Gujarat Organics Ltd Directors Report.

DIRECTORS REPORT

The Directors hereby present their Thirty Fifth Annual Report on the business and operations of the Company and the Financial Accounts for the year ended 31st March 2013.

FINANCIAL RESULTS:

Given below are the financial results for the year ended 31st March, 2013

(Rs. in lacs)
PARTICULARS 2012- 13 2011- 12 Growth %
Revenue from operations 4548.84 4140.50 9.86
Profit before Depreciation, Interest & Tax 1237.12 1104.79 11.98
Less: Depreciation 178.41 155.91 14.43
Finance cost 157.88 143.62 9.93
Deferred Tax Assets (40.63) (5.61) 624.24
Provision for Tax 0.00 0.00
Profit / (Loss) after Taxes 941.46 810.86 16.11
Balance brought forward from previous year 1450.85 638.38 i
Add: Prior Period adjustments (Net) (6.41) 1.61
Less: Short Prov. of Taxes of earlier years 0.09
Less: Transferred to General Reserve -- -
Balance Carried to Balance Sheet 2385.81 1450.85

OPERATIONS:

Net Sales for the year 2012-2013 increased to Rs.4548.84 lacs from Rs.4140.50 lacs in the previous year- a growth of 9.86%.

In the quantitative terms, Sales for the year ending March 2013 was more or less same as in the corresponding period of the previous year due to enforced blanket restriction on expansion.

Profit during the year after interest, depreciation and taxation was Rs.941.46 lacs as against 810.86 lacs for the corresponding previous year

OUTLOOK:

Prices of Raw Materials were on rising trend and fluctuated widely, but we were able to keep under control our average purchase prices for the year.

Cost of utility particularly Gas has substantially gone up during the year. It has gone up from average rate of Rs.21.15 per SCM in 11-12 to Rs.30.59 per SCM in 12-13, increase of 44.54%. Also the power has gone up from average rate of Rs.6.37 per Unit in 11-12 to Rs.7.12 per Unit in 12-13, increase of 11.77%.

Cost of Labour had also gone up due to increase in Minimum wages by 10.11% as compared to last year

Also general inflation was at all time high. This all had impact on our Margins.

FINANCE:

Total fixed deposit repaid during the year 2012-2013 was Rs. 192.07 Lacs. No fixed deposit which was claimed remained unpaid.

EXPORTS:

Exports has increased by 15.07% from Rs. 1924 Lacs to Rs.2214 Lacs.

SUBSIDIARIES:

The Board of Directors vide their meeting held on 10th August, 2012 had approved the sale of investments in shares of its subsidiary company namely Vijal Holding and Trading Company Private Limited. Accordingly, on completion of the aforesaid transaction on 14th August, 2012; Vijal Holding and Trading Company Private Limited ceased to exist as the subsidiary of the Company. In view of the same, henceforth the Company is not required to submit Consolidated Financial statement of accounts, as the Company has no other subsidiary.

VARIATION OF RIGHTS AND REDEMPTION OF PREFERENCE SHARES:

The Board of Directors, after obtaining consent of preference holders on 21st August 2012, varied terms attached to 6% Cumulative Redeemable Non - Convertible Preference Shares (20,00,000 preference shares of Rs. 10 each) of your Company. The Company had revised/ varied the said terms with respect to minimum notice of one week in relation to redemption terms; altering the nature of instrument from Cumulative to Non- Cumulative as well as waiver of dividend entitlement. Thereby, on 6th September 2012, the Company redeemed the said preference shares.

DIRECTORS:

a) Directors retiring by rotation:

In accordance with the requirement of the Companies Act, 1956 and as per the Articles of Association of the Company, Mr. Ashwin S. Dani and Mr. Mahendra Chhotatal Sheth are liable to retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. A brief resume of the aforesaid directors and other relevant information have been covered in the Notice convening the Annual General Meeting.

b) Resignation of Managing Director:

The Board of Directors at their Meeting held on 10th August, 2012 accepted the resignation of Mr. Hasit A. Dani as the Director and Managing Director of the Company. The Board has placed on its record a deep sense of appreciation for the valuable contributions rendered by Mr. Hasit A. Dani.

c) Appointment of Whole time Director:

The Board appointed Mr. Arvind R. Shah as an Additional Director in accordance with Section 260 of the Companies Act, 1956 with effect from 10th August, 2012 and as Whole time Director for a period of five years with effect from 10th August, 2012 to 9th August, 2017.

d) Regularization of Additional Director:

Mr. Hasit A. Dani was appointed as an Additional Director of the company with effect from 27th May, 2013. Mr. Hasit Dani holds office upto the date of the ensuing Annual General Meeting, and is eligible for appointment as the director. Your Directors recommend his appointment as a director of your company.

