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Zuari Global Ltd

BSE: 500780 | NSE: ZUARIGLOB ISIN: INE217A01012
Market Cap: [Rs.Cr.] 237.14 Face Value: [Rs.] 10
Industry: Fertilizers

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Director's Report
DIRECTORS

To the Members,

1. Your Directors place before you the Forty-Sixth Annual Report of the Company together with Statement of Accounts for the accounting year ended 31st March, 2014.

2. Financial Results and Appropriation:

Rs. In Lacs

Particulars Current Year Previous Year
2013-14 2012-13
Profit for the year before depreciation and taxation 5,595.30 3,341.17
Less :Depreciation for the year 11.81 11.81
Profit/(loss) before tax 5,583.49 3,329.36
Less : Provision for taxation - Current Tax 1,159.12 470.19
- Tax adjustment relating to earlier year 2,009.84 137.16
- Deferred Tax charge (27.10) 26.69
- MAT Credit Entitlement (172.31) -
Profit/(loss) after tax 2,613.94 2,695.32
Add : Balance of profit brought forward 53,824.28 52,317.84
Less : Transfer to general reserve 500.00 500.00
Proposed Dividend : 10% (Previous Year 20%) 294.41 588.81
Tax on dividend (Including Surcharge) 50.03 100.07
Balance of profit carried forward 55,593.78 53,824.28

The revenue from operations for the year ended 31st March, 2014 was Rs. 16,982.15 Lacs as compared to Rs. 9,954.05 Lacs for the previous year ending 31st March, 2013. The Profit before tax for the year ended 31st March, 2014 was Rs. 5,583.49 Lacs as compared to Rs. 3,329.36 Lacs for the year ending 31st March, 2013. The Profit after Tax stood at Rs. 2,613.94 Lacs for the year ending 31st March, 2014 as compared to Rs. 2,695.32 Lacs for the previous year ending 31st March, 2013.

3. Dividend:

The Directors recommend a dividend of per equity share (Rs.2/- per equity share in the previous year).

4. Debt Servicing:

Your Company has met all obligations towards repayment of principal and interest on all loans.

5. Fixed Deposits:

As reported in the year 2008-09, the Fixed Deposit Scheme of the Company was discontinued. Deposits matured and claimed have been repaid. 65 deposits amounting to Rs.13.32 Lacs which had matured have not been claimed. The Company advises the depositors at regular intervals for repayment of the deposits. During the year, the Company has transferred an amount of Rs.6.56 Lacs towards unclaimed / unpaid deposits and interest thereon to 'The Investors Education and Protection Fund', pursuant to Section 205 C of the Companies Act, 1956.

6. Directors:

The Companies Act, 2013 contains provisions with regard to appointment of Independent Directors. Section 149 (10) of the Companies Act, 2013 provides that an Independent Director shall hold office for a term of upto five consecutive years on the Board of a Company and shall be eligible for re-appointment on passing of a special resolution by the shareholders of the Company. Section 149 (11) provides, no Independent Director shall hold office for more than two consecutive terms.

Mr. D.B. Engineer, Mr. Marco Wadia and Mr. J.N. Godbole, all being non-executive and independent directors were appointed as Directors liable to retire by rotation under the provisions of the Companies Act, 1956. It is proposed to appoint them for a term of 5 years in accordance with the provisions of the Companies Act, 2013.

Mr. N. Suresh Krishnan retires by rotation at the forthcoming Annual General Meeting and is eligible for re-appointment.

The brief profile of other directorship and committee membership of all the above Directors are given in the Report on Corporate Governance attached as Annexure 'A' to this report.

Mr. H.S. Bawa resigned as Director of the Company on 1st September, 2013. The Board places on record its appreciation for invaluable contribution by Mr. H.S. Bawa to the Company, during his tenure as Director.

7. Auditors:

The Auditors, M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, Gurgaon, Statutory Auditors of the Company who retire in the forthcoming Annual General Meeting and are eligible for re-appointment. As per section 139 of the Companies Act, 2013 and Rules made thereunder M/s. S.R. Batliboi & Co., LLP are being appointed as Auditors from the conclusion of the Forty-Sixth Annual General Meeting till the conclusion of the Forty-Ninth Annual General Meeting subject to ratification by members at every Annual General Meeting.

8. Conservation of Energy & Technology Absorption:

The Company is not engaged in manufacturing activities, hence no information of Conservation of Energy is required to be provided. Similarly, no new technology was absorbed during the year.

