Dear Members
The Directors of your Company have pleasure in presenting Twenty Fifth Annual Report and the Audited Accounts of your Company for the year ended 31.03.2013.
FINANCIAL RESULTS SUMMARY:
(Rs in Lakhs) | ||
Particulars | 2012-13 | 2011-12 |
Turnover including Other Income | 46964.94 | 46849.82 |
Profit before Interest, Depreciation and Tax | 6041.52 | 9218.77 |
Less : Financial Charges | 1081.08 | 888.47 |
Less : Depreciation | 417.42 | 290.19 |
Profit before tax | 4543.02 | 8040.11 |
Deferred tax (liability)/Assets | (424.11) | (270.82) |
913.62 | 2379.60 | |
Provision for current Taxation | ||
Income Tax of Earlier Years | - | (1.69) |
Profit after tax | 3205.29 | 5391.38 |
Add: Profit brought forward from previous year | 10888.23 | 6250.75 |
Amount available for appropriation | 14093.52 | 11642.13 |
Appropriation | ||
Proposed Dividend - Preference shares | 40.00 | 40.00 |
- Equity Shares | 433.15 | 259.89 |
Dividend Distribution Tax | 80.41 | 49.65 |
Transfer to General Reserve | 320.53 | 404.36 |
Surplus Carried Forward | 13219.43 | 10888.23 |
DIVIDEND:
Your Directors are pleased to recommend dividend at the rate of Rs.0.80 per share on 8% Cumulative Redeemable Preference Share of nominal value of Rs. 10/- per share for the year 2012-13 and the Directors further recommend dividend at the rate of Rs.3.00 per share on equity shares of nominal value of Rs. 10/- per share for the year 2012-13. The aforesaid dividend, subject to the approvals of the members at the ensuing Annual General Meeting of the company, shall be payable to the members whose name appear in the Register of members of the Company as on the Book closure date.
OPERATIONS:
For the year under review your Company achieved a turnover of Rs.46964.94 Lakhs as against Rs.46849.82 Lakhs for the preceding year 2011-12; Profit after Tax is of the order of Rs.3205.29 Lakhs whereas Profit after Tax stood at Rs.5391.38 Lakhs for the previous year.
In terms of production as well as Sales volumes, the year under review has been sluggish. With erratic monsoon, and carryover of inventories on the part of dealers, demand for Fertilizers did not pick up, impacting consumption: a difficult market led to pressure on margins, and though the Sales Volumes have been maintained, the input costs have been higher; as a consequence, profit has been of lower order.
The turnover and net profit after tax registered an increase of 0.25% and decrease of 40.55% respectively over the corresponding figures of previous year. During the year, there was a steep decline in demand for P & K fertilizers. Demand contraction was driven by near drought conditions in the addressable market of Maharashtra and steep increase in P & K fertilizer prices due to rupee depreciation. A high price differential between Urea and Phosphatic fertilizers also impacted the demand for phosphatic fertilizers. These factors impacted production and sales volumes of the Company during the year, which in turn adversely impacted profitability of the Company for the year under review.
During the year under review, your company achieved production of 4.45 Lakh MT of Single Super Phosphate and 0.06 Lakh MT comprising of NPK Mixed Fertilizers, Magnesium Sulphate and Zinc Sulphate as against production of 4.72 Lakh MT and 0.11 Lakh MT respectively in the previous year.
The market conditions have been such that all India consumption of SSP fertilizers declined steeply from 48 Lakh MT in 2011-12 to 39.65 Lakh MT in 2012-13 dropping by as much as 17%. As against this, the market share of your Company actually improved from 10.44% in 2011-12 to 11.60% in the year under review.
Considering that 2012-13 has been a difficult year for the Indian Fertilizer Industry in general, and for the SSP segment of fertilizer business, your company has fared comparatively better in its overall performance in the year 2012-13 in terms of containing the impact in adverse market conditions.
The Company has successfully commissioned its new SSP Plant at Raebareli, in the State of Uttar Pradesh in March, 2013. The plant which has a capacity of 132000 MT/annum would augment the production capacity significantly and would enable the company to cater to the needs of the farmers and be in a position to tap the market potential of the region in more effective way.
CHANGE IN MANAGEMENT AND CONTROL:
Under a Share Purchase Agreement entered into on 24th January, 2013, with the existing Promoters of the company, namely, Mr. Raoof Razak Dhanani and his associates, Coromandel International Limited acquired 48.62% of the equity share capital of the Company from the promoters on 7th March 2013. Coromandel also acquired 100% of equity in Liberty Urvarak Limited which holds 5.01% of equity in Liberty Phosphate Limited. Coromandels overall stake-holding in the company is set to go further up pursuant to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations which make it incumbent on Coromandel- as the company acquiring substantial stake from the Promoters/existing Stakeholders to acquire another 26% minimum from the shareholders through an Open Offer, which process is already on. Thus, effective 7th of March, 2013, your company has become a Subsidiary of Coromandel International Ltd.