AUDITORS:

M/s. Deepak Shah ft Co., Chartered Accountants, the present Statutory Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting. It is proposed to re -appoint them as the Statutory Auditors of the Company until the conclusion of next Annual General Meeting. M/s. Deepak Shah & Co., have under Section 224(1) of the Companies Act, 1956, furnished the certificate of their eligibility for re-appointment.

COST AUDITORS:

The Cost Compliance Report of the Company issued by Mr. Suresh D. Shenoy, Cost Accountant, Mumbai pursuant to the Notifications issued by Ministry of Corporate Affairs on Companies (Cost Accounting Records) Rules, 2011 for the FY 2011-12 was duly submitted on 15th December, 2012.

Pursuant to the Cost Audit Branch Order No. 52/26/CAB-2010 dated 06.11.2012, your Board of Directors have re-appointed Mr. D. H. Zaveri, Cost Accountant, Mumbai, as the Cost Auditor of your Company for the financial year 2013-14 to conduct the audit of the cost records of the Company. Further, the Cost Audit report for the FY 2012-13 is due on 27th September, 2013.

PERSONNEL:

None of the Employees employed throughout/part of the financial year ended 31st March, 2013 was in receipt of remuneration exceeding the limits laid down under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

RESEARCH & DEVELOPMENT AND ENERGY CONSERVATION:

Your Company continued according to the priority to safety and environment controls at all the levels of the factory. Your Company complied with the norms and specifications by sending samples of treated effluents regularly to the concerned authorities.

Details of energy conservation and research and development activities undertaken by the Company along with the information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure forming part of this Report.

FOREIGN EXCHANGE EARNING AND OUTGO:

The details of foreign exchange earnings and outgo have been given in the notes on accounts to the Statement of Profit and Loss and the Balance Sheet.

CORPORATE SOCIAL RESPONSIBILITY:

Your Company is a responsible corporate citizen and strives to give back to the community it operates in. The Corporate Social initiatives, which the Company has identified and implemented, during the financial year 2012- 2013 are as under:

(i) During the year, 98 Self Help Groups ("SHG") were organized with 1327 women members that covered 25 villages of Ankleshwar Taluka. Around 172 members of SHG individually started income generation activities at project villages. With the timely help received from SHGs, many members were able to solve their various problems relating to education, marriage, housing & other basic necessities, etc.

(ii) With help of Gujarat Agro industries Corporation, SHG had introduced HDPE bio gas plant for energy self-sufficiency at village level. For the best and efficient utilization of most valuable resource of the village i.e., water, SHG had introduced micro irrigation system for its members who do farming, with the help of M/s. Pragon Micro Irrigation System Ltd.

(iii) Various skills enhancement trainings related to health, laws, agriculture, entrepreneurship development etc. were given during the year. 42 such trainings covering all the SHGs were conducted during the year.

(iv) SHG had co-ordinated with Government, Semi Government and its departments, private institutes for the purpose of various social security measures like providing monthly pension to widow members of SHGs, providing low cost life insurance coverage from LIC, granting low cost health insurance and personal accident insurance from Oriental Insurance Co. Ltd.

(v) To provide strong and continuous support for livelihood enhancement, SHG had built a strong and positive partnership with the following institutions:

(a) District Industrial Centre (DIC) for grants to support income generative activities of SHG members.

(b) ATMA (Agriculture Technology Management Agency) project for agriculture related trainings and inputs.

(c) Gujarat Handloom and Handicrafts Corporation Gandhinagar for skill up-gradation in handicrafts skills.