9. Foreign Exchange earnings and outgo:

Foreign exchange earnings and outgo is noted under financial statements having reference Nos. 29, 30, 31 and 32 of the Annual Report and Accounts.

10. Personnel:

The industrial relations with the employees continues to be harmonious.

Particulars of employees as required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. However, in pursuance of section 219(1) (b) (iv) of the Companies Act, 1956, this report is being sent to all the members of the Company excluding the aforesaid information and the said particulars are made available at the Registered Office of the Company. The members desirous of obtaining such particulars may write/email to the Company Secretary.

11. Internal Complaints Committee :

As per provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has constituted an Internal Complaints Committee for redressal of complaints against sexual harassment.

12. Subsidiary Companies:

In accordance with Accounting Standard 21, Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries. Pursuant to General Circular dated February 8, 2011 issued by the Ministry of Corporate Affairs, the Board of Directors at its Meeting held on 6th February, 2014, decided not to attach the Balance Sheet i.e. financial information of subsidiaries. Accordingly, the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Auditors of the Subsidiary Companies are not attached.

The Company will make available these documents/details upon request to any member of the Company interested in receiving this information. The Annual Accounts of the Subsidiary Companies will also be kept for inspection by any investor at the Registered Office of the Company and its Subsidiaries.

A brief review of subsidiaries and joint ventures of the Company is given herebelow:-

Subsidiaries :

a. Globex Ltd. :

Globex, an offshore subsidiary Company was established at Jebel Ali Free Zone on 9th August, 2009. Currently, Globex is engaged in General Trading in fertilizers and commodities.

b. Indian Furniture Products Limited :

Indian Furniture Products Limited (IFPL), a wholly owned subsidiary of your Company is engaged in manufacturing of Ready-To-Assemble (RTA) Furniture of international quality at its world class facility at Chennai. Apart from Home Furniture & Institutional Furniture manufacturing, it has added Modular Kitchen & Wardrobes manufacturing line in 2013-14 which is also marketed under brand Style Spa.

General economic slump and workmen strike during 1st quarter combined with major revamping of its business operations restricted annual Sales volumes to Rs.12,300 Lacs as against Rs.14,700 Lacs of previous year.

Dedicated Institutional Business division has been created in IFPL and is now fully operational with market expansion underway. This division will focus on Office Interiors, Education Interiors & Hospitality Interiors business segments.

Having executed the major improvements, the Company will be reinforcing Zuari Brand with aggressive marketing to strengthen and expand Zuari furniture distribution business during 2014-15.

As part of consolidation and optimization strategy, IFPL has amalgamated Style Spa Furniture Ltd which is another subsidiary of your Company with effect from 01-04-2014. Style Spa Furniture Limited, is the largest Furniture retail chain in India with 110 retail stores spread across 67 cities in the country. IFPL will thus emerge as a very strong consolidated & integrated Furniture-Interiors Manufacturer with Pan India Retail & Distribution operations base conducting business with Zuari Furniture & Style Spa Furniture brands.

c. Simon India Limited :

Simon India Limited (SIL) has achieved a turnover of Rs. 21742.46 Lacs during the period from 1st April, 2013 to 31st March, 2014, and is currently executing several major projects in India and overseas.

The project activities of "Ammonia Emission Abatement & New Vent Gas Flare System" for Saudi Basic Industrial Corporation (SABIC) in their four fertilizer plants at Jubail, Saudi Arabia are completed after the performance guarantee test of last Ammonia Scrubber was also completed successfully.

Following major projects were completed and closed in 2013-14 :

1. 600 TPD Granulated SSP Fertilizer Project on EPC basis for Chambal Fertilisers and Chemicals Limited at Gadepan

2. New retrofit HRS Tower for IFFCO, Paradeep on EPC basis.

3. New Sulphuric Acid storage tank for Paradeep Phosphates Limited, (PPL), Paradeep on EPC basis.

Following are the orders which are secured and are under execution by SIL during the year:

• Modification in storage facilities for Phosphoric Acid for Paradeep Phosphates Limited (PPL) on EPC basis.

• New Sulphuric Acid Plant of capacity 2000TPD with captive power plant (23 MW) and heat recovery system with MECS USA design for the existing Sulphuric Acid plants on EPC basis for PPL.

• 600 TPD Granulated Single Super Phosphate Project at Mahad for Zuari Fertilisers & Chemicals Limited. (ZFCL) on EPC basis.

• New Chlor-Alkali Plant for KLJ-Qatar in Qatar on EPCM basis.