Your company sees tremendous value accruing from its association with Coromandel, which is a significant player in the Fertilizers and Farm Inputs Business: the Company is thus in a position to leverage on Coromandels marketing network and draw on its expertise and resource base to expand its own business.
As a corollary to the change in management and control, the Board of Directors of the company was re-constituted with effect from 7th of March, 2013, with the appointment of following as the Additional Directors on the Board of your company.
1. Mr. M. K. Tandon
2. Mr. Dipak Ghose
3. Mr. Kapil Mehan
4. Mr. S.Sankarasubramanian
5. Mr. S. Govindarajan
Upon reconstitution of the Board, the following directors resigned from the Board with effect from 7th March, 2013:
Mr. Raoof Razak Dhanani Mr. Shakil Zakaria Memon Mr. Zafar Ullah Khan Mr. Abdul Mabood Shaikh Mr. Ajay Paliwal Mr. Salim Sherani Mr. Firoz Asgar Khambati Mr. Hemant Motilal Shah
The Board wishes to place on record their appreciation of valuable contribution made by the outgoing directors towards the growth of the Company. Board would like to place on record the contribution made by Mr. R. R. Dhanani in building Liberty Phosphate Limited into a market leader in the country.
The Company has received notices under section 257 of the Companies Act, 1956 from members proposing the candidatures of the additional directors appointed during the year. Necessary resolutions are being placed before the Members for their approval.
CONSOLIDATED FINANCIAL STATEMENT:
Consolidated Financial Statements incorporating the Accounts of the Company and its wholly owned Subsidiary Liberty Pesticides and Fertilizers Ltd., are appended. The Ministry of Corporate Affairs has given a general exemption from publishing the Annual Report of their Companies where the Companies concerned append a Consolidated Statement in their own Annual reports. In view of this, the Annual Report of the Subsidiary Company, namely, Liberty Pesticides & Fertilizers Ltd., is not annexed herein. However, the Accounts of the Subsidiary Company and the related information will be made available to the Members of the Company/its Subsidiary Company upon request, and the same will also be available for inspection at the Registered Office of the Company/Subsidiary Company.
A Statement under Section 212(8) of the Companies Act, 1956 is attached after the Audited Financial Statements of the Company and forms part of this Annual Report.
As required under Clause 32 of the Listing Agreement with the Stock Exchange, at which the Equity Shares of the Company are listed and traded, the Audited Consolidated Financial Statements form part of the Annual Report.
LISTING OF SHARES:
The Equity Shares of your Company are listed on Bombay Stock Exchange Limited.
DEPOSITS:
During the year under review, the Company has not invited / received deposits from public under Section 58A of the Companies Act, 1956.
AUDITORS :
M/s. V. Shah & Associates, Chartered Accountants, Vadodara and M/s. K. L. Vyas & Co., Chartered Accountants, Udaipur, Joint Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.
Your Directors recommend their re-appointment and fixation of their remuneration.
COST AUDITORS:
The Cost Accounts of the Company are required to be audited annually as per directions from the Ministry of Corporate Affairs. Mr.H.R.Kapadia, Cost Accountant, has been appointed as Cost Auditor for the year 2012-13. The Cost Audit Report would be filed with the Central Government within the prescribed period of 180 days from the end of the accounting year viz. by 27.09.2013.
AUDITORS REPORT:
The Auditors observations are self explanatory and hence do not call for any further clarification under section 217 of the Companies Act, 1956.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm:
(i) that in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating 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 at the end of the financial year as on 31st March, 2013 and of the profit of the Company for that year;
(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; and
(iv) that the Directors have prepared the Annual Accounts on going concern basis.
CORPORATE GOVERNANCE:
In compliance with the listing agreement with the Stock Exchange, the Report on Corporate Governance is furnished as Annexure A
MANAGEMENT DISCUSSIONS AND ANALYSIS:
In compliance with the listing agreement with the Stock Exchange, the Report on Management Discussions and Analysis is enclosed as Annexure B.
PARTICULARS OF EMPLOYEES:
As required by the provisions of Sub Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, as amended, particulars of the employees are set out in the Annexure to the Directors Report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder, interested in obtaining such particulars may write to the Company Secretary at the registered office of the company for a copy of the same.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :
In pursuance to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant information is annexed as Annexure C
ACKNOWLEDGMENTS:
The Directors acknowledge with thanks the co-operation extended by bankers viz. Canara Bank, State Bank of India, State Bank of Patiala & IDBI Bank Limited, Railway Authorities, and various Central and State Government authorities. The Directors also wish to place on record their deep appreciation of the contribution made by the officials and the management cadre executives as well as staff and workers who have worked with commitment and devotion in improving the performance of the Company.
For and on behalf of the Board of Directors | |
Place : Udaipur. | M. K. TANDON |
Date : 27th May, 2013 | Chairman |
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