(d) Yuva Parivartan program for skill up-gradation in garment and other skills.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuance to Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representation received from the management, confirm that:

a) the Company has, in the preparation of the annual accounts, followed the applicable accounting standards along with proper explanation relating to material departures, if any;

b) they 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 at the end of financial year and of the profit of your Company for that year;

c) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

d) they have prepared the annual accounts for the year ended 31st March, 2013 on a going concern basis.

ACKNOWLEDGMENTS:

Your Directors wish to record their appreciation of the continued co-operation and assistance received by the Company from Financial Institutions, Bankers and Staff.

By Order of the Board,
For GUJARAT ORGANICS LIMITED
Registered Office:
Plot 127/1, Industrial Estate,
GIDC, Ankleshwar - 393002
Gujarat
Place: Mumbai Ashwin S. Dani
Date: 27th May, 2013 Chairman

ANNEXURE TO DIRECTORS REPORT

Disclosure of particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo as required under the Companies (Disclosure of Particulars in the Report of Broad of Directors) Rules, 1988 and forming part of the Report of the Board of Directors for the year ended 31st March 2013.

FORM A

A. POWER AND FUEL CONSUMPTION:

2012-13 2011-12
1. Electricity
Purchased Unit (KWH) 4803100 4099268
Total amount (Rs. in Lacs) 341.95 260.960
Rate/Unit (Rs.) 7.12 6.37
2. Diesel
Quantity (K. Litres) - -
Total amount (Rs. In Lacs) - -
Rate /Unit (Rs.) - -
3. Gas
Quantity (SCM) 1467985 1313175
Total amount (Rs. in Lacs) 448.74 277.70
Rate /Unit (Rs.) 30.57 21.15
4. Furnace Oil
Quantity (K.Litres) - -
Total amount (Rs. in Lacs) - -
Rate /Unit (Rs.) - -
5. Captive Power Generation
Through Natural Gas
Quantity 130512 216924
Unit per SM3 2.50 2.50
Rate / Unit [Rs.] 11.90 7.82

B. CONSUMPTION PER UNIT OF PRODUCTION:

Electricity

Diesel

Gas (Natural)

Furnace Oil

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Para/ Ortho Hydroxy Benzoic Acid & Derivatives 14.40 11.10 0.06 - 18.89 11.82 - 0.02

FORM B

Disclosure of Particulars with respect to Technology Absorption: Research and Development (R&D):

1. Specific areas in which the Company carries out R&D.

The R&D activities of the Company pertain to: - Development of new products.

-- Up gradation of existing products & technologies for improvement in Quality and minimizing cost by better yields & reducing cycle time.

-- Improvement in process technology.

-- Reduction in process time.

2. Benefits derived as a result of above R&D

--- Improvement in quality of the products.

- Consistency in quality of the products.

3. Expenditure on R & D during the financial year is as follows:

[Rs. in lacs]
2012-13 2011-12
(a) Capital -- 1.36
(b) Recurring 5.41 4.75
Total R&D Expenditure 5.41 6.11
(As a % to Turnover) 0.10% 0.15%

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

The Company has not incurred any expenditure for import of technology for its products. The thrust is to reduce the cost of production by further improving upon the indigenous technology and reduce process cycle time

FORM C

Disclosure of particulars with respect to foreign exchange earnings and Outgo:

[Rs. in Lacs]
2012-13 2011-12
(a) Earnings in Foreign Exchange 2121.63 1830.41
(b) Expenditure in Foreign Exchange 28.84 30.43

 

By Order of the Board,
For GUJARAT ORGANICS LIMITED
Place: Mumbai Ashwin S. Dani
Date: 27th May, 2013 Chairman

Compliance Certificate

To,

The Members

GUJARAT ORGANICS LIMITED

Plot No. 127/1,

G. I. D. C Industrial Estate,

Ankleshwar - 393002

We have examined the registers, records, books and papers of GUJARAT ORGANICS LIMITED as required to be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2013. In our opinion and to the best of our information and according to the examinations carried out by us and explanations furnished to us by the company, its officers and agents, we certify that in respect of the aforesaid financial year:

1. The Company has kept and maintained the registers as stated in Annexure "A to this certificate, as per the provisions of the Act and the rules made thereunder and entries therein have been made.

2. The company has filed the forms and returns as stated in Annexure B to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed under the Act and the rules made thereunder.

