better than last year. e) NPK GRANUALISATION UNIT This unit is in the process of being set up. 6. Safety and pollution Control: a) Nidadavole Units The company has adhered to the pollution limits prescribed by the Andhra Pradesh Pollution Control Board. b) Cot Units: We have already implemented all safety measures as per factory rules in our factories at Vuyyuru and Jangareddigudem. 7. Conservation of Energy: A statement giving details of conservation of energy and technology absorption in accordance with companys (disclosure of particulars in the report of Board of Directors) Rules, 1988 is annexed. The details regarding total energy consumption per unit is given in the FORM A of the Annexure. Research and Development: The company has set up on R & D unit during the current year to develop innovative IT products for global markets and also develop new products and technologies in the Bio-Fertiliser Space.