• New Urea Scrubber plant for Waterleau for their end-client in Iran on EPCM basis.

d. Zuari Infraworld India Limited :

Zuari Infraworld India Limited, (ZIIL), (formerly known as Adventz Infraworld India Limited), a wholly owned subsidiary of your Company represents the group's foray into Real Estate Sector.

Projects under Execution

Zuari Garden City Project, Mysore:-

The Company is in an advanced stage of completing 1st Phase namely Kabini and Kapila consisting of 217 villas. The registration of units in favour of Customers has just started and handing over of the villas is expected to commence in May 2014.

During the financial year, the Company has launched 2nd Phase of Residential Development consisting of "468" Apartments ranging from 2BHK to 4BHK. As of 31st March 2014, the Company has sold "72" units for a value of Rs. 3345 Lacs. All the required permissions and approvals have been received and the construction work has commenced.

Zuari Infraworld India Limited won the "Best Landscaping Award 2013" from CREDAI, Mysore and also won a first Prize for growing and maintaining Bermuda lawn in a park 6 during competition organized by State Horticulture department and district administration on the occasion of Mysore Dasara Festival.

New Projects:-

Mayavan Project, Vrindavan, Mathura:-

During the year, the Company has entered into an Memorandum of Understanding with M/s. Brajbhumi Nirmaan Private Limited to invest 25% Equity for "Mayavan Project" located at Vrindavan, Mathura, spread over 140 Acres. The Company has also received the mandate to act as "Development Manager" for the said project.

The Project will be developed in a phased manner in 6 to 7 years. The 1st Phase in 36 Acres consisting Villas (23 Acres) and Plotting (13 Acres) has been launched. The Sales response is satisfactory and the Land Development works are in progress.

e. Zuari Management Services Limited :

Zuari Management Services Limited, a wholly owned subsidiary of your Company, is engaged in the business of rendering management services. The services to Group Companies include in the areas of Human Resource, Corporate Communication, Internal Audit, etc.

f. Zuari Investments Limited :

Zuari Investments Limited (ZIL), a subsidiary of Zuari Global Limited, is engaged in the distribution of financial products and is focused to be a single window for all leading financial institutions offering all financial products/services under one roof.

The company is a member of both, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), for Cash, Derivative and Currency Segments. It is a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). Besides being empanelled with Association of Mutual Fund of India (AMFI) for distribution of Mutual Fund products, the company is also a Dealer of OTC Exchange of India and a Category- II Registrar and Share Transfer Agent, registered with Securities and Exchange Board of India (SEBI). In addition to the above, the company is also engaged in the distribution of mortgage and real estate products.

Zuari Insurance Brokers Limited:

Zuari Insurance Brokers Limited, a subsidiary of ZIL, is registered with the Insurance Regulatory and Development Authority (IRDA) and provides complete Insurance solutions to Individuals & Corporates as an Insurance broker. The company also caters to the entire in-house Insurance requirements of the Adventz group.

Zuari Commodity Trading Limited :

Zuari Commodity Trading Limited, a subsidiary of ZIL, is a member of National Commodity Derivative Exchange Limited (NCDEX) and Multi Commodity Exchange Limited (MCX), providing commodity trading services to the clients.

g. Style Spa Furniture Limited

Style Spa Furniture Limited has commenced the rejuvenation of its Style Spa brand identity and has launched large format Style Spa Interiors Flagship stores in Mumbai, Bangalore, Delhi-NCR, Cochin & Hyderabad. These new retail formats are built on modernized lifestyle consumer retail experience model and offer larger variants across Home Furniture-Decor, Modular Kitchens & Office-Institutional Interior categories, thereby graduating from the existing small format stores. It is planned to accelerate set up of such Stores in all metros during 2014-15.

Style Spa also ventured into digital space in 2013-14 by launching its online ecommerce platform to complement the existing retail store operations and creating a hybrid business model.

13. Joint Ventures:

a. Gulbarga Cement Limited :

Gulbarga Cement Limited is a joint venture with Zuari Cement Limited, an Italcementi Group Company. Your Company holds 10.09% stake in the equity capital of GCL. GCL was established for setting up of a cement plant of 3.23 million tonnes per annum capacity and coal based power plant of 50 MW.

The land acquisition is being done through Karnataka Industrial Area Development Board and the preliminary notification for the initial 1952 Acres under first phase was completed during the year and the work for final notification is under progress.

The Company is in the process of securing necessary permits and clearances. Public Hearing in connection with the Environmental Clearance for the relocation of the cement plant was completed during June, 2012 and the same is now pending before the Special Appraisal Committee, Ministry of Environment and Forests. The company has secured an approval from Gulbarga Electricity Company Limited for 20 MVA electricity connections.