3. The Company being a Public Limited Company, comments that a Private Limited Company has minimum prescribed paid-up capital, maximum number of members, invitation to public to subscribe for shares and acceptance of deposits from persons other than its members, directors or their relatives, are not required.

4. The Board of Directors duly met 5 (Six) times on 28.05.2012, 10.08.2012, 06.09.2012, 03.11.2012 and on 08.02.2013 in respect of which meetings notices were given and the proceedings were recorded and signed including the circular resolutions passed in the Minutes Book maintained for the purpose. (Two Circular resolutions were passed on 27.06.2012 and 26.09.2012.

5. The Company closed its Register of Members from 16.08.2012 to 25.08.2012 and necessary compliance of Section 154 of the Act has been made.

6. The annual general meeting for the financial year ended on 31st March, 2012 was held on 25.09.2012 after giving notice to the members of the company and the resolutions passed thereat were recorded in Minutes Book maintained for the purpose.

7. One extra- ordinary General Meeting was held on 04.09.2012 during the financial year after giving notice to the members of the company and the resolutions passed thereat were recorded in Minutes Book maintained for the purpose.

8. The Company has not advanced any loan to its Directors and/ or persons or firms or companies referred to in the Section 295 of the Act during the financial year.

9. The Company has not entered into any contracts falling within the purview of Section 297 of the Act.

10. The company has made necessary entries in the register maintained under section 301 of the Act.

11. As there were no instances falling within the purview of Section 314 of the Act, the company has not obtained any approvals from the Board of Directors, members or the previous approval of the Central Government.

12. The Company has not issued any duplicate share certificates during the financial year.

13. There was no allotment/transfer/transmission of securities during the financial year.

The Company has not deposited any amount in a separate Bank Account as no dividend was declared during the financial year.

The Company was not required to post warrants to any member of the company as no dividend was declared during the financial year. There were no unpaid dividends in the company.

There are no unpaid dividends, application money due for refund, matured deposits, matured debentures or the interest accrued thereon which have remained unclaimed or unpaid for a period of seven years.

The Company has generally complied with the requirements of section 217 of the Act.

14. The Board of Directors of the Company is duly constituted and the appointment of Director has been duly made.

15. The appointment of the Whole time Director has been made in compliance with the provisions of Section 269 read with Schedule XIII to the Act.

16. The Company has not appointed any sole selling agents during the financial year.

17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar and/or such other authorities prescribed under the various provisions of the Act during the financial year.

18. The directors have disclosed their interest in other firms/ companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder.

19. The Company has not issued any shares, debentures or securities during the financial year.

20. The Company has not bought back any shares during the financial year.

21. The Company has redeemed 20,00,000 6% Non-Cumulative Redeemable Non-Convertible Preference Shares during the financial year.

22. There were no transactions necessitating the company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares.

23. The Company has complied with the provisions of sections 58A and 58AA read with Companies (Acceptance of Deposit) Rules, 1975 in respect of deposits accepted including unsecured loans taken during the year and the Company has filed the copy of statement in lieu of advertisement with the Registrar of Companies, Ahmedabad. The Company has also filed the return of deposit with the Registrar of Companies.

24. The amount borrowed by the Company from directors, members, public, financial institutions, banks and others during the financial year ending 31st March, 2013 is within the borrowing limits of the company.

25. The Company has made loans and investments in compliance with the provisions of the Act.

26. The Company has not altered the provisions of the Memorandum with respect to situation of the Companys registered office from one state to another during the year under scrutiny.

27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the year under scrutiny.

28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the year under scrutiny.

29. The Company has not altered the provisions of the Memorandum with respect to share capital of the Company during the year under scrutiny.

30. The Company has not altered its Articles of Association during the year under scrutiny.

31. We are informed that there were no prosecution initiated against or show cause notices received by the Company and no fines or penalties or any other punishment was imposed on the company during the financial year, for offences under the Act.

32. The Company has not received any money as security from its employees during the financial year.

33. The Company has deposited both employees and employers contribution to Provident Fund with prescribed authorities pursuant to Section 418 of the Act.

