Zuari Global Ltd

BSE: 500780 | NSE: ZUARIGLOB | ISIN: INE217A01012 
Market Cap: [Rs.Cr.] 264.96 | Face Value: [Rs.] 10
Industry: Fertilizers

Director's Report
DIRECTORS

To the Members,

1. Your Directors place before you the Forty-Sixth Annual Report of the Companytogether 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 Lacsas compared to Rs. 9,954.05 Lacs for the previous year ending 31st March, 2013. The Profitbefore 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 forthe previous year ending 31st March, 2013.

3. Dividend:

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

4. Debt Servicing:

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

5. Fixed Deposits:

As reported in the year 2008-09, the Fixed Deposit Scheme of the Company wasdiscontinued. Deposits matured and claimed have been repaid. 65 deposits amounting toRs.13.32 Lacs which had matured have not been claimed. The Company advises the depositorsat regular intervals for repayment of the deposits. During the year, the Company hastransferred an amount of Rs.6.56 Lacs towards unclaimed / unpaid deposits and interestthereon to 'The Investors Education and Protection Fund', pursuant to Section 205 C of theCompanies Act, 1956.

6. Directors:

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

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

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

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

Mr. H.S. Bawa resigned as Director of the Company on 1st September, 2013. The Boardplaces on record its appreciation for invaluable contribution by Mr. H.S. Bawa to theCompany, 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 andare eligible for re-appointment. As per section 139 of the Companies Act, 2013 and Rulesmade thereunder M/s. S.R. Batliboi & Co., LLP are being appointed as Auditors from theconclusion of the Forty-Sixth Annual General Meeting till the conclusion of theForty-Ninth Annual General Meeting subject to ratification by members at every AnnualGeneral Meeting.

8. 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 during the year.

9. Foreign Exchange earnings and outgo:

Foreign exchange earnings and outgo is noted under financial statements havingreference 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 theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, asamended, forms part of this report. However, in pursuance of section 219(1) (b) (iv) ofthe Companies Act, 1956, this report is being sent to all the members of the Companyexcluding the aforesaid information and the said particulars are made available at theRegistered Office of the Company. The members desirous of obtaining such particulars maywrite/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 anInternal Complaints Committee for redressal of complaints against sexual harassment.

12. Subsidiary Companies:

In accordance with Accounting Standard 21, Consolidated Financial Statements presentedby the Company include the financial information of its subsidiaries. Pursuant to GeneralCircular dated February 8, 2011 issued by the Ministry of Corporate Affairs, the Board ofDirectors at its Meeting held on 6th February, 2014, decided not to attach the BalanceSheet i.e. financial information of subsidiaries. Accordingly, the Balance Sheet, Profitand Loss Account, Report of the Board of Directors and the Auditors of the SubsidiaryCompanies 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 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 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 world class facility at Chennai. Apart from Home Furniture & InstitutionalFurniture manufacturing, it has added Modular Kitchen & Wardrobes manufacturing linein 2013-14 which is also marketed under brand Style Spa.

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

Dedicated Institutional Business division has been created in IFPL and is now fullyoperational 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 Brandwith aggressive marketing to strengthen and expand Zuari furniture distribution businessduring 2014-15.

As part of consolidation and optimization strategy, IFPL has amalgamated Style SpaFurniture 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 110retail stores spread across 67 cities in the country. IFPL will thus emerge as a verystrong consolidated & integrated Furniture-Interiors Manufacturer with Pan IndiaRetail & 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 theperiod from 1st April, 2013 to 31st March, 2014, and is currently executing several majorprojects in India and overseas.

The project activities of "Ammonia Emission Abatement & New Vent Gas FlareSystem" for Saudi Basic Industrial Corporation (SABIC) in their four fertilizerplants at Jubail, Saudi Arabia are completed after the performance guarantee test of lastAmmonia 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 andChemicals 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 onEPC basis.

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

• Modification in storage facilities for Phosphoric Acid for Paradeep PhosphatesLimited (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 onEPC 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 EPCMbasis.

d. Zuari Infraworld India Limited :

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

Projects under Execution

Zuari Garden City Project, Mysore:-

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

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

Zuari Infraworld India Limited won the "Best Landscaping Award 2013" fromCREDAI, Mysore and also won a first Prize for growing and maintaining Bermuda lawn in apark 6 during competition organized by State Horticulture department and districtadministration 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 themandate 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 36Acres consisting Villas (23 Acres) and Plotting (13 Acres) has been launched. The Salesresponse 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, 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 (ZIL), a subsidiary of Zuari Global Limited, is engaged inthe distribution of financial products and is focused to be a single window for allleading financial institutions offering all financial products/services under one roof.

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

Zuari Insurance Brokers Limited:

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

Zuari Commodity Trading Limited :

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

g. Style Spa Furniture Limited

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

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

13. Joint Ventures:

a. Gulbarga Cement Limited :

Gulbarga Cement Limited is a joint venture with Zuari Cement Limited, an ItalcementiGroup Company. Your Company holds 10.09% stake in the equity capital of GCL. GCL wasestablished for setting up of a 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 the initial 1952 Acres under first phase wascompleted during 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 the SpecialAppraisal Committee, Ministry of Environment and Forests. The company has secured anapproval from Gulbarga Electricity Company Limited for 20 MVA electricity connections.

The Company is pursuing with the Commerce & Industry and Water Resource Departmentsfor securing 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 of 7000 TPD ofClinker & 9000 TPD of cement.

b. MCA Phosphates Pte Limited :

During the current year, your company transferred its investments in MCA Phosphates PteLimited, (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 facilityfor petroleum products namely Naphtha, Motor Spirit, High Speed Diesel & SuperiorKerosene.

The Company provides terminalling services to Hindustan Petroleum Corporation Limited,Indian Oil Corporation and Bharat Petroleum Corporation Limited. For the year 2013-14, theOil 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 Limitedholds 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 isenclosed as Annexure 'A'. The Auditor's Certificate on Compliance of conditions ofCorporate Governance is enclosed as Annexure 'B', Declaration of Whole Time Director isenclosed as Annexure 'C' and the Management Discussion & Analysis is enclosed asAnnexure 'D'.

16. 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(www.adventz.com) regularly.

17. 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 on 31st March, 2014and 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 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.

18. Directors Comments on Audit Report :

Your Director's refer heading 'Basis for qualified opinion' in Auditor's Report and thecomments of the Board on the opinion is 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 andAmalgamation. 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 NFCLare yet to be listed on the Stock Exchanges as the approval from SEBI is pending underRule (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 Certificateon 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 ofDirectors with regard to the number of Independent Directors on the Board w.e.f. 1stSeptember, 2013.

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

Your Company is taking steps to appoint an Independent Director on the board ofmaterially 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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