The Company is pursuing with the Commerce & Industry and Water Resource Departments for securing water allocation from Bhima River in accordance with the State High Level Clearance Committee approval.

The Company had invited bids for EPC Tender for engineering, construction & procurement for the Greenfield Cement Plant for the production capacity of 7000 TPD of Clinker & 9000 TPD of cement.

b. MCA Phosphates Pte Limited :

During the current year, your company transferred its investments in MCA Phosphates Pte Limited, (MCA), a company incorporated in Singapore, to M/s Zuari Agro Chemicals Limited.

c. Zuari Indian Oiltanking Limited :

Zuari Indian Oiltanking Limited (ZIOL), has a state-of-the art terminalling facility for petroleum products namely Naphtha, Motor Spirit, High Speed Diesel & Superior Kerosene.

The Company provides terminalling services to Hindustan Petroleum Corporation Limited, Indian Oil Corporation and Bharat Petroleum Corporation Limited. For the year 2013-14, the Oil Terminal has achieved a throughput of 442075 KL.

14. Associates :

Zuari Agro Chemicals Limited :

Your Company holds 20% shares and the subsidiary Zuari Management Services Limited holds 12.08% shares of Zuari Agro Chemicals Limited (ZACL).

15. Corporate Governance:

The Report on Corporate Governance pursuant to Clause 49 of the Listing Agreement is enclosed as Annexure 'A'. The Auditor's Certificate on Compliance of conditions of Corporate Governance is enclosed as Annexure 'B', Declaration of Whole Time Director is enclosed as Annexure 'C' and the Management Discussion & Analysis is enclosed as Annexure 'D'.

16. Corporate Social Responsibility:

The Adventz Group, as part of Corporate Social Responsibility and with a view to achieve larger and focused impact on the activities, established "Adventz Foundation", a Society registered under The Societies Registration Act, 1940.

The Foundation undertakes various activities in furtherance to the objectives set out by 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 (www.adventz.com) regularly.

17. Directors' Responsibility Statement:

Your Directors hereby report:

i. that in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relative to material departures;

ii. that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2014 and of the profit and loss account for the period ended 31st March, 2014;

iii. that the directors have taken proper and sufficient care for the maintenance of adequate 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 and other irregularities;

iv. that the directors have prepared the annual accounts on a going concern basis.

18. Directors Comments on Audit Report :

Your Director's refer heading 'Basis for qualified opinion' in Auditor's Report and the comments of the Board on the opinion is as below :

Your Company has invested in the Equity Shares of Nagarjuna Fertilisers and Chemicals Limited (NFCL). After the said investment, NFCL went through a Scheme of Arrangement and Amalgamation. The Company has received equity shares of Nagarjuna Oil Refinery Limited (NORL) pursuant to the Scheme of Arrangement and Amalgamation between ikisan Limited, Kakinada Fertiliers Limited, NFCL and NORL.

The equity shares of NORL are listed on the stock exchange and equity shares of NFCL are yet to be listed on the Stock Exchanges as the approval from SEBI is pending under Rule (19)(2)(b) of the Securities Contracts (Regulations) Act, 1956.

The explanation given by the Auditor is also self explanatory in nature.

19. Director's Comments on Corporate Governance Certification:

Your Director's refer to the qualifications in the Auditor's Report on the Certificate on Corporate Governance and comments of the Board on the same is as below :

Your Company is complying with the conditions regarding Composition of the Board of Directors with regard to the number of Independent Directors on the Board w.e.f. 1st September, 2013.

Your Company had designated Mr. H.C. Shah, General Manager- Finance and Accounts to attend to the duties of the Secretary to the Audit Committee due to the resignation of the Company Secretary. The Company has now appointed a Company Secretary who is also a compliance officer.

Your Company is taking steps to appoint an Independent Director on the board of materially unlisted subsidiary company.

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
S. K. Poddar
Chairman
Date : 8th May, 2014
Place : Gurgaon
   
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Key Information

Key Executives:

Saroj Kumar Poddar , Chairman

D B Engineer , Director

Marco Wadia , Director

Jyotsna Poddar , Whole-time Director


Company Head Office / Quarters:

Jai Kisaan Bhawan,
,
Zuarinagar,
Goa-403726
Phone : Goa-91-832-2592431 / Goa-
Fax : Goa-91-832-2555279 / Goa-
E-mail : shares@adventz.com/investor_redressal@zuari.co.in
Web : http://www.adventz.com

Registrars:


 
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