For Parikh & Associates
Place: Mumbai Name of Company Secretary:
Date: 27.05.2013 P. N. Parikh
C. P. No.: 1228

Annexure A

Statutory Registers as maintained by the Company

1. Register of Charges u/s 143 of the Act

2. Register of Members u/s 150 of the Act

3. Minutes Book of Board Meetings u/s 193 of the Act. (In loose leaf)

4. Minutes Book of General Meetings u/s 193 of the Act. (In loose leaf)

5. Books of Accounts u/s 209 of the Act are being audited by the Statutory Auditors of the Company.

6. Register of Contracts u/s 301 of the Act.

7. Register of particulars of Directors etc. u/s 303 of the Act.

8. Register of Disclosure of Interest u/s 301 of the Act.

9. Register of Directors Shareholding u/s 307 of the Act.

Other Registers

1, Attendance Register of Board Meetings

2. Attendance Register of General Meetings

For Parikh & Associates
Place: Mumbai Name of Company Secretary:
Date: 27.05.2013 P.N. Parikh
C. P. No.: 1228

Annexure B

Forms and Returns as filed by the Company with the Registrar of Companies during the financial year ended on March 31, 2013:

Sr. No Form No. / Return Filed under section For Date of filing Whether filed within prescribed time Yes/No If delay in filing whether requisite additional fee paid. Yes/No
1. Form 23C 209(1)(d) Appointment of D.H. Zaveri & Co as Cost Auditors for the year 2012-13 19.06.2012 Yes N.A
2. Form 62 Return of Deposits 58A Return of Deposits as on 31.03.2012 28.06.2012 Yes N.A.
3. Form 32 303 Resignation of Mr. Hasit Dani as Managing Director and Appointment of Mr. Arvind Shah as Additional Director of the Company w.e.f 10.08.2012 27.08.2012 Yes N.A.
4. Form 32 303 Change in Designation of Mr. Arvind Shah as Whole time Director of the Company w.e.f 10.08.2012 27.08.2012 Yes N.A.
5. Form 23 192 Appointment of Mr. Arvind Shah as Whole time Director of the Company and payment of remuneration to him. 30.08.2012 Yes N.A.
6. Form 62 58A Statement in list of Advertisement for Acceptance of Deposits 28.09.2012 Yes N.A.
7. Form 32 303 Change in Designation of Mr. Arvind Shah as Whole time Director of the Company w.e.f 25.09.2012 28.09.2012 Yes N.A
8. Form 23 192 Payment of Commission to Non-executive Directors and Appointment of Mr. Arvind Shah as Whole time director w.e.f 25.09.2012 28.09.2012 Yes N.A
9. Form 66 Compliance Certificate for the financial year 2011-12 383A Financial Year 2011-12 28.09.2012 Yes N.A.
10. Form 25C 269 Return of appointment of Mr. Arvind Shah as Whole time Director of the Company w.e.f 10.08.2012 09.10.2012 Yes N.A
11. Form 23 106 Special Resolution for Variation in rights of preference shareholders w.e.f 04.09.2012 18.10.2012 No Yes
12. Form 23 106 Agreement for Variation in rights of preference shareholders w.e.f 04.09.2012 18.10.2012 No Yes
13. Form 5 95 Redemption of 20,00,000 6% Non Cumulative Redeemable Non-convertible Preference Shares on 13.09.2012 18.10.2012 No Yes
14. Form 8 125 Creation of Charge with HDFC Bank w.e.f 01.10.2012 19.10.2012 Yes N.A
15. Form 20B alongwith Annual Return made as on 25.09.2012 159 Annual General Meeting held on 25.09.2012 09.11.2012 Yes N. A.
16. Form 17 138 Satisfaction of Charge with Kotak Mahindra Bank w.e.f 30.11.2012 05.12.2012 Yes N.A
17. Form A-XBRL 209(1)(d) Cost Compliance Report from - Cost Auditor 15.12.2012 N.A N.A
18. Form 23 AC xbrl / ACA xbrl alongwith Annual Report for the year ended 31.03.2012 220 Adopted at the Annual General Meeting held on 25.09.2012 26.12.2012 Yes N.A.
19. Form 8 125 Modification of Charge with HDFC Bank w.e.f 04.03.2013 26.03.2013 Yes N.A.

 

For Parikh & Associates
Place: Mumbai
Date: 27.05.2013 Name of Company Secretary: P. N. Parikh
C. P. No.